Trading Plan for 1/23

Friday’s narrow range revealed the dark side… of expiration. The monthly event tends to be a lot of something. Usually it’s a lot of volatility. But Friday it was a lot of nothing. Until the end…

Pattern points… (Setups and technicals)[pay]
Wednesday’s Expiration Indicator was in hiding as Friday afternoon got underway. The morning’s narrow ranging had failed to exploit the open’s gap down. Two recovery attempts had failed at 1309.50. And the range’s 1306.00 support was being retested again.

Either the signal was going to fail and the bottom was going to break, or the signal’s upward bias would save the day. It was the latter.

That helps to maintain confidence in the signal. And that helps to anticipate an upward bias off of Monday’s open. Even if the open were to gap down, the balance of the morning should trend back up. Opening higher, flat, or only slightly lower would be likely to probe fresh highs above 1311.00.

Closing above 1311.00 would put into play a higher objective beginning at 1343.00. The signal would be subject to a second consecutive higher close. But the signal would not trigger if fresh highs Monday are reversed before the close. And except for  Wednesday’s Expiration Indicator, no fresh high above 1311.00 is required.

Oversold RSIs seem to require a retest at Friday afternoon’s 1306.00 low. I tend to discount that requirement since the reading developed in an extremely narrow range, and during expiration. Nonetheless, be mindful of its potential attraction.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Saturday’s Strategy Session was very interesting. The recording’s first half-hour fully describes the current market influences. [/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.