Trading Plan for 4/17

If Tuesday’s rally isn’t just a corrective bounce… then can it afford to hesitate extending higher Wednesday? Monday’s recovery pattern would have extended sharply higher from here. Nothing has changed that.

Pattern points… (Setups and technicals)[pay]
An air pocket under 1569.50 targeting 1561.25 had defined Monday’s noon hour drop. That was pre-Boston, and its complete recovery had been anticipated until that news. This relevant area regained its relevance as Tuesday’s close reached fresh highs at 1570.75.

Recovering 1569.50 — not just retracing it — would be further in-line with assuming that Monday afternoon’s drop was exclusively the product of Boston’s terror.

Having touched Monday morning’s higher prior lows at 1570.75 into Tuesday’s close, gapping up above that range’s 1576.00 upper-end would qualify as recovering 1569.50 — not just retracing it. Its purpose would still be limited to retesting last week’s high instead of trending through it, but momentum would meanwhile continue up.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Otherwise, almost any delay to extending higher Wednesday would instead start to suggest that Tuesday’s bounce had ended a correction. Dipping back under Tuesday afternoon’s ~1563.00 lows would essentially signal that Monday afternoon’s buyers had been rewarded for stepping in front of the knee-jerk reaction down, and the original drop was resuming. [/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.