The futures spent the entire week not quite achieving the 2114.25 rally target shown. Although bulls obviously were not brimming with vigor, neither were they flashing signs of terminal exhaustion, incipient or otherwise. One suspects they have merely paused to take the measure of two imposing peaks near 2120 that were recorded, respectively, in May and July, and which have so far contained a bull market now well into its seventh year.
The mild weakness would grow more serious if, having failed to reach the target, the December contract were to dive to 2051.00 Monday or Tuesday. The move would exceed two prior lows on the daily chart, transforming merely flaccid price action into a bearish impulse leg carrying a hint of menace. It is not what I expect, however. More likely in my estimation is a choppy few days, with a mildly bearish bias, and then a running start at the old highs. If the pullback hits 2073.00, that would trip a ‘mechanical’ buy signal, stop 2045.00, for a shot at 2156.50 (daily chart, A=1785.00 on 10/15/14). The trade would pose initial theoretical risk of $1400 per contract, but in practice we’d try to cut it down to $65 or less by using the ‘camouflage’ entry technique. If and when the time comes, tune to the chat room if you want to see how this is done in real time.