Trading Plan for 2/19

If Tuesday’s open hadn’t duplicated Globex volatility… then perhaps the balance of the session would have not been so scared of its own shadow. But multiple attempts to break beyond a narrow range were reversed back to the range’s other end, for a similar resolution.

Pattern points… (Setups and technicals)[pay]
Friday afternoon’s trending that made fresh highs likely was technically satisfied Sunday night, and again Monday. Trending above Friday’s 1838.75 high never developed, but probes above it did. Tuesday satisfied the setup with a similar technicality, essentially spending the entire post-open session ranging at or above Friday’s high.

All of should have the effect of chipping away at resistance. Spending so much time at a relevant level without reacting away from it should be obligated to probe beyond it. At least temporarily. That’s why we call it “obligatory.”

And that’s why we suspect an obligatory probe of fresh highs would not be durable. The back-and-forth isn’t back-and-filling, not with so long a delay since recovering the reaction back down to Friday afternoon’s 1832.00 breakout. And neither is the action sawing through prior highs, since there is none.But another setup has already made at least one more higher close likely. Almost any initial strength Wednesday would assume a delayed reaction. A quick double-digit rally — if not also measuring another 20 points —  would  be in-play.

[/pay]What’s Next… (Outlook and opportunities)[pay]
But another setup has already made at least one more higher close likely. Almost any initial strength Wednesday would assume a delayed reaction. A quick double-digit rally — if not also measuring another 20 points —  would  be in-play[/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.