This vehicle has been moving very precisely in both directions relative to our Hidden Pivot targets — not that that has made it a breeze to trade. On Friday, a dive in the second half of the session reversed from a single tick above a midpoint support I’d flagged as tradable in the chat room. Then, a second attempt to breach the support in the final hour also failed. When downside progress is labored like this, we should infer that bulls hold the upper hand. This would imply more progress Sunday night, to at least 1835.50, the ‘D’ target of the minor ABC rally from Friday’s bottom. Bulls’ further progress this week would become likely if they are able to exceed that number by more than two or three ticks. Alternatively, if the futures head lower without having exceeded 1833.00, expect them to come down to at least the 1812.75 target shown. It can be bottom-fished with a stop-loss as tight as 1.00 point.
Note that all of the action on Thursday and Friday occurred below the 1846.75 target that I’d said might stop the rally for perhaps 4-5 days. For all we can guess at this point, it could prove to be the top of the bull market. Odds are against this, given that the bull has been chugging along for nearly five years. In any event, we’ll be better able to judge the long-term bull market’s health when we’ve seen how minor rallies and corrective patterns play out over the next few days. The first sign that something might be wrong is if the 1812.75 support is decisively smashed today or tomorrow.