Sellers were at pains yesterday to achieve a modest target at 2048.06, a Hidden Pivot support associated with the bearish pattern shown (see inset). The precise bounce a day earlier from the midpoint support at 2063.88 confirmed the legitimacy of the pattern itself, as well as its ‘D’ target at 2032.25. But with a 20-point head-start at the opening, bears could not put this troublemaker away. Although bulls proceeded to squander the advantage, leaving the trend unsettled at the final bell, they will have a chance to finish their business on Wednesday. Their task will be to complete the small, uptrending abc pattern at the righthand edge of the chart. This shouldn’t be too challenging, especially with the tailwind they were getting Tuesday night from short-covering bears. A decisive push above p=2068.75 Tuesday night or Wednesday would likely clinch a move to d=2080.25, implying there could be ‘mechanical’ buying opportunities on pullbacks to the Hidden Pivot levels associated with the pattern. _______ UPDATE (8:30 a.m. EST): The futures made their high a single tick from the 2068.75 midpoint pivot flagged above. As is the case nearly 100% of the time these days, the high was recorded in the middle of the night on volumeless trading. Ordinarily, I’d regard the failure to get past this Hidden Pivot as certain evidence of weaknes to come, especially since the relapse took out the point ‘C’ low of the pattern. However, sellers have been so completely lacking in conviction lately that I’ll assume they will act out only their impotence as the day wears on. A decline to p2=2048.06 would be my worst-case scenario under the circumstances; under the best, the futures would turn bullishly impulsive again with a rally exceeding the 2077.25 peak made yesterday on the way down.
