Trading Plan for 2/1

Kicking cans down the road doesn’t change the destination, only its path. Recovering 1277.00 may have delayed the decline’s resumption. Recovering 1285.00 would have set-up a bigger rally to new highs. Either way, the near-term potential is up.[pay]

Pattern points… (Setups and technicals)
1277.50 was Monday afternoon’s low. And price action trended up into Monday’s close. So, spiking or gapping down under 1277.50 (red line) would trigger a “session-long decline” setup.

Oversold RSIs at Sunday night’s 1262.25 low (highlighted yellow) make its retest likely. Not required, as is the case when this setup appears intraday. But its retest would be the objective of any session-long decline worthy of the name – probably down to 1257.25.

While Monday’s bounce could extend higher, the afternoon’s recovery (circled red) makes that difficult. It recovered all the way back to session highs – but no higher. That’s noise, and buyers gained no traction for their efforts. Nevertheless, early strength would suggest the can was being kicked a little further down the road anyway.

What’s Next… (Outlook and opportunities)
If Tuesday’s open is not immediately under pressure, then Monday’s bounce is extending to 1289.00, and potentially to 1291.50 (circled green). That would test the 1290.75 trend change signal triggered Friday. But it’s too late to be invalidated, and any bounce is considered just that until recovering 1298.00.[/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.