Trading Plan for 1/26

If Friday had wanted to kill the rally… then it had ample opportunity to get the ball rolling well before the afternoon slide. Unless the decline were extending down into Monday”s noon hour, its recovery remains likely.

Pattern points… (Setups and technicals)
Friday morning”s no-bias signal gets every benefit of the doubt for being valid. Having held a test of the 2049.25 bias-down signal through 10:15, an offsetting test of the 2061.50 bias-up signal has become “unfinished business above.”

That doesn”t preclude a detour, however deep and for however long, but usually the unfinished business is resolved much sooner. Regardless, so long as there is unfinished business above, we assume that any drop is only a temporary detour.

Was Friday afternoon”s 13-point slide the end of the detour? It did fulfill its objective of retesting the morning”s low. It did close at 2044.00 support. And it didn”t break under a prior relevant low. All during an otherwise irrelevant Friday afternoon. Enough immediate strength Monday would be credible for at least probing fresh highs up to 2065.00 or 2075.00.

Also credible would be extending Friday”s pullback to 2038.50 or 2031.00. In fact, that would be likely, if this pattern were greeting any other day but the weekend. Time heals all wounds — we”ll see if this one can be healed after two days.

What”s Next… (Outlook and opportunities)
Join us at 9:30am ET for this weekend”s Saturday Review. We”ll discuss the bigger picture”s longer-term potential. And we”ll also do on-demand instant chart analysis. Click here up to 30 minutes before the start time.