Trading Plan for 12/23
If Friday’s new high close were rejected immediately Mnoday… then it would leave “unfinished business above.” And that would be odd as the seasonal holiday bullishness begins.
Pattern points… (Setups and technicals)[pay]
Overnight action had eked out higher highs, but Friday’s open qualified as the obvious bullish behavior. It wasn’t just the early productivity, but what that implied. Trending up through the first 15 minutes on expiration tends to define the entire session. And Friday’s first 15 minutes trended up.
No prior low was even attacked intraday as its rally extended higher. The last half-hour did dip to a fresh afternoon low, after trending down during the half-hour before that. The dip’s reaction did recover back above prior lows. Other than producing a momentary fresh high, Friday afternoon’s bullish WedEX did prevent sellers from gaining any traction. But that must be followed Monday morning by a strong rally.
Meanwhile, expirations and Fridays aren’t known for printing a trend’s final extreme. An eventual higher close is likely. Closing higher Monday would serve to confirm Friday’s breakout, requiring yet another eventual higher close.
None of which prevents gapping down and trending down Monday. No matter how bullish the WedEX influence, it applies to post-open action, which could follow gapping down sharply. The bullish WedEX suggests trending up, and sharply to compensate for Friday afternoon’s ranging, but Friday afternoon’s ranging raises some suspicions. Nevertheless, Monday morning’s likeliest scenario is to trend to new highs.
[/pay]What’s Next… (Outlook and opportunities)[pay]
This weekend’s Saturday Strategy Session will be the year’s last. We’ll update the bigger picture during the last two weeks as needed, but probably not with the extended conversation. We’ll also cover January Effect candidates, and do instant analysis of your stock picks. Be there at 9:30am ET, its link can be found in the blog’s sidebar[/pay]
Look for at least one update overnight or ahead of the Morning Market Tour… My thoughts on the day’s econ calendar are linked here.