Short 119^05.5 with a stop-loss as tight as 119^07.5 if it is reached by noon. That’s my minimum upside projection for the near term, but it should show tradable stopping power. If the pullback occurs as expected, implement a 5-tick trailing stop trailing from 118^22, using 118^14 as a minimum objective. _______ UPDATE (11:25 a.m. EDT): The futures popped this morning to 119^04.5, missing our short offer by a small margin. Cancel the order.
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In after-hours trading the futures were stalled at midpoint resistance, 116^14. If they get past it, however, a Hidden Pivot at 119^05 would be in play, and with it the potential to kick the hourly chart into high gear. Please note that a rally achieving 119^05 would have exceeded a total of three prior peaks, including two “externals,” signaling a move of at least three to four weeks’ duration. Once above 119^05, a path would be open to around 122.
Friday’s failure to push above a small peak at 115^03 recorded on the way down a day earlier suggests weakness over the near term, although a pop today exceeding 115^20 would turn the minor trend back to bullish. Short 114^14.5 with a very tight stop-loss if the opportunity arises. Correction: Sorry for the untradable misprint, for it was a short at 115^14.5 that I’d intended.
Because the futures failed to create an impulse leg on the daily chart at the top of the last rally, we should look for the correction to come down to at least 113^05. That would represent a 0.618 retracement of the surge off last Thursday’s lows, but any lower would corroborate our suspicion of latent weakness (i.e., of a bear rally). Alternatively, a thrust exceeding 115^20 would turn the lesser charts bullish and give the futures a shot at, most immediately, 115^25; or as high as 117^09 if that number is exceeded on a closing basis.
Except for the booster stage of this rally, it’s been just mincing steps. The implied power of it would ratchet up a few notches, however, if it hits 117^27 by week’s end.
We should judge this rally by how well it handles the two numbered peaks shown in the chart. To create an impulsive thrust of daily-chart degree, the futures would need to get past both peaks without an intervening pause lasting longer than a day. Until then, the sharp move off last Thursday’s lows should be viewed as just a garden-variety bear rally — a dead-cat bounce with nowhere to go.
The rally off Friday’s lows may have looked ferocious to those who were short, but from a Hidden Pivot perspective it has been deliberate and even a bit timid at times. Notice in the hourly chart how each thrust over the two days of the rally has stopped shy of breaching all prior peaks to the left of it. Instead, the ascent has unfolded one low-wattage impulse leg at a time. As of Friday’s close, the futures looked ready for yet another push — to at least 115^09 if that Hidden Pivot’s midpoint sibling at 114^21 gives way. However, bulls will need to do just a tad better, pushing past a tiny, look-to-the-left peak at 115^11, to clinch their case; otherwise, it may require a re-test of the recent low at 111^21 to put in a durable base.
