I’ve been giving the bullish case the benefit of the doubt as the futures have fallen by $157 over the last month, mainly because the impulse leg generated by August’s rally to 1434.00 is intact down to 1271.80. Although yesterday’s low held $5 above that number, the daily chart strongly persuades that the selloff will continue to at least 1250.50. You can buy aggressively at that price because the downtrending ABC pattern is such a beauty (see inset). However, because we don’t have a crystal ball, I’ll suggest risking only small change on the stop-loss. Camouflageurs should shoot for four contracts, but if you try this gambit with a straight bid, place it at 1250.60 for a single contract, stop 1249.80. _______ UPDATE (10:12 a.m. EDT): The futures are rallying today, but if the buying goes just an inch farther, reaching the 1312.90 midpoint pivot of the pattern shown, this should be viewed as a ‘camo’ shorting opportunity. In any event, the rally would have to hit 1375.50 to negate the 1250.50 target.
