Trading Plan for 12/26

[pay]Pattern notes.
Wednesday’s abbreviated session was an inside day. It gapped up and traded almost exclusively in positive territory. The optimism was ineffectual , stopping short of touching Tuesday afternoon’s high (not even its pivotal high). Breaking above resistance at 862’50-865’00 would have triggered a rally, but the resistance held. Ineffectual optimism ultimately resolves down, but not necessarily immediately.

So gapping up 2-3 points at Friday’s open could extend easily to 872’00. And above 874’00 would target 883’00. Any sort of rally would need charitable conditions, because lower objectives remain outstanding. The character of Monday’s last-minute surge required its retracement. Tuesday’s test of Monday’s pivotal low indicates tha the actual low will be broken. Under 859’00 would put into play 849’00, potentially down to 842’00 on the same leg.

Indicators and Internals.
Wednesday’s narrow range and shortened hours didn’t give technicals much reason to push either extreme. Neither did the slow and steady chopping higher. That makes them vulnerable to spiking one way or the other on any sudden price move. And that means quickly becoming overbought or oversold would be likelier to retrace, but only temporarily.

Friday’s opportunities.
This session is injected into the middle of what is for most a 4-1/2 day holiday weekend. Its ability to produce normal opportunities will depend on its volume. And volume isn’t likely to be heavy. Overseas markets are mixed just several hours ahead of S&P’s 6:00am Globex open. I’ll be available for that, but don’t forget that my participation today otherwise ends at mid-morning.[/pay]