Knee-jerk hysteria triggered by Bernanke’s empty blather on Capitol Hill created a bull-trap high that exceeded my rally target by 6.50 points. The subsequent massacre has traced out the potential usable ABC correction shown in the chart. Camouflageurs looking to get short (or long) should note its 1641.25 midpoint support and 1623.75 target. If you’re just spectating, expect a fall to the lower number if the first is breached by more than three ticks. _______ UPDATE (12:35 a.m. EDT): The overnight low was almost exactly midway between the two targets given above. The lower of them will remain valid in theory until such time as the point ‘C’ of the pattern has been exceeded to the upside. However, the market’s sharp bounce has made this unlikely. It is astounding, inscrutable and…ghastly that sellers were able to generate no follow-through whatsoever this morning after last night’s avalanche. Hack off this steroid-addled market’s arms and legs and it would feel no pain — would sprint the 440 in record time on the stumps of its bleeding legs.
