Trading Plan for 1/6

New year, new format… I have incorporated various subscriber feedback to reorganize the daily outlook. My thanks to all for your input, which I always enjoy reading.

[pay]At the close (How the prior session ended)
Tuesday’s last 90 minutes-plus rallied 7 points to test the morning’s 1132.25 high. The decline off the morning’s high had targeted 1126.00. This target was satisfied just before 2:30. Waiting any longer would have extended the selling pressure into the next timing window. Instead, the afternoon’s no-bias environment was still in force, helping the range’s lower-end to hold its test as support.

Pattern points (And technical influences)
Buyers expended a lot of energy just to travel from one end of the range to the other. Buyers gained no new traction. And the range is still centered around last week’s 1128.50 high. RSIs diverged negatively after the cash session close, which is a little late to be reliable, but it isn’t bullish.

Tuesday’s session did close above Monday’s high, and Monday’s high was the first new high close in a week. With the basic requirements met for a breakout and confirmation, I would still consider selling only special situations (like Tuesday morning’s high).

A gap down under Tuesday afternoon’s 1126.00-1127.00 high would trigger a session-long decline. Any less initial selling pressure would be likely to recover for a retest of Tuesday’s highs, perhaps even to trend up into noon.

Bottom line (My underlying premise)
Tuesday’s last upleg triggered its buy signal too late to be confident in it. And it already satisfied its buying pressure. If Wednesday’s open isn’t rejecting or retracing Tuesday’s last upleg, then Tuesday’s last upleg is probably extending higher through the morning.[/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.