Trading Plan for 1/30

If finally fulfilling the rally’s target will end the rally… then must the rally’s end be obvious immediately? No. Actually, reacting down quickly would make its sponsorship likely to be weak hands. But a new direction should be obvious by Thursday’s close to avoid extending higher into next week.

Pattern points… (Setups and technicals)[pay]
The rally’s 1503.00 target was met. Fireworks went off, loud music blared, and the Liberty North High School marching band were paraded around behind an acrobat group that was simply amazing. Price action, however, did nothing.

At least, very little. The pre-bias environment window was already attacking 1503.00, and the final hour was entered at 1503.00. The 3:10-3:20 window did trend to fresh highs, but the cash session close dipped back down under 1503.00.

Despite futures extending higher after the close to 1505.50, holding 1503.00 through the cash session is an “equilibrium close.” Unless gapping open Wednesday beyond a relevant support or resistance, the next trending attempt is likely to reverse in the opposite direction. And so is that one.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Trending higher without delay should test 1512.75. Gapping down to the 1495.50 area would be likely to reverse back up to Tuesday’s highs. There is no longer-term expectation from an equilibrium close — although already neutralizing the rally’s target does limit the templates somewhat. [/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.