Trading Plan for 7/22

If geopolitical surprises can hibernate for a day… then a probe of fresh highs could be done before leaving for lunch. And its reversal could be done before returning.

Pattern points… (Setups and technicals)[pay]
RECORDINGS UPDATE: I’m now told the recording facility remains backlogged. Had I not been assured of its resolution over the weekend, I would have used that time to secure an alternative. I’ll try to have something in place tonight that will make recordings available again for Tuesday’s Market Tour.

Not that fresh highs must be rejected. That’s still likely, but two weeks of absorbing dips might deserve a bigger reward than only a temporary probe above 1978.25. Regardless of the resolution, 1982.00 should be tested.

There is room up to 1985.00 while still being vulnerable to reversing down. Closing any higher would start to signal that only a retest is unlikely, while a new rally leg is probably underway.

That’s if selling doesn’t resume Tuesday. And selling need not resume before extending the rally, no deeper than 1965.50, or perhaps a test of 1964.00. Dipping any deeper could simply extend. Defenses are pretty much depleted. Monday was spent entirely in negative territory, and more than half of that was buying pressure expended without even touching positive territory.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Monday was an “inside day,” and so was Friday. But their range’s aren’t exactly subdued. The setup tends to break falsely initially in one direction, before reversing more substantially in the opposite direction. Oversold RSIs at Monday’s low want to be retested, but shouldn’t be retested at all to keep alive potential to fresh highs. And since Monday’s buyers failed to gain traction, extending higher without delay must gap up Tuesday.[/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.