Trading Plan for 4/26

FOMC days can be… so much fun. Especially when its the Chairman’s quarterly press conference. The bullish environment fostered by AAPL’s earnings the previous evening didn’t hurt matters.

Pattern points… (Setups and technicals)[pay]
Wednesday afternoon’s 1388.25 bias-up target remained in-play, after it was invalidated. That is, the bias environment’s 2:30 exit was probing under the 1383.50 bias-up signal, but it was recovered through 3:00. The burden of proof was on sellers to invalidate it, and they did not, despite trying.

1388.25 was tested to within 3 ticks up to 1387.50, so a downleg could have gained traction. But two more windows for reversing down were ignored.

Testing 1388.25 overnight, and only 1388.25, would be noise. It would not create a “new Globex trend extreme” that might require being retested intraday. Any price action that has any complexity above Wednesday’s 1387.50 highs would require an intraday retest.

Meanwhile, Wednesday’s cash session close was still in the process of testing the 1386.00 area. Its break a couple of weeks ago triggered a trend change. Its recovery by two consecutive higher closes would invalidate or terminate the bearish signal. Wednesday was not the first of those two days.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Reacting down overnight under 1383.50 and 1381.25 would be likely to trend down Thursday morning. This is regardless of whether 1388.25 were tested first. Regardless, the rally is not precluded from extending above 1388.25, but the burden of proof is on sellers.[/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.