Trading Plan for 1/27

On to the next order of business… FOMC has come and gone, but Thursday’s news flow isn’t any less disruptive. If the new high close still can’t find a reason for falling to new lows for the week, then another upleg is underway.[pay]

Pattern points… (Setups and technicals)
Last week’s trend change signal  has officially run its course. It was pretty productive, for the brief time it was in effect. Closing above 1291.00 neutralizes the influence of having closed under 1286.50.

Of course, the trend change signal can be restarted immediately. It requires breaking back under 1286.50 through Thursday’s next relevant timing window – the morning bias. That would also reject Wednesday’s new highs, which is terribly bearish at this stage of this pattern.

Rejecting new highs could have been a one-day affair. Turning the slightest bit negative intraday would have opened an air pocket below. At least sellers didn’t expend any energy unnecessarily, like by probing below into prior sessions. So rejecting new highs still could be a two-day affair.

Another fresh high need not be probed first, but it would need to be rejected quickly. Regardless, sliding Thursday morning would be a credible retry at dropping to new lows for the week under 1277.00.

What’s Next… (Outlook and opportunities)
Not quickly rejecting a break higher would be vulnerable to extending higher. Vulnerable, not necessarily likely. Nevertheless, maintaining fresh highs Thursday morning would marginalize sellers, and put into play 1310.00 and 1324.00.[/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.