Trading Plan for 2/19

If FOMC Minutes can”t produce more than a surge and retest… then Wednesday”s “inside day” can”t be very predictive. But it can be contrary, and it can suggest that initial trending out of Wednesday”s range will only be reversed. Probably not immediately, but nor after very long.

Pattern points… (Setups and technicals)
It took awhile. Forever, from some perspectives. But Wednesday”s opening drop finally recovered to prove it was only temporary. 

Overnight selling had been contained to Tuesday”s late pullback low. The extra dip before the open defined the range that persisted until the afternoon”s FOMC Minutes. The initially favorable knee-jerk reaction was retraced entirely, but only back to its origin. And then the initial favorable reaction was recovered.

Price action within so narrow a range as Wednesday morning is very frustrating to try trading it. But the bigger picture expectations — that the late extra dip would not extend — kept the focus on buy signals and upward resolutions.

Now the question is whether the afternoon”s fresh session highs fully rewarded Wednesday morning”s buyers for absorbing the probe into negative territory. They didn”t gain traction for their efforts, according to the bias environment exit and the final hour entry. And they only attacked Tuesday”s prior highs.

What”s Next… (Outlook and opportunities)
Wednesday”s last hour hovered pessimistically short of touching Tuesday”s highs. This is potentially bullish from a contrarian perspective, and it suggests fresh highs will be probed — probably Thursday and probably not by a little. But the hesitation is otherwise similar to Tuesday afternoon”s failed probe of fresh highs, which suggests that the next probe of fresh highs will be living on borrowed time.