Although the S&Ps have sold off hard following June 8’s record high, this has not negated some quite bullish rally targets I had broached here two weeks earlier. Basis the June contract, the nearest lay at 2169.25. The equivalent target for the September futures is 2159.25, and it is still very much in play, as is an even bigger-picture target at 2240.00 (see inset) that equates to one at 2250.00 previously given. Notice that the September contract could have been bought ‘mechanically’ earlier this week at 2070.00, stop 2013.75 (!) when it pulled back to the green line (see inset) after drifting for nearly a month above it. This was a risky play, but there was another chance to get long at Thursday’s bombed-out, bear-trap low, since it fell within 1.25 points of the correction target I’d disseminated the night before. Unfortunately, the target was for the June contract, which is no longer actively traded. The equivalent downside target for the September, 2045.00, did not work as precisely, since the futures bottomed at 2040.75. Presumably because of this, no subscribers reported getting aboard at the low ahead of the 33-point trampoline bounce that ensued.
Looking just ahead, bulls will be back on the offensive if they can push the futures above the ‘external’ peaks I’ve labeled #1 and #2, especially if they do so by Friday’s close. Your trading bias should be bullish when the day begins, however, owing to the ‘mechanical’ buy signal in effect from the big pattern. To get aboard, I’d suggest creating an entry trigger camouflage-style using an uptrending ABC pattern on the five-minute chart or less.