Trading Plan for 1/30

Saturday’s Strategy Session… was great, well-attended with very interesting questions. The answers were not terribly long-winded, so you may be interested in viewing the recording. It is linked from the blog’s sidebar.

Pattern points… (Setups and technicals)[pay]
It is difficult to begin trending Friday morning, and it is at least as difficult to stop trending once it begins. But attempting to trend should either succeed, or be rejected. There is no middle ground — only a delay.

Friday’s open gapped down to Thursday’s low, and held it. Trending did not succeed. But Thursday’s low was still being tested when the morning’s bias environment was lapsing. And it was retested as the noon hour was ending. The trending attempt was not rejected.

While the setup tends to resolve sooner, rather than later, it can be later. Friday’s negative close did not suggest that buyers gained any traction, but the session’s “ineffectual pessimism” kept open the door for another rally attempt to 1318.00-1321.00. Friday morning’s bearish setup offers context that suggests a rally attempt would fail.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Immediately recovering 1318.00-1321.00 through Monday’s open would signal a credible rally attempt — 1343.00 can be reinstated, but probably requiring much stronger sponsorship capable of reaching 1343.00 intraday. Otherwise, any probe under Friday’s lows would be unlikely to hold 1305.00, perhaps also breaking under 1299.50.[/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.