Tuesday’s rally demonstrated that when buying interest, even from short-covering bears, is almost non-existent, stocks will continue to waft higher in this environment. There was nothing driving the broad averages upward; rather, it was an absence of sellers that made stocks seem buoyant. Pullbacks were very shallow, and as is nearly always the case these days, the number to beat was a high recorded on vaporous volume before the opening bell. That number was 2097.25, and it turned magnetic in the final hour after bears decided to throw in the towel. The futures were headed in after-hours trading to at least 2104.00, the ‘secondary’ Hidden Pivot resistance shown. It can be shorted with a stop-loss as tight as 2105.25, but I am recommending the trade only to those who have made money being long first. As always, a decisive breach of so clear a Hidden Pivot would portend more upside to the next — in this case 2116.75. Meanwhile, the 2126.25 rally target of a larger pattern that we’ve been monitoring for weeks still stands. How aggressively you get short there should be based on how much profit you’ve made being long on the way up. _______ UPDATE (11:22 a.m. EST): The futures topped at 2105.00 (in the dead of night, as always, on near-zero volume). If you’re still short, I’ll suggest swinging for the fences with a break-even stop-loss.
