Trading Plan for 1/27

If Monday”s recovery had gained traction… then a shallow opening dip Tuesday could still be likely to recover. But buyers didn”t gain traction, despite the last-minute surge to fresh session highs, so any dip must be contained to overnight action, and recovered to gap up Tuesday, or else lower lows become likely.

Pattern points… (Setups and technicals)
Monday morning”s recovery from Sunday night”s gap down was far more predictive than was the afternoon”s attempt(s) to extend it. Expending too much buying pressure without gaining traction had reset the recovery for morning failure. 

Indeed, the open did fall to 12 points under the pre-open high. But that was absorbed, and recovered entirely.

Lacking a sell signal or bias-down, the recovery was likely to extend. And it did, but not substantially. The balance of the session trended back up, making a series of higher highs and higher lows. Each leg overlapped the 2049.00 area, whose recovery through the open would have targeted 2061.50.

So, at least sellers did not gain traction. But neither did buyers, with the bias environment exit and final hour entry both contained within the noon hour”s range. A last-minute surge to 2054.00 may be in-line with the bigger picture, but its timing was not, so an overnight retracement to 2044.00 is possible in even the most bullish scenario.

What”s Next… (Outlook and opportunities)

Under 2041.00 would more likely extend down to test the oversold RSIs left outstanding at the morning”s 2034.50 low. Avoiding its retest Tuesday would all but require gapping up — and that might require recovering from an overnight dip to 2044.00.