Trading Plan for 12/30

If overnight selling is retraced entirely… then does that qualify as accumulation? It depends, both on how that retracement is resolved, and on the volume accompanying it. So, no and no. Lacking sponsorship, dipping into recent opens hasn”t extended down. And lacking sponsorship, retracements haven”t extended higher.

Pattern points… (Setups and technicals)
So, intraday action isn”t being very predictive. Monday”s opening surge quickly extended 6 points to fulfill its objective. That objective held. Its reaction down only dipped and didn”t launch a downleg. Noise in the range.

Nevertheless, a couple of items are important to note. 

First, the open was greeted at the precarious position of testing the support of its bias-down signal. Post-open action had no choice but to surge immediately, unless it was willing to plunge. The latter effort of plunging under support requires sponsorship, while the surge was simply the product of no sponsorship.

Second, surging immediately reflects impatient buyers. Probing overnight lows and recovering from the test could have trapped impatient sellers. While an intraday probe of new highs is possible, launching from this base would be doomed to failure, perhaps in the same session.

What”s Next… (Outlook and opportunities)
Low-volume ranging makes trending more difficult to launch in either direction. It”s as responsible for promoting the reaction of of the open”s support, as it is for preventing extending above the morning”s resistance. It”s almost the same drill as last week, except this Wednesday”s session doesn”t end early.