Noting the deranged spasms that numerous trading vehicles traced out yesterday, I checked the news to learn the ostensible cause — in this case, the non-news that the Fed would continue Operation Twist through 2012. Gee, wow, yippee.  Once the knee-jerk histrionics have subsided we should expect the Dow to continue just a bit higher in preparation for its long-awaited swan dive. My goal is to short a top that will be distinctively recognizable as such after-the-fact.  The risk, of course, is that I will miss this top while greedily attempting to milk the rally for that last oh-so-satisfying inch.

In attempting to catch that always-elusive moment, I’d welcome some help from chat-roomers, since the next thousand-point move in the Dow has home-run potential in comparison to whatever base-hits you may be pondering at the moment. To guide you in this class project, I’ll note that my own forecast calls for a tradable peak at 12931, or perhaps 12973 if any higher. The provenance of each of these ‘D’ Hidden Pivots is shown in the accompanying chart.  As a matter or practice, however, we should already be looking for the downturn on charts of lesser degree — but no later, in any case, than on a print below 12696, where the hourly chart would ‘go impulsive’ today. Please note as well that any shorts from above 12931 would be going up against a fresh bullish impulse leg on the intraday charts, implying that camouflage will be required to get this trade done.  Want to join in our group effort to nail the top?  Click here for a free trial subscription to Rick’s Picks, including access to the chat room 24/7.