Bears spent the entire day constructing a trap to spring on themselves. It worked. In the final hour, starting from a wallow just inches off the intraday low, they punched up a 22-point rally in a little more than an hour — equivalent to a Dow thrust of nearly 200 points. It looks puny on the hourly chart (see inset) compared to last week’s selloff because it was. But it left bears badly on the ropes, presumably ready for more self-abuse when Tuesday dawns. Expect them to extend the short squeeze to at least 2035.75, a ‘Hidden Pivot midpoint’ resistance. Night owls who have been long for the ride can try shorting there with a 2036.10 stop-loss, but if the pivot is exceeded by at least four points, it would become a ‘mechanical’ buy on a pullback for subscribers who are familiar with the simple rules for this type of trade. As always, an easy move through each Hidden Pivot level would imply the next will be reached.
