Trading Plan for 12/5

Three consecutive sessions probed… the 1245.50 objective, without closing above it. That makes one thing likelier than another, it doesn’t prevent the other, but it tells us much about what comes later.

Pattern points… (Setups and technicals)[pay]
It took long enough. But 1248.00 finally broke lower to 1242.25, filling the gap back to Thursday’s close. And despite bouncing quickly a couple of points, 1245.50 wasn’t tested until too late for its recovery to be valid. Anyway, its test reacted back down.

This makes three consecutive sessions of probing above 1245.50 without also closing above it.

This does not in itself create a top. Probing above 1245.50 may be chipping away at its resistance, clearing the path for a later upleg. But there is noc obligation for a higher highs, only failed probes of higher highs. A sell-off attempt has become much likelier, even if only to refuel the rally.

Correction, or new downleg, a decline from 1245.50‘s testing has potential down to 1236.00, 1227.25, and even to 1222.50. Rallying first could reach 1262.00-1265.00, or 1280.00, but still be likely to reverse down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
There is no Saturday Strategy Session this weekend, but we did cover much of the bigger picture in Friday’s post-close Market Wrap. Its recording is available in the sidebar. [/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.