It’s telling that the short squeeze DaBoyz engineered yesterday to kick off the new week failed to reach the 1859.50 target shown. The actual high fell 2.75 points shy of this objective. Although that may not sound like much, when a price pattern is as clear as this one, even a small target-miss suggests that there was not much real power driving the rally. My hunch is that the usual suspects have milked short-covering dry for the time being and that it could take at least a few days to prime bears for another run-up.

This will be more easily accomplished if DaBoyz can keep the correction shallow, but it is they who will be on the ropes if this vehicle takes out yesterday’s 1830.25 low in the process.  Under the circumstances, you should trade with a bearish bias, since the intraday charts are bearishly impulsive. The potentially tradable pattern I see at the moment, using the 3-minute chart, comes from the following coordinates: a= 1350.25 at 3:48 p.m. EST on 2/24; b=1842.00; and tentative c=1846.25. Please note, however, that it would take but a 1.00-point rally to generate a bullish impulse leg on the 3-minute chart, so scalpers should consider both sides of the opportunity.