Trading Plan for 1/23

If Thursday”s high were a little higher, or a little lower… then we”d have confidence in the rally extending. But rather than close above the next higher target, or leave it outstanding, the target was met and held.

Pattern points… (Setups and technicals)
Thursday afternoon”s steep and substantial rally from 2043.50 quickly fulfilled its 2059.00 target. That”s not patient optimism. The session”s last 45 minutes hovered just under 2059.00 instead of correcting down — i.e. refueling by trapping shorts. That”s ineffectual optimism.

None of which is inherently bearish. But all of which increases the vulnerability to stronger sellers retaking control.

A pullback had room down to 2047.50-2048.75. Still does. Opening any lower Friday could reverse momentum down. But holding support would still require rewarding Thursday afternoon”s buyers for having gained traction (they exited the bias environment above the noon hour”s high, and entered the final hour above both).

What”s Next… (Outlook and opportunities)
Sellers gaining traction through Friday”s open would reverse the trend down, but not necessarily for more than a correction. A lot of Thursday”s range can be retraced without reversing the trend. But reversing the trend would be very bearish for next week.