Sellers tripped a bearish signal Friday that implied more downside to at least 1285.10, or possibly even 1263.10. Bulls have earned a reprieve Sunday night with a $10 thrust caused by who-knows-what. There is as yet no news on the tape that might account for the rally, so it may prove to have been just a short-squeeze hiccup. To be sure, I’d suggest regarding it as mere noise until such time as the futures print 1312.40. Night owls attempting to get long should wait for at least one false entry signal before jumping aboard (see inset). Alternatively, you can use a ‘timed’ buy-stop to initiate the trade, or ‘camouflage’ on the three-minute chart are less. There are undoubtedly easier ways to get aboard — but not safer, given the strong bullish enticement of the impulse leg shown. If you’re playing for the downside targets given above, they will remain valid until such time as 1307.10 — the point C of the bearish pattern — is exceeded to the upside.
