The world’s bourses needn’t have freaked Sunday night merely because Europe’s elections effectively ratified fringe socialism.  Here in the U.S., cooler heads prevailed in the quasi-criminal redoubts of Sunday-night trading. It was left to these off-hours scalawags to save the day, and so they did — with larcenous bids so far below the market that even Armageddon could not have forced prices much lower.  The effect was to exhaust sellers before the opening bell on Monday, clearing  the way for an 80-point rebound that must have left the world with the impression of America as a fortress against the dark forces of economic fear and doubt that have roiled Europe.

Nevertheless, we’ll trust the rally only insofar as we are able to monitor its vital signs each step of the way (much as we have been doing in Apple). Thus is our interest likely to mount as the futures begin to roll down into a telltale ‘C-D’ leg. I’ve sketched this in the chart, filling in a hypothetical midpoint pivot that can tell us whether the rally from Monday’s bear-trap low has been mere bravado.  It’ll be a great place to try bottom-fishing via camouflage in any case, but if the trade doesn’t produce a satisfying win, look out below, since the ‘D’ target of the pattern will be in play.  Stay tuned for detailed guidance. If you would like to be alerted to trading opportunities in real time, check the ‘E-Mail Notifications’ box on your account page.  Click here for a free 7-day trial to Rick’s Picks