Wednesday, July 16, 2014

The futures came close to the 17057 rally target yesterday, but their failure to actually reach it suggests that weakness is creeping in.  If so, we should see the small abc pattern currently in progress exceed its p midpoint pivot and continue to or past D.  Ordinarily, either of these Hidden Pivot supports would be worth bottom-fishing, and you can certainly try it if the action is mellow enough to bid both with a stop-loss as tight as three ticks.  Regardless of whether you trade this one, however, an easy breach of p and D would be telegraphing more downside over the near term. ______ UPDATE (3:35 p.m. EDT): The pattern shown in the chart would have been useful for purposes of bottom-fishing if weakness had begun the day. Since the futures gapped higher, a bottom-fishing strategy was negated. The very clear, bullish implication is that a bigger, uptrending pattern is in play. The most logical and compelling one began on 5/20 from A=16255 (as did a big, bullish pattern with a 173.52 target that I'd drum-rolled earlier in DIA). The YMU target that corresponds to that lies at exactly 17253.  This implies there is a bull play from here with nearly 200 point of upside potential, along with a 17253 target that can be shorted AGGRESSIVELY and with high confidence when the time comes.