Trading Plan for 4/23
If Monday morning’s slide had extended a little lower, a little later… then the session’s next 18 points would have been down to 1525.00. But sellers lost momentum, and an 18-point rally formed, instead. Did the recovery start to stretch buyers too thinly to last through mid-week?
Pattern points… (Setups and technicals)[pay]
Plus les choses changent… The more things change, they don’t. Not really. Last week’s relevant levels remained influential as the new week began.
Sunday night’s rally to 1557.00 had reacted down intraday to the ever-relevant 1543.00-1544.00 support. Its reaction to and then through the ever-relevant 1548.50-1549.25 extended sharply higher. The evermore relevant 1555.50 was also influential, first reacting down like its opening test, but this time recovering to fresh highs at 1561.00.
Futures reacted back down to 1555.50.
Buyers gained traction for their efforts. That means the only way to reverse momentum down immediately is to gap under Monday afternoon’s 1552.50 low. Confirmation would come from specific behavior — extending down further with only the slightest hesitation throughout the opening 15 minutes of volatility.
Otherwise, since Monday prevented the decline from resuming, its potential reward would still fill the gap back up to 1569.50. So log as the trend does not reverse down, it should extend at least that much higher. What happens there is a different matter — close above it, or hold its test — which would speak to the bigger picture.
[/pay]What’s Next… (Outlook and opportunities)[pay]
At the recent high I pointed out it had been three sessions since the legendary so-called “3:30 ramp” had appeared. Now it has been longer than two weeks. This is not the only market characteristic, but it was very high-profile so its sustained disappearance is relevant. This does seem to be a different market environment in several other ways we’ve been discussing. Now that expiration’s influence has waned, we’ll be looking for more obvious changes to come more quickly.[/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.