Trading Plan for 1/4

The new year started with a bang… The rest of the day more closely resembled last year’s choppy range that ultimately went nowhere.

Pattern points… (Setups and technicals)[pay]
The pre-open dip held 1271.00 to maintain the potential for retesting 1280.00. And 1280.00 was retested to within 1 tick. Later dips tested 1271.00 during the noon hour, into the 1:20 bias timing window and then before 1:30. The potential to 1280.00 was met only by the proxy of a 61.8% retracement to within 1 tick of 1277.00.

1271.00 was being tested again at the close. Although not broken, no recovery was completed. The door is open to probing under Tuesday’s lows down to 1267.25 or 1262.50 so long as 1273.25-1274.00 holds as resistance.

A dip could develop and resolve entirely overnight, allowing Wednesday’s open to already be in recovery mode to probe Tuesday’s highs. A dip could instead gain traction to attack Friday’s 1252.00-1253.00 close. Recovering to probe Tuesday’s highs — whether Wednesday or later — could trend higher. Retracing Friday’s close would likely trend much lower.

[/pay]What’s Next… (Outlook and opportunities)[pay]
If a durable downleg were going to originate from Tuesday’s elevated range, then it probably would have begun Tuesday. Maybe it did, with the closing action testing support. An earlier dip would have been more reliable, but look out above if sellers haven’t exploited it much after midnight. [/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.