Trading Plan for 12/28

The first day back from Christmas… wasn’t very different than the last day before it. Early trending, mid-day ranging, and late trending. Except, there wasn’t really much late trending. Can we get trending without volume?

Pattern points… (Setups and technicals)[pay]
1260.50 was the latest sell signal to be probed without triggering a downleg. At least, not yet. It was probed too near the close for its break to be reliable. That explains the lack of follow-through.

Tuesday’s other sell signals were somewhat productive, but still trapped enough shorts to be potentially bullish. Except that the shorts were never squeezed. A lot of potential was left untapped, since no shorts were squeezed to produce a fresh session high.

Probing under 1260.50 earlier before the close could have been a compelling hold-short . Waiting so long undermines the break’s sponsorship. And that leaves the door open to another fresh high testing 1268.00-1269.00.

Testing 1268.00-1269.00 overnight at this stage of this pattern must be rejected quickly to avoid forming a “new Globex trend extreme” that requires being retested intraday.

New high, or not, a test of Friday’s last relative low at 1255.75 remains compelling. Tuesday’s pre-open attempt to reject Friday’s surge from 1255.75 stopped too optimistically short to be a durable bottom. That would have been moot if Tuesday’s opening surge had gained traction, but it never extended higher.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Narrow intraday ranging on low volume doesn’t often suddenly break into a durable trend. A probe of either fresh highs or lows may be needed to stretch the rubber band. Probing fresh lows first would be problematic since there is essentially an air pocket below. So probes of fresh highs still appear unlikely to gain traction.[/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.