I’ll stick with the 2047.25 rally target shown to give us a tradable and potentially important top. The ABC pattern from which it is derived has picked up some precise hits at the midpoint and secondary Hidden Pivots (i.e., p and p2), confirming that it is indeed working. Actually that would be an understatement, since a trader could have used either of those price points last week to get long easily with a ‘mechanical’ bid that was good for a ride of as much as 40 points. If you caught a piece of the move, I’ll suggest shorting 2047.25 aggressively with a stop-loss as wide as 2050.25. As always, a ‘camouflage’ entry can be used to shrink the initial risk to as little as 3-4 ticks. I’d have felt better if the short had triggered toward the end of Friday’s session, since headlines over the weekend are seldom going to be felicitous. In any event, we are stuck with an unachieved target that could remain so, at least for a while, if stocks fall from the get-go on Monday. In all such instances, the obvious way to avoid getting shut out of a trade that depends on a price reversal from a target that may or may not be reached — is to use a ‘camouflage’ entry trigger. ________ UPDATE (March 21, 8:12 p.m. ET): Zzzzzzzz. Price action has waxed hypnotic, making the task of getting short from 2047.25 about as appealing as a cheese grater on the shins. The target still looks likely to produce a tradable top, but I cannot come up with a low-stress way to leverage it. At best, the process is going to be laborious, tedious and frustrating. ______ UPDATE (March 22, 4:02 p.m.): The futures have sold off nine points so far after topping at 2047.25, a single tick above the target I’d drum-rolled. In the chat room, I suggested covering half of the position when the futures were trading around 2040.00. For tracking purposes, we are now short two contracts with a profit-adjusted cost basis of 2054.00. For now, tie them to a stop-loss at 2048.25.
