We should guard against getting kicked in the groin while we are busy patting ourselves on the back. The bounce from yesterday’s lows stands to be a strong one, since the 675.50 target has been four months in coming. However, if it gives way easily — say, within the next 1-3 days — look out below! Traders who bought the bottom should take profits on half the position at these levels and be prepared to let a contract or two ride for a potential home-run. _______ UPDATE: This morning’s psychotic price action has been too wild for a judiciously managed long position to have survived, even if the key support at 675.50 remains more or less intact. I say more or less because the low so far this morning, following a run-up to 699.25, has been 673.75. That is sufficient to have stopped out anyone using Thursday’s low as a fail-safe, but it is not quite bad enough for us to infer that the support itself is busted. For that purpose, let’s use a two-day close beneath the pivot, 675.50. My gut feeling is that the intraday breach is already serious enough to be considered fatal. This does NOT mean the futures are necessarily about to fall another hundred points on Monday — only that a major new leg down has been baked into the cake.

A moderate decline could be expected to find support at 1184.25, a Hidden Pivot support. Let’s be ready to bottom-fish there with an 1184.50 bid, stop 1182.75. Switch to a trailing stop at 1196.00 and use 1205.00 as a minimum objective. The trade should not be attempted in the final hour, nor should you hold it over the weekend. If the Naz surprises us with a show of strength, it would take a print at 1120.00 to convince the hourly chart that the rally means something. _______ UPDATE: My apologies. During last night’s pajama party in the chat room, someone tried to point out to me the egregious error above, but I got distracted and neglected to check it; for if I had, the numbers would have come out very different. In fact, the futures appear southbound to at least 1002.75, having smashed through a midpoint support this morning at 1063.75.

On the hourly chart, the futures have not corrected Thursday’s rally sufficiently to be recharged for another leg like it. Notice that the retracement would need to have come down to at least 930.40 to get into the correction ‘window,’ whereas the actual low so far (i.e., as of 1 a.m. EST) has been 931.10. To calculate a rally target, we must therefore drop down to the 15-minute chart and use for ‘A’ a low at 922.20 that occurred at 12:30 p.m. EST. B and C are 937.50 and 931.10 respectively, yielding a target of 946.40 and a 938.75 midpoint. The latter can serve as a minimum objective for the near term, but if it’s easily brushed aside, consider 946.40 a done deal. Please note that all of those numbers would become moot if the futures first pull back beneath 931.10. That would still leave the larger uptrend intact, and it should be viewed on the hourly chart to determine its tradability. ______ UPDATE: Gold joined in the whacky price swings experienced this mornng by the major averages, but not before topping at 945.90, less that a dollar from our target. Two hours into the day session, it appears to be consolidating for another upthrust, but I won’t hazard a guess as to how high until things settle down a bit.

Insomnia has brought the chat room to life tonight, and with it a request for an update on crude. The April contract is still striking for its promise to deliver 22.52 eventually; in the meantime, only an unpaused thrust touching 50.89 is likely to alleviate that. But what about now? The bull cycle begun in late February looks primed for a pop to 47.09 over the next 3-4 days, but if the buying pushes past that Hidden Pivot easily and things get out of hand, better get your mind right for a foray to as high as 53.84, since that would be a distinct possibility by then.