Trading Plan for 1/9
Friday’s brief probe of fresh highs… was rejected into the open, and retraced back to the origin of Thursday afternoon’s failed rally. But sellers never gained traction. Buyers never regained it, either. Oh, that’s right — it’s Friday.
Pattern points… (Setups and technicals)[pay]
I was hoping that Friday would resolve the week’s trading range. Wednesday’s pullback to test 1262.50 was retested Thursday, and Thursday’s retest tested and held all sorts of support. Although Friday’s pre-open probe of fresh highs could have gained traction, it was expected to hold the range’s upper-end.
The range’s upper-end held, and the balance of Friday’s session remained under pressure. But sellers did not gain traction for their efforts. Like Tuesday’s gap up that wasn’t rejected intraday, not rejecting Friday’s pre-open high by the close left open the potential for its retest up to 1283.50.
Likely, but not required.
Despite the potential for retesting Friday’s pre-open high, there was no “hold-long through the close” Friday. This is because the week’s trading range could still resolve down anyway, which would begin by gapping down under 1268.50. The threat of gapping down off-sets the potential for probing fresh highs.
That said, not gapping down Monday would become likely to probe fresh highs. Another probe of fresh highs remains vulnerable to peaking — just like Tuesday and Friday, except then also likely to reverse down sharply intraday.
Closing above 1283.50 and 1287.00 would simply point higher. This possibility of an extended rally cannot be discounted until sellers regain control. Not while the Euro and Dollar Index are nearing significant targets. And not with the quarterly/annual earnings onslaught about to begin.
[/pay]What’s Next… (Outlook and opportunities)[pay]
Reminders: Be sure to join us for the Saturday Strategy Session at 9:30am ET. Its link is in the blog’s sidebar (not the daily chartroom). Also, next week’s broadcasting schedule is unusual, and my notes can be found here. [/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.