Trading Plan for 4/25

If Wednesday’s fresh highs had extended… then the rally from last week’s lows would be considered more than just a correction. At least there is still that possible outcome.

Pattern points… (Setups and technicals)[pay]
Since Tuesday’s test of 1574.00 wasn’t rejected, Wednesday had room for noise around it up to 1577.75. It was probed overnight up to 1579.00 before reacting down intraday to 1571.00. The afternoon recovered it very late up to 1578.50.

Too late, actually. Entering the final hour above bias environment highs and noon hour highs backed the recovery’s sponsors into a corner. Either extend the afternoon’s 6-1/2 point rally despite not having had a refueling dip along the way. Or, finally have that refueling dip, probably leaving no time for resuming the rally.

The rally peaked, and the drop fell to 1573.00. The close was still testing the relevant 1574.00 level, and not breaking under it clearly. The pattern remains equally vulnerable to extending higher as to reversing down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Thursday morning could probe above Wednesday’s highs and still begin reversing down into the close, ending the corrective bounce from last week’s low. Regardless of Thursday morning’s action, closing above 1579.00 (the peak of Wednesday’s probe above 1577.75) would target new 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.