Bears shouldn’t get their hopes too high just because the futures dove sharply after trapping bulls with an overnight feint to 2082.25. On three hours’ sleep over the last two days, just before boarding a plane at 8:00 a.m., I erroneously inferred that this almost precisely matched the target I’d sent out Wednesday night. It didn’t, but my forecast had been sufficiently bullish nevertheless that several subscribers evidently were encouraged to jump on the rally without hesitation. Looking just ahead, you should notice that buyers pushed this vehicle above two external peaks (see inset) before it reversed and went into a quite nasty dive. That has left a bullish impulse leg that will continue to exist unless 1992.25 (the point A low) is exceeded to the downside. Any rally of at least 22.50 points in the meantime would trip a theoretical buy signal while also warning bears not to get too aggressively in the way._______UPDATE (7:58 a.m. EST): The correction has come down precisely to the 2012.00 midpoint support of this pattern on the hourly chart: a=2050.50 (Thursday, 3:00 p.m.); b= 2015.50 (8:00 p.m.); and c=2029.50 (11:00 p.m.). (Click here to see a chart that illustrates the pattern.) Night owls could have reaped a gain of as much as $600 per contract on the initial bounce, but this is not the time to get in, even if the support is still holding so far. If it fails, look for a further drop to at least p2=2003.25, or to d=1994.50 if any lower. Both of these pivots should evince a bounce sufficiently precise for bottom-fishing with a 1.00-point stop-loss. They can also be used to establish mechanical short positions, provided our criteria for this type of trade are met (the details of which are proprietary and covered in great detail in the monthly Hidden Pivot Webinar).
