The E-Mini S&Ps were a ‘mechanical’ buy Friday on the pullback to the green line, assuming entry was by-the-book. That is not what I recommended, however, nor am I suggesting it now, since we should use this tactic only when we are confident the ‘D’ target of a pattern will be reached. In this case, no such confidence could exist, since the C-D ‘follow-through’ leg of the pattern has taken so long to play out. However, neither is there strong reason to think stocks are about to collapse, since trading has been in such a tight range for weeks. Shares could collapse anyway, of course. But deliberately betting against what we expect, in contrarian fashion, can be very costly if we buy put options and stocks continue to scuddle sideways for an extended period. Realize that they have been doing so in the first place because so many traders are expecting a collapse. No matter. We’ll stick with our plan, shorting only at Hidden Pivot rally targets, not in the midst of mindless tedium. _______ UPDATE (October 24, 8:57 p.m. ET): Well shut my mouth! The futures faked lower on the opening bar, pulling back to the green bar before taking off like the proverbial bat out of hell. The intraday high at 2149.00 fell a smidgen shy of my aging target at 2152.25, but it remains valid nonetheless. I’m wary of shorting there, but you can attempt it in small size anyway, using a stop-loss no wider than 2153.25.
