Using the same chart as the one shown, we’d been expecting the futures to come down to exactly 1888.44 before launching into a corrective rally worthy of our attention. On Monday, sellers drove this vehicle down to 1892.50, four points from our target. Is that close enough for us to infer that sellers are done pummeling the S&Ps for now? The jury is still out, but I have my doubts that the selloff will abate for more than a couple of days. In any case, the chart I’ve reproduced today inverts our recent, bearish point of view to focus on a lesser uptrend that can help us assess the eagerness of buyers if Monday’s weak short-squeeze rally should turn vicious. Specifically, the rally would need to hit 1954.88 to trigger a theoretical buy signal; and to exceed 2017.25, the midpoint Hidden Pivot of the pattern, to give bears serious reason to worry.
