Trading Plan for 2/20

If sellers don’t retake control before too late in the day… then they could be marginalized for the balance of the session. There’s always a path down anyway, but not unless clearly signaled. That tactic once again kept alive the rally through Tuesday. Let’s see if sellers are still marginalized Wednesday.

Pattern points… (Setups and technicals)[pay]
The rally’s relentlessness may seem frustrating, but it did what it was required in order to prevent sellers from gaining traction. And when new highs are involved, simply avoiding a reversal down can equate to extending the prevailing uptrend.

For example, the bias environments avoided being exited back under a prior low. It was actually trending upward. It marginalizes sellers if they don’t regain control without delay, but it doesn’t necessarily extend immediately. Nor does it prevent a dip, a slip, or even a slide. Waiting so long before trying to reverse down only undermines the effort. In fact, a dip out of Tuesday’s stronger bias environment was short and shallow, and recovered to fresh highs.

That dip was only 2 points from 1528.00, but it wasn’t noise. Its low tested 1526.25, which was the afternoon’s bias-up signal. Probing above it during the no-bias environment required its retest, and now that attraction below has been neutralized. There is no bullish reason to revisit it, so revisiting it could be a problem for the rally. So would reversing down from fresh highs.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Gapping down to open around 1525.50 would still likely recover to probe fresh highs. But another reversal down would be likely from 1531.50-1533.00. Only opening under 1525.00 would start to take fresh highs off the table… for the day.[/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.