Trading Plan for 12/9

If not for the noon hour”s plunge… then the upside objective would have been fulfilled. And then the afternoon”s expected plunge wouldn”t have left “unfinished business above.” That won”t be a deal killer in case a trend change is signaled. But it makes a trend change less likely.

Pattern points… (Setups and technicals)
Friday”s sellers had gained traction for their efforts, which is why Monday morning”s recovery attempt was likely to fail, regardless. But, what the he.. was that? An offsetting test of the morning”s bias-up signal was prevented by a sudden 8-point plunge to fresh lows. That already seemed large, but a another drop fell 14 points. And headlines didn”t match.

Trending without a news item or other development to quantify makes it difficult to end the trending. Identifying a scapegoat at least allows market participants to quantify the trend”s sponsorship, to know when it is discounted.

Regardless, relevant support or resistance isn”t going to break without a reason. So, last Monday”s “lower prior highs” wasn”t likely to break lower when tested. Not the first time.

A recovery attempt expended all available buying pressure to test 2062.50. But it had reacted down too deeply before entering the final hour, and only ranged sideways between 2058.00-2062.00. A break maintained either way would be likely to trend considerably — either 2051.50 and 2046.00 below, or to 2070.75 and 2077.75 above.

What”s Next… (Outlook and opportunities)
Trend change is signaled by retracing a new high close back under the prior high”s interim low. Thanks to recent shallow ranging, that”s not very difficult now. In fact, the minimum signal at 2051.50 may be in-play already thanks to a “Complex Descending Triangle” that formed during Monday”s last hour. A lot of selling pressure would be fulfilled there — so, not rallying sharply would signal new sponsorship had arrived to extend the break.