Although the broad averages ended the week with a short-covering rally sprung from Thursday’s lows, the decline that preceded it did serious damage to the daily chart. Specifically, it surpassed three prior lows, two of them ‘external’, before a modest recovery set in. The bounce would have to continue for another 435 points to negate the effects of the breakdown. That would surpass two prior peaks, the higher of which, 17935, was recorded on May 10. Even then, with the creation of ‘dueling impulse legs’ on the daily chart, the futures would be a better bet to muddle sideways for a spell than to challenge the old record high at 18167. ______ UPDATE (May 25, 7:20 p..m.): Mission nearly accomplished, since the 17891 peak of today’s short-squeeze fell just 44 points shy of the 17935 benchmark given above.
