The night shift, which attracts some of the most talented dirtballs in the trading world, is having trouble walking the futures higher Monday night. So far, a 4.00-point mark-up is all they’ve been able to extort from widows, orphans and pensioners who evidently still don’t know that the broad averages have gotten pounded for two straight days. More seriously, in fact, it is short-covering that is providing the lift right now, and if bears don’t know enough to stay cool and back off, they deserve to get buried by the next avalanche. This is all speculative on my part, mind you, but notice how little selling it would take to generate a robustly bearish impulse leg on the daily chart (see inset). Price action could therefore turn very erratic between now and Tuesday’s opening bell, but please note: This is when you can flourish if you apply the simple rules of ‘camouflage’ in looking for tradable impulse legs amidst the flux of fear and hysteria. Accordingly, I’ll suggest monitoring the hourly chart and trading on the 3-minute, if and when any of the key lows that I’ve flagged is breached. _______ UPDATE (12:07 p.m. ET): DaBoyz have popped the futures for a so-far 16-point short squeeze off a deftly engineered, spike low. The result is a robustly bullish impulse leg on the hourly chart that could yield a trade from the long side (A=1830.75; B=not yet formed).
