Trading Plan for 1/5

Wednesday’s drop fulfilled the selling pressure… that Tuesday’s session had threatened. Was it too late to refuel buyers, serving only to chip away at support?

Pattern points… (Setups and technicals)[pay]
Wednesday’s late surge did not pierce the 1273.50 afternoon high. It was only noise in the range. And it was just more ranging around the afternoon bias environment’s 1273.00 high. Buyers gained no traction for their efforts.

Of course, sellers gained no traction, either, so there is potential to probe higher highs.

Wednesday afternoon’s pattern offered bearish context. Probing higher highs overnight or intraday Thursday would likely be absorbed, and reversed down to resume Wednesday morning’s decline. But any probe up to or through 1277.00 must retrace back into negative territory through a relevant timing window for sellers to gain traction.

Gapping up above 1277.00 would be capable of probing fresh highs to at least test 1281.25. Only gapping down or immediately breaking under 1268.00-1269.00 would offer early assurance that buyers may be marginalized for the morning.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Thursday’s two pre-open reports probably didn’t inhibit Wednesday afternoon from trending. Perhaps the market anticipates some Eurozone news overnight. Regardless, I would be cautious about shorting within Wednesday afternoon’s range, at least prior to rejecting a fresh high.[/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.