We are still looking to get long, and the subtle ‘external’ peak at 1594.50 shown in the chart could provide the means to do so via camouflage. This trade set-up will work best if the rally to that peak is labored and choppy. If it is strong and easy, however, and therefore enticing to the herd, you should be prepared to initiate the trade via a buy-stop that comes up quickly. Ideally, the required b-c pullback will have come from within the range 1594.60-1595.10. I’ve sketched this out so that you can see exactly what kind of pattern will produce the best odds for us. _____ UPDATE (February 26, 2:48 a.m. EST): The pattern played out more or less as drawn, but entering on the 1594.50 ‘x’ signal took us only to the 1597.00 midpoint and a partial profit before things turned south. The failure of this minor ABCD pattern to reach its D target (see new chart) suggests more weakness ahead, so traders should be especially cautious if positioning from the long side.
