The 167.77 rally target we’ve been using is still valid, although yesterday’s bend in the road has made it somewhat less enticing as a place to try shorting with a tight stop-loss. Thursday’s rally was not bullishly impulsive because it merely tied the 10/10 peak, but the pattern could yield an attractive opportunity to get long nonetheless, especially since I’ve been featuring “illegitimate” ABCs like this one as an alternative to a standard-issue pattern that has attracted too much riff-raff, particularly the algo traders. Barring some horrific headline overnight, your bias should be bullish, using an entry signal off the pattern shown. If you want to further reduce the entry risk, drop down to a lesser chart for your entry signal. I’ll be in the chat room in any case if your unsure of how to proceed. Be ready for a stall at p=167.74, since it closely coincides with the 167.77 target of the larger pattern. ______ UPDATE (October 27, 2:41 a.m. EDT): DIA peaked Friday at 167.79, two cents from our rally target, so you should be mostly out of any long positions held on the way up. If you made money and reversed the position at the target by buying out-of-the-money put options, I’d suggest stopping yourself out if they trade for 0.15-0.20 less than you paid for them.
