If you got short on New Year’s Eve near the major Hidden Pivot target at 1846.75 discovered by chat-room regular ‘Pietdup’, you should be starting to see the problem by now. Clearly, nailing the all-time high within a single tick confers no license to simply forget about one’s short position while it racks up profits over days, weeks and months. In fact, the futures have been head-butting the high nearly every other day lately, following up with swoons that will have lulled many a bear into thinking things were going swimmingly.

The problem of shorting the potential Mother of All Tops becomes even more difficult if you have used put options to cushion yourself against the inevitable swings. We did so in the Diamonds, but the puts even on good days have done no better than merely hold their own against time decay. Well, I never said it would be fun. Or easy. In any case, there’s not much more we can do right now — other, perhaps, than wait for a head-fake to new all-time highs. If this should occur via a rally into the range 1850-1860, we should look diligently for a way to get short via camouflage. In practice, this would entail catching a downtrending abc on a chart of perhaps 5-minute degree or less. Presumably, this would occur shortly after the futures have rallied to the ‘D’ target of a minor ABC rally. That’s how camouflage works, and it is the best way I can think of to take advantage of the kind of last-gasp, short-squeeze spike we should be expecting. Why should Mr. Market let any bear who is currently short escape without fatal impalement? More pain likely awaits, but we can console ourselves with the notion that it will be felt most acutely by those who refuse to see it coming.