Trading Plan for 1/23

[pay]Pattern notes.
Thursday’s close narrowly avoided recovering the 825’00 level whose opening break confirmed the market’s bearishness. An overnight drop is probing the 808’00 level that held back Wednesday and Thursday afternoons’ sellers. The 801’25 overnight low suggests that 808’00 will be probed intraday, but just when that happens could mean all the difference in the world.

So long as bounces hold any brief and modest test of 811’00 as resistance, we’ll look for the open to break support. And under 807’00 again makes the break likely to extend down instead of continue consolidating. That’s bad news on a Friday: starting off under prior lows, with lower targets outstanding, and two days of illiquidity fast-approaching.

Indicators and Internals.
The lowest oversold indicator overnight did not accompany the lowest price bar, so there is no requirement to retest the overnight low other than for it being under the prior session’s range.

Friday’s opportunities.
Only one item highlights today’s econ calendar. Otherwise, quarterly and annual earnings hog the headlines. But the economic focus is left mostly to news from D.C., and that news isn’t being taken well. Assorted news due this morning might be able to change the overnight course in time to cast a new die for the rest of the day. Then the week would more likely trade out bouncing back to 820’00 and maybe 824’00. Otherwise, 789’50 and 771’00-772’00 are in-play. [/pay]