From a Hidden Pivot perspective the rally so far is unimpressive on the daily chart, and even on the ‘hourly,’ bulls seem to be struggling to create the kind of gung-go impulse legs that would signal the start of a major move. Moreover, the 1445.70 downside target we’ve focused on will remain valid until such time as the 1643.70 point ‘C’ of the bearish pattern with which it is associated has been exceeded. That’s the bad news. However, as a practical matter, the rally has distorted the symmetry of the downtrending ABC (where A=1760.50) sufficiently to suggest that the pattern will not play out to its 1445.70 target.
So how will we know whether the so-far moderate buying spree is capable of getting legs? Let’s stipulate that it impulse above the 1645.80 ‘external’ peak on shown in the chart — or better yet, above the more imposing one at 1665.20 recorded a day earlier. In the meantime, camo traders have quite a few small peaks on the hourly chart created since 12/21 to ‘discover’ impulsive A-B rallies. Please keep in mind, though, that any entry signal thereof would need to be interpolated on a chart of lesser degree so that the initial theoretical risk would not exceed $60 per contract. In practice, this means the distance between C and X of the pattern used to make entry be no more than 50 cents.