Friday’s manic bounce, punctuated by a nasty dive into the close, was predictable when the futures breached a downside target earlier in the session by a little more than two points. The 1015.50 target given here at the time remains valid and should be used as a minimum downside objective for the near term. The dwindling herd of bulls that remains would get a reprieve on a print today at 1178.25, but that seems unlikely with Europe’s hour of reckoning in the offing as borrowing rates for Italy push north of 7%. ________ UPDATE (8:28 p.m. EST): DaBoyz have sprung a quite nasty trap on shorts Sunday night, leveraging rumors — later denied — that Italy is about to be “bailed out” with an $800 billion “loan;” and perhaps a dollop of fab weekend tidings from Macy’s. The rally is most surely impulsive on the hourly chart, but check the daily chart before you get too excited. It’ll be interesting to see what happens when Spain requires the same wave of the monetary magic wand. At any rate, the futures should be presumed headed to at least 1184.50 Sunday night, a midpoint resistance associated with a minor-trend ‘D target at 1198.00 (15m chart, A=1149.25 at 1:15 p.m. Friday).
