There’s a bigger, bullish pattern at work that goes back to early June’s lows, but the one we should focus on for now projects to 13,003. Its point ‘B’ high is legitimately impulsive, and that’s why it makes sense to treat it respectfully. Notice that Friday’s close was 30 points above the p midpoint. That’s probably enough to ensure further progress toward the ‘D’ target, but if today’s settlement is even further above p, that would all but clinch the move. Traders can short this move by buying four DIA September 126 puts if and when the underlying vehicle gets within 0.15 points of 129.51., the equivalent target. ______ UPDATE (July 16, 7:40 p.m.): Yesterday’s gratuitous chop has left my forecast and advice unchanged. _______ UPDATE (July 23): Last week’s top at 12978 got us close enough to the target that we were able to short DIA by buying September 126 puts. The broad averages have plummeted 400 points since, allowing us to take a partial profit on the puts, effectively reducing the cost-basis on those we still hold to less than 0.50 per. (They traded as high as 3.95 this morning.)
