This Flying Pig succumbed to gravity late in yesterday’s session, taking the nasty plunge we’d been expecting from the first. I opened an impromptu session at the start of the day after having suggested 45 minutes into it that traders short 1666.25, stop 1667.00. Alas, the three-tick stop-loss I’d advised missed the 1667.50 high by three tricks. A 13-point air-pocket eventually ensued, albeit after nearly five hours of screwing-the-pooch.
In retrospect, because we were so confident that a tradable top was coming somewhere near 1667.00, it would have been appropriate to short the less-than-ideal ‘camouflage’ pattern that dropped in our lap just off the day’s high. This follows something I’ve repeated to Pivoteers many times –that the first ‘camo’ opportunity following a turn from a ‘D’ target (or from a p midpoint) will usually be the best, least risky and easiest opportunity we’ll get to do the trade.
Going forward, and bearish though we be, we’ll still have to respect the fact that the impulsive rally from Friday’s 1650.00 low remains somewhat more powerful than yesterday’s barely impulsive downdraft (see inset). Predicting Tuesday’s price action is going to be a coin-toss at the moment, but to gauge sellers’ strength nonetheless, we should monitor price action at whatever ‘p’ support becomes manifest on the next leg down. This could happen overnight — may have happened by the time you read this — but that would not diminish the predictive value of price action at the Hidden Pivot midpoint. If you want to see everything I’ve said in this tout in graphical form, you should check out the chart, since it summarizes the information presented above.