Trading Plan for 1/28

If the rally intends to extend higher undelayed… then how could it have missed the opportunity Friday to close above Thursday’s highs? It wasn’t for lack of trying, with the entire afternoon ranging narrowly there.

Pattern points… (Setups and technicals)[pay]
Fridays can be tough. Even when there is unfinished business to attract price in one direction, the less liquid environment can enable price action to gravitate to the range’s other end.

That describes this Friday. Unfinished business below at the morning’s 1488.50 bias-down signal was only attacked, holding a test of Wednesday’s 1491.00 high, the same high that Thursday’s close had failed to recover. The reaction up never failed, so it gravitated back up to test Thursday’s 1497.75 high. Futures momentarily touched 1499.25.

This was despite the afternoon bias environment offered every opportunity to extend higher — probing prior highs, as the bias environment lapsed, on a Friday afternoon, at a new trend extreme. Providing all of a signal’s elements, without also triggering, usually transforms the setup into a sell signal

The cash session and futures closes were under Thursday’s prior high. So, the rally did not buy itself any more time. Of course, no sell signal has actually triggered, so the pattern remains vulnerable to extending higher. But that vulnerability is diminishing, as potential grows for reversing down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Don’t forget to join us for this weekend’s Saturday Strategy Session at 9:30am ET. We’ll discuss the market’s current challenges, and also provide instant analysis of your own stock picks. [/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.