We gauge the strength of rallies and declines not only by how easily they push past Hidden Pivot ‘p’ and ‘D’ targets, but by how long it takes them to do so. In this case, it took the E-Mini S&Ps four days to blow past a 1437.75 target (basis the December contract) that we discovered — and which some of you shorted — during last Wednesday’s tutorial session. The impulsive thrust will have bullish implications for the near term, but not powerfully so. If the futures had pushed decisively above the 1437.75 pivot within hours of first encountering it, we might have inferred that the obligatory Christimas rally was going to be a real doozey. As things stand, however, because it took four days and a running start to achieve this modest feat, we should expect more of a wafting effect into year’s end as portfolio managers take advantage of the absence of sellers, including bears now in retreat.
Most immediately, the rally would appear to have a lock on the 1447.75 target shown. It’s not far above, and I would strongly recommended shorting there, if only for a scalp-trade. ‘Camouflageurs’ should seek to initiate the trade on the 5-minute chart or less, using a stop-loss of no more than five ticks per contract. If you’re not familiar with the technique, get short simply by offering at 1447.75, stop 1448.50. In either case, you’ll be on your own if the order fills. Of course, it is suggested that you maintain the 1:3 risk:reward that I recommend for all trades from start to finish. Please note that this one is likely to fill at night if the futures rally only moderately from the day-session settlement price. ______ UPDATE (2:27 p.m. EST): In the soporific flux of an especially tedious day, the futures have been able to head-fake their way no higher than 1446.00 — a smidgen shy of our short offer. Cancel it for now, since it’s more trouble than it’s worth.