If you’re keeping score, the ‘camouflage’ trading strategy that I detailed here for night owls Monday evening could have produced a profit of as much as $1400 per contract. The signal triggered at around 1:00 a.m. EDT, with entry coming at exactly 2002.00. Cashing in on the trade required patience, however, since it took more than five hours for the futures to take flight, and another six for a second leg to unfold near the end of what had been a very tedious, choppy day. Looking ahead, chat-room punters seemed eager to fade the trend, but their attempts to pick a top got shredded serially as the futures rose in the final hour to finish near the intraday high.
Looking ahead, the rally would begin to look like more than a perfunctory bounce from Thursday’s bombed-out lows if and when it exceeds the #2 ‘external’ peak at 2064.75 shown in the chart (see inset). That’s a fairly speculative outcome at this point, and bears have ample reason to bet against it, albeit cautiously with tight stops above well-defined, minor-rally targets. The bigger picture requires a two-day close above 2065.38 to suggest that the bulls have regained control. That’s a midpoint Hidden Pivot resistance on the daily chart, and it comes from these coordinates: A=1951.75 (3/10); B= 2119.50 (6/24); and C= 1981.50.