Trading Plan for 1/3

If there really is a FOMC policy announcement Thursday… No. only FOMC Minutes. Still high-profile news, coming one day after a gargantuan two-day rally, and one day prior to the monthly Employment Situation report — all while being so close to new highs, and to the next higher target — then is it still possible to attract buyers with more good news? More important, of course, is what happens if the good news isn’t.

Pattern points… (Setups and technicals)[pay]
Wednesday’s open had rallied to all but prevent sellers from regaining control. “Trending” down from 1452.75 to test 1444.50-1445.50 had ranged too narrowly for any deeper pullback. Lower lows weren’t needed to trap more shorts, and no momentum was available for a deeper drop.

Finally, while exiting the afternoon’s bias environment after 2:30, another rally leg emerged. Its slope and degree compensated for any delay, testing 1455.00 before the close.

New highs above 1461.00 remain in-play. Its test should include 1464.25-1465.50, assuming that 1447.00 isn’t broken as support. At this stage, closing Thursday back under 1441.00 might be the only way to end the rally.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Probing the morning’s high would have been likely to reject it Wednesday afternoon. Waiting until Thursday to probe would still be vulnerable to rejection. Having probed above Wednesday morning’s high, a test of September’s high Thursday morning would be likely to be rejected So, extending higher without delay and optimistically avoiding a pullback may actually be bearish.[/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.