Bears have struggled mightily since the stock market plummeted for a few delightful days in August. The broad averages became extremely oversold during that time but have since bounced repeatedly, and often viciously, disabusing bears of the dangerous idea that making money in a bear market should be easy. They’ve learned instead that it requires guts, deep pockets and a jittery finger on the panic button just to survive, never mind profit effortlessly.
Now, with summer over, they’ll be looking for a return to serious business (if the shabby flim-flam game that is Wall Street could ever be called serious). From a technical standpoint, the hourly chart is bearish, targeted on the 1852.50 midpoint pivot shown. That would equate to an approximately 500-point drop in the Dow — a day’s work if sellers come primed for the task by an eventful night in European and Asian markets. Although the futures could fall a further 130 points before reaching the D target, I’d still recommend bottom-fishing at 1852.50 with a very tight stop, and at 1786.75 if the higher number should give way. As always, you can step up the size if you’ve been short for the ride south. _______ UPDATE (7:39 a.m. EDT): DaBoyz have triggered off a rather vicious short-squeeze overnight (see above), putting in play the 1948.75 p2 pivot from (on the 30m) a=1867.00 on 8/26.