Trading Plan for 2/22

Overnight reactions to the weekend’s Greek deal… were never retested Tuesday. Not fully. They were largely rejected. Not by enough to signal momentum already reversing down. But a fresh high would be vulnerable to peaking.

Pattern points… (Setups and technicals)[pay]
Tuesday afternoon’s drop snuck itself into an otherwise narrow range, which had begun three hours earlier, touching three separate timing windows. Its break missed an opportunity to bottom quickly at 1360.50, and extended lower instead to 1355.75.

But it was the same break, regardless of its deeper drop. So, it is an extended break, not refueling sellers until the last-minute bounce back to 1360.50.

And the extended break gained no traction, since it did not maintain the relevant portion of its break. That last bounce was no small victory for sellers, not for what buyers achieved, but for undermining sellers. Despite exiting the bias environment and entering the last hour under Friday late high, sellers failed to exploit that buyers were marginalized.

A retest of Sunday night’s 1369.00 “new Globex trend extreme” is not necessarily likely, but it remains possible — presumably up to 1371.00. So long as Tuesday’s slide doesn’t resume first…

[/pay]What’s Next… (Outlook and opportunities)[pay]
Tuesday’s 1355.75 low first printed during the afternoon’s bias environment. Closing action bounced. So, gapping down under 1355.75 would trigger a session-long decline. Its minimum objective would be 1350.50-1351.50. That could also be its maximum objective before resuming the rally Thursday. Closing under Friday’s 1355.00 low would put of the rally for a much longer time.[/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.