ESH16 – March E-Mini S&P (Last:1981.00)

Tuesday's monster rallySince I heard from several subscribers who used Tuesday’s tout to get long before the futures blasted off into the wild blue yonder, I’ve established a tracking position consisting of four contracts with an initial cost basis of 1941.25.  Assuming half the position was exited for a profit at the midpoint Hidden Pivot, 1964.75, that leaves two contracts with an adjusted cost basis of 1918.25. Now, offer a single contract at 1982.25 (p2) while tying both of them, o-c-o, to a stop-loss at  1938.00. You should also plan on exiting the last contract at or near 2002.75, the ‘D’ target of the  pattern shown. Use a dynamic trailing stop as the target is approached, meaning continually shrink the stop so that it is never greater than a third of what you stand to gain if the target is hit. _______ UPDATE (7:46 p.m. ET): The futures spent the day head-butting the 1982.25 Hidden Pivot resistance noted above, allowing an easy exit from the third of four contracts originally tracked. Now, as suggested here earlier, to exit the last contract, you should use a ‘dynamic’ trailing stop as 2002.75 is approached, continually shrinking the stop so that it is never greater than a third of what you stand to gain if 2002.75 us reached. If we impute paper gains booked so far to the single contract that remains, it would lower our cost basis to 1854.25, implying a total gain so far of $6325.  Traders who want to get long belatedly for a shot at 2002.75 should try to acquire more contracts with a mechanical bid at p2=1982.25, stop 1975.25. It would apply only after p2 has been exceeded by at least seven  points.