As I’ve noted in ‘Today’s Action’, merely knowing where the S&Ps are likely to top does not necessarily make it easy to short the little sonofabitch.  The futures have spent the last few days playing cat-and-mouse with our 1708.75 target without actually touching it.  Equally frustrating is that pullbacks have been shallow, suggesting we are seeing a consolidation rather than a distribution.  Even so, I’ll suggest sticking with the camouflage shorting strategy if you have the patience. Your odds will be best if you initiate the trade within a few ticks of the target rather than several points below it.

And while you’re waiting, consider taking a small shot from the long side, since any profits you make on a rally toward 1708.75 could be used to cushion a wider stop-loss for the eventual short.  An example of a set-up that traders could bottom-fish without camouflage and using a stop-loss as tight as two ticks (!) is shown in the accompanying chart. _______ UPDATE (11:21 a.m. EDT):  The futures have tanked this morning after having gone no higher than 1703.50.  We were well prepared for this drop, so it’s possible some of you may have gotten short. If so, please let me know in the chat room and I’ll establish a tracking position for your further guidance. For now, though, you should cover half the position and let the rest ride with a very generous stop-loss based, perhaps, on an impulsive rally on the 5-minute chart.  At the moment, that would imply an uncorrected pop to 1695.75.