Trading Plan for 2/18

If the rally has neutralized all upside requirements… then it is vulnerable to reversing down as sharply as it got here. No reversal signal is yet in play. But Tuesday”s new high close did neutralize one upside attraction. And Tuesday afternoon did probe fresh highs without gaining traction for the effort. Meanwhile, FOMC Minutes is released Wednesday afternoon, and expiration is Friday.

Pattern points… (Setups and technicals)
Tuesday morning was a great example of all the methodology”s parts coming together to produce a likely resolution. Actually, that belongs more to Tuesday afternoon. The morning was a great example of all the methodology”s parts offering context, and challenging that context along the way to their likely resolution.

First Trade and Market Wrap reiterated the bigger picture likelihood for extending the rally. That context made the bias down signal unlikely to be triggered if tested. It was tested, and didn”t trigger.

Testing but not triggering the bias-down signal puts into play an offsetting test of the bias-up signal. That objective becomes a requirement if not yet met when the bias environment is lapsing. When knowing the likely destination is higher, pullback limit tests can be held more confidently — if not also bought.

What”s Next… (Outlook and opportunities)
Tuesday afternoon”s bias-up signal triggered, and its 2101.50 target was left outstanding. That context suggests that any immediate pullback would be only temporary.