I’m tracking a single short contract with a cost basis of 1176.90. That price reflects paper gains on three contracts already exited. At Tuesday’s lows, the gain would have amounted to $6300 per contract. I’d suggested swinging for the fence with this position, using a target at 1044.50, but we should implement a stop-loss nonetheless. Specifically, I’ll recommend placing the stop at 1142.80, since that’s where a rally would generate a bullish impulse leg on the 240-minute chart (see inset). The stop is good for today only and would be tripped only if the rally is visibly uncorrected after exceeding the first peak at 1138.00. _______ UPDATE (November 4, 7:24 p.m. ET): Lower the stop-loss to 1124.20 for the 25% of the original position that remains. At that price, a rally would surpass two ‘external’ peaks on the 30-minute chart, generating a bullish impulse leg. Although this would pose a small but not insignificant threat to our short position, it could also set up a ‘camouflage’ buying opportunity for the alert Pivoteer. This would occur if there’s a shallow pullback from just above 1124.20. If you are uncertain about how to exploit such an opening, inquire in the chat room when appropriate. _______ UPDATE (November 5, 7:56 p.m.): Thursday’s hum-drum action requires no change in our strategy. However, traders should be alert to a possible running of stops just below 1100.00, followed by a bear-trap, short-squeeze rally.
