Trading Plan for 12/26

Merry Christmas!… ES re-opens on Globex at 6:00am ET Wednesday morning. Until then, have a very happy holiday.

Pattern points… (Setups and technicals)[pay]
Sunday night’s drop to 1417.50 was retraced almost all the way back up to Sunday night’s 1424.25 open. The cash session only touched 1423.00, the morning’s bias-down signal. Its resistance was validated, and its 1416.50 bias-down target became “unfinished business below.”

Monday’s price action can still be rejected, invalidating its unfinished business below. Despite gapping down and ranging exclusively in negative territory — actually, because of gapping down and ranging exclusively negative — gapping up Wednesday above Friday’s ~1428.00 highs would suggest that stronger sponsorship was bullish.

Being an abbreviated, pre-holiday session doesn’t make Monday any likelier to be invalidated. That only makes it easier to invalidate it. By the same token, as much easier as it would be to invalidate, NOT invalidating Monday’s session would confirm its bearishness.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Not extending the decline Wednesday would not necessarily mean rejecting it. The gap back to Friday’s ~1426.00 close could still be filled before resuming the decline. [/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.