The March contract has been tediously biding its time for more than a week, presumably consolidating for the next push higher. Although yesterday’s price action tripped numerous false ‘buy’ signals tied to the big pattern shown (with a Hidden Pivot target at 22.300), we can focus on much smaller stuff to reduce the risk of getting aboard. There are many ‘external’ peaks on the 5-minute chart (see inset) that could prove suitable for this purpose, but the goal in any case will be to hold theoretical entry risk to $50 or less per contract. _______ UPDATE February 26, 10:28 p.m. EST): Yesterday’s downdraft has the potential to send the futures down to as low as 20.395 this week, although bulls will have a rescue opportunity at exactly 20.870, the midpoint support shown (see inset). Either number can be bottom-fished, but I’d risk no more than 3-4 ticks theoretical per contact if you use a limit bid. _______ UPDATE (February 28, 2:43 a.m.): Bulls turned a potential rout into a duel Thursday, but it was too close to call early Friday morning. If they have prevailed overnight, look for the rally to hit 21.465, and anything above that would likely set a bullish tone for next week. Alternatively, a resumption of the downtrend could catch a bounce from 20.955, but any lower would portend more weakness over the near term to as low as 20.430. Both scenarios are shown in the chart.
