Trading Plan for 1/27

Not firming aggressively at Thursday’s open made a drop increasingly likely, with potential down to 1311.00. It was probed down to 1309.25. It was recovered up to 1315.00. So, the natural question is, whether that was only a correction…

Pattern points… (Setups and technicals)[pay]
Wednesday’s breakout close was not confirmed Thursday. Another breakout can still be attempted Friday by closing above 1318.00-1321.00. Simple enough, considering the last half-hour’s bounce already recovered up to 1315.00.

Of course, another breakout attempt would still require confirmation Monday, and that’s the problem. Friday breakouts are rarely confirmed Monday. So, it is increasingly likely that a top is forming. That doesn’t preclude a breakout attempt, especially if Thursday’s late bounce doesn’t hesitate extending higher at Friday’s open.

A shallow dip Friday morning could still recover, or at least range sideways through the close. But a retest of Thursday’s 1309.25 low would also challenge support at 1308.00. And the 1305.00 support under there was already chipped away totally during this week’s morning dips.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Despite Thursday’s steep deep slide, the burden of proof remains on sellers to actually break under a prior low. Otherwise, the most bearish scenario would be continued sideways ranging.[/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.