Buyers seemed quite fatigued in holiday-shortened trading Friday, but even if they get second wind, the rally would likely be capped at 2081.50, a Hidden Pivot resistance that you could short with a stop-loss as tight as three ticks. If the futures sink, as seems more likely, look for the weakness to hit 2051.50, or perhaps 2042.50 if any lower. You can get short ‘mechanically’ if price action is similar to what I’ve drawn hypothetically. However, make sure you keep risk:reward in a 1:3 ratio, as our rules for this type of trade require. Beware that news concerning the Greek referendum could cause index futures to turn especially volatile Sunday night when they resume trading. _______ UPDATE (7:05 p.m. EDT): DaBoyz have opened this vehicle with a volume-less shakedown equivalent to about 300 Dow points. Since the news from Greece could have surprised no one, we should assume as we did last week that the selloff is entirely reflexive — knee-jerk behavior by institutional traders who must react in the same way they assume their colleagues and competitors will react. They are also attempting to exhaust sellers so that they can run the futures higher, unloading inventory when conditions are right later tonight or Monday morning. Keep in mind that even though the bounce from last Sunday night’s heavily oversold lows went nowhere, the eventual bottom occurred just seven points beneath the one that had been recorded Sunday night.
