Subscribers could have come away with a gain of as much as $5500 per contract on a short position that triggered on Wednesday and was covered early in Friday’s session. The theoretical profit would have been $650 higher had I not suggested raising the stop-loss to 2076.75 from 2063.25 shortly after the opening bell. The futures had come within an inch of the stop three times overnight, but without touching it. Then, shortly before the opening, it looked like it would hold when the futures dove 16 points to 2046.75. But when the regular session began, they rebounded with unstoppable power, not only recouping the 16 points, but continuing steadily higher for the remainder of the day. The 46-point reversal left the futures just below the week’s high at 2105.00, but well-positioned to continue higher on Monday toward the 2126.25 target (see inset) that has served us since mid-November as a minimum rally target. ‘Mechanical’ trades have been working well in this vehicle, and traders should therefore look for an opportunity to get long on a pullback to p2=2094.31 once it has been exceeded by 10-14 points. A relative wide stop-loss at 2084.00 would obtain, but it can be cut down to size by using a ‘camouflage’ entry on the pullback to 2094.31, provided it occurs.
