Friday, January 16, 2015

Recent price action may seem crazed, but the futures have shown themselves to be the absolutely obedient (if unwitting) slave of our Hidden Pivot targets. For starters, the top of yesterday's short-squeeze spike missed the 51.77 target shown by a whopping three cents. The subsequent crash then fell to within three cents of a midpoint support on the daily chart at 46.37 (A=55.51 on 1/2).  If that Hidden Pivot is breached today by more than a few cents, expect the futures to fall to exactly 41.00 in search of traction.

Considering the clarity of the 1264.60 rally target we were using (see inset), the so-far $2.60 overshoot of this Hidden Pivot can only mean that still-higher prices impend.  We'll have to wait for the futures to pull back before we calculate a target for the next upthrust, but there's potential to hit 1300. What has all but clinched the move is that yesterday's blast exceeded a key external peak at 1256.20 recorded on 10/21. ______ UPDATE (January 16, 9:2 a.m.): The daily chart leaves room for an 'extension rally' to 1274.20 over the near term, but that would likely max out buyers for at least a short while.

As we've come to expect, the futures sank like a brick after the usual bull-trap opening. It's inconceivable that any buyers other than short-covering bears would be stupid enough to fall for this trap the fifth straight day it has occurred. They constitute enough buying power, however, to set up the obligatory selloff once DaBoyz have distributed shares in the first hour or so. Shortly before midnight Thursday, the carny game pointed to a tradable low at exactly 1956.75, the Hidden Pivot support shown. Your move!