Trading Plan for 1/23

If the range is going to break higher… then Thursday can’t delay it for even a moment, so that opening higher might serve by proxy. By the same token, an overnight slide could grow legs, too.

Pattern points… (Setups and technicals)[pay]
When Tuesday’s session ended, still trading within its recent range, Wednesday’s session became likely to resolve the recent consolidation either up, or down. There was nothing magical about the day. Any day in the past week would have been credible either to extend through the New Year’s high, or else to react down from it. Wednesday just happened to be the last day of the sequence.

Resolving up instead of down became more likely after recent dips expended more selling pressure than buying pressure, without gaining traction for their efforts. The drop into expiration and Tuesday morning’s reversal were each steeper slopes than their recoveries. And the latest recovery was much nearer to the range’s upper-end than lower, which also made resolving down by Wednesday’s close unlikely, since breakouts don’t originate from their opposite end.

So, perhaps the most bullish factor is that buyers have the upper-hand. Or, had. They’ll still get a benefit of the doubt by proxy if Thursday’s open were to surge, if not already gap up. By the same token, although gapping down under the 1834.00 “unfinished business below” would be difficult, it would give sellers credibility for retaking control.

[/pay]What’s Next… (Outlook and opportunities)[pay]
RSIs barely approached overbought territory Wednesday afternoon while price firmed almost 5 points. Not yet reacting down suggests that buyers were conserving energy, and being patient. But that still requires an immediate reaction up to be credible.[/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.