Caterpillar is correcting an impressive impulse leg and bids fair to hit par on the next run-up. My hunch is that the spectacular gap created on the first trading day of the new year needs some backing and filling before the stock is ready to embark on a robust C-D leg. If the pattern shown, or a further evolution of it, trips an entry signal, be ready to jump on it via a chart of 15-minute degree or less. _____ UPDATE (11:01 p.m. EST): The stock looks a little too strong at the moment to bless us with an easy camo trade. That could imply entering at the point ‘x’ shown in the new chart, but it would have been too risky to have done so in the final hour yesterday. My hunch is that the entry trigger will be left in the dust by a gap-up opening Wednesday morning; or, if stocks are weak, rendered moot by a dip below the existing point C. Whatever happens, I’ll leave it up to you to improvise an entry strategy on-the-fly. If you’re interested, please don’t hesitate to query me about this when I’m in the chat room. _____ UPDATE (January 22 at 12:51 a.m. EST): Friday’s goosing put this runaway freight train on course for a run-up to 102.69 (daily chart, A=86.55 on 12/27 at 4 p.m. EST; B=95.67). The midpoint sibling lies just above, at 98.13. Camouflageurs should use May 10’s external peak at 97.39 to set up an entry trigger. Beware of a fleeting B-C pullback, since the rally looks strong enough to pull a hundred bulls with it. _______ UPDATE (February 5, 12:58 a.m. EST): Friday’s gap-up high at 99.70 missed the target by $3, but because it remains viable you should stay alert to the possibility of a second-wind rally and another shorting opportunity.
