On the weekly chart, the pullback from the 1263.90 peak recorded a week ago has yet to negate the possibility of an uncorrected rally exceeding a key high at 1308 that I’ve labeled ‘The Matterhorn’. Were that to occur, I’d infer there’s a good chance that bulls have finally broken the back of the bear market begun 53 months ago. More immediately, they seem content to play toe-sies with a minor midpoint resistance at 1232.65 (see inset). Once past this Hidden Pivot level, however, the futures will become an odds-on bet to continue to at least p2=1253.23, or to D=1273.80 if any higher. Although it is mildly discouraging that bulls have made so little headway since a theoretical buy signal was tripped on 2/16 at 1212.08, we should notice as well that corrective action since then has been decidedly timid. ______ UPDATE (February 24, 8:35 p.m. EST): A promising rally reversed from a mid-morning peak that lay just a hair above the 1253.23 pivot noted above. In the chat room, several subscribers reported taking a profitable ride from the red line up to the pink, where they apparently exited. Despite the selloff that ensued, the 1273.80 rally target remains viable. Depending on how far this correction goes, traders might look for a ‘mechanical’ buying opportunity at x, p or p2. A stop-loss equal to one-third of the difference between the entry price and 1273.80 should be used.
