We’re long a single contract from, effectively, 1427, using an impulse-leg stop-loss that will give us a better chance of weathering adverse swings than a conventional stop-loss. I’d suggested using the 10-minute chart for this purpose, but it has grown too tricky tonight and I will therefore suggest zooming down to the 5-minute. To illustrate, at this moment, it would take an uncorrected downdraft exceeding the 1470.30 low to pop us out of the trade. _______ UPDATE (11:19 a.m. EDT): Subscribers who followed my advice and exited overnight on the stop would have booked a $4300 profit for a one-day hold. The 1507.20 target given here earlier remains viable and is very likely to be reached, or at least closely approached. But don’t expect anything more than that until the futures have rested thoroughly, since there is also an important Fibonacci-based resistance at 1505.00. A rally to that number would represent a 0.618 retracement of the down-leg, visible on the weekly chart, from 1618.30 (3/22) to 1321.50 (4/19).
Taken together, the two rally targets are likely to exert a magnetic pull on this vehicle, and that’s why I say the target(s) have a good chance of being fulfilled over the near term. Please note that although we’d held a long contract from, effectively, 1427 with the goal of “swinging for the fences,” I found myself unable, as ever, to toss the basics of risk management out the window. As a result, we wound up swinging, merely, for extra bases and hit a double. FYI, a less gutsy approach, using a ‘dynamic’ trailing stop and the 1:3 risk/reward ratio that I advise for all trades, would have popped us out of the trade near 1477. That’s because, based on the so-far high of 1484, we had about 21 points of profit potential remaining from a move-to-target. Under the circumstances, using a dynamic trailing stop fixed at 1:3, at 1484 we should have been willing to risk an adverse move of no more than 7 points, or a third of what we stood to gain by holding out for the target.