The pattern shown, with a 1462.00 rally target, is as pretty a one as we’re going to see. Since I haven’t mentioned it before, it is sufficiently underexposed that I’ll recommend shorting with a no-tricks, 1462.00 offer and a 1463.25 stop-loss. Make no mistake, we’re standing in the path of a potential juggernaut, and so we should be prepared to get steam-rollered. But if that happens, we’ll at least have a visceral understanding of the power behind this rally. Since a theoretical 1.25 points will be at risk initially, partial profit-taking is advised on a pullback to 1458.25 (1462.00 – 3 x 1.25). But if the trade is stopped out, you should assume the rally is bound for more daunting resistance at either 1470.00 or 1480.50, two Hidden Pivots flagged here earlier. As noted at the time, camouflage should be used to short either of those two numbers (although in a pinch you could short the higher with a 1481.25 stop-loss). We’ll plan on taking the short home for the weekend only if the futures close 12 or more points below where the position was initiated. ______ UPDATE (1:41 p.m. EDT): Traders who got short at 1462.00 would have experienced only brief pleasure as the futures fell to 1460.00 after making an interim high at 1462.75. However, the position was subsequently stopped out at 1463.00 (enroute to a 1468.00 intraday high), resulting in a $50 loss per contract. Although ESZ has fallen since, the fact that it exceeded 1462.00 at all — by a decisive 6 points, in fact — implies that buyers will be back when nedxt week begins if not sooner.
