The futures ended the day a tick from the 2093.75 rally target I’d disseminated in the chat room five hours earlier. As I noted facetiously at day’s end, such was the vigor of the rally that it would have worked out to a profit of $3.57/hour for anyone who got long early in the session. The rally was more of a waft, actually — virtually all of it attributable to short-covering. But merely because there are no bullish buyers is not necessarily a reason why the rally cannot continue. If it does, you should be prepared to use the 2106.25 target that I flagged in my update as a minimum upside projection for the near term. It would be subject to Hidden Pivot resistance (p2) at 2100.25. Night owls can try getting long ‘mechanically’ by bidding 2093.75, stop 2091.50, once p=2093.75 has been exceeded by at least three points. Keep in mind that at least several bars must pass between the upside penetration of p and the retracement to that number before you enter a bid. FYI, the point ‘A’ low of the pattern (on the 60-minute chart) is 2061.50 (3:00 a.m. EDT Monday).
Although I’m convinced the market is in a broad topping pattern — indeed, breadth may already have made its bull-market high — I doubt that 2106.25 will contain this rally. (The target is quite short-able nonetheless, and I would strongly encourage you to do so, especially if you’ve been long on the approach.) More interesting than my Hidden Pivot resistance is the trendline in the chart shown. If it were to be reached today, it comes in around 2119.75, with a downward slope of about 0.25 points per day. You could short it with a stop-loss of perhaps 1.00 point, but a ‘camouflage’ entry would offer tighter control of risk. Camouflage entries have not worked well in this vehicle in recent months, but in this case, because the trendline is somewhat obscure, the tactic may be worth a try. _______ UPDATE (9:10 p.m. EDT): No change. I still like the 2119.75 target given above — not only as a price objective for a bull trade, but as a place to reverse the position and get short. Concerning the former, subscribers who want to see a perfect set-up for a mechanical trade should check out, on the 15-minute chart, the pullback to p2=2100.25 that has occurred Tuesday night.