Trading Plan for 4/24

If the twitter hoax were at all real… then its complete retracement — immediately, no less — probably wouldn’t have happened. But it would have probably trapped more shorts than did Tuesday’s momentary plunge.

Pattern points… (Setups and technicals)[pay]
Tuesday’s highlight was also its lowlight, that the mainstream AP twitter news feed could be hacked, and abused.

It’s unusual for the market to encounter such news, real or imagined. The most recent similar setup was way, way, way back on… last Monday. Both instances did offer a learning opportunity for the scenario.

That is, despite the likelihood of eventually retesting the plunge’s low,  the plunge’s origin tends to be a probed at some point. The Boston reaction was based on reality, so it remained under pressure for awhile. Its relief rally phase extended higher once the selling had ended. The AP twitter reaction was retraced entirely immediately, and required some time to absorb the shock to the system before rallying.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Actually, the relief rally phase wasn’t productive until after AAPL’s post-close earnings. But now that 1574.00 has held a test through the close, there is room for noise around it up to 1577.75 (it is being attacked post-close to within 3 ticks). Testing or probing it intraday Wednesday must close back under 1572.00 and preferably also 1569.00 to signal and confirm momentum reversing back down. Otherwise, higher highs would target 1583.25, and then very likely retest the two-week old highs above 1592.50.[/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.