Trading Plan for 1/24

If Wednesday’s post-close plunge isn’t recovered overnight… then a correction is underway. Even if Thursday’s open has recovered the market’s reaction to AAPL, the rally is still living on borrowed time.

Pattern points… (Setups and technicals)[pay]
Well, it wasn’t constructive pessimism that stopped Wednesday afternoon’s rally from extending. The 1491.25 overnight high was tested to within 1 tick, and held. If the rally slowed due to anxiousness ahead of AAPL’s post-close earnings release, then it was well-placed anxiousness. As the paranoid say, “sometimes, they really are following you.”

AAPL plunged about 60 points, well below its sub-490 low that was visited too briefly to be a bottom. Now the next lower objective at 462 is being probed by almost $5, probably headed to 455.

S&Ps had ended the cash session at 1490.00, whose recovery 3 minutes earlier would have triggered a hold-long setup. The reaction to AAPL drove the market back to the morning’s 1484.50 low. Globex is opening at lower lows.

[/pay]What’s Next… (Outlook and opportunities)[pay]
It’s difficult giving sellers much credibility, despite their being very productive after the close. Wednesday’s bias environment exit and the final hour entry had trended higher. Signs of topping have been appearing, but the pattern isn’t optimal. Extending down without delay would probably only delay higher highs at 1503.00 or 1512.75, but at this stage the delay would be indeterminate.[/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.