It’s tempting to think the sleep-inducing dirge that has followed Tuesday’s explosive rally is setting up a nasty plunge. No less seductive, perhaps, is the notion that the 2002.25 rally target we’ve been using for this vehicle in recent weeks will mark a very major top. For the record, I’d be surprised if we don’t get at least a tradable pullback from that number if and when it is reached. But I would caution subscribers against becoming married to it. Consider the alternative scenario suggested in the accompanying chart. It shows a rally target at 2025.50 that is corroborated by the magnetic price action near p and p2. The pattern is clearly ‘working’ — well enough for me to recommend a ‘mechanical’ buy on a pullback to 1990.81, stop 1979.25, after p2 it has been exceeded first by at least 10 points for several bars. This would be in addition to the single-contract position I am already tracking: long, effectively, from 1854.25, with a 2002.25 objective.
