We started the day with an aging, 2205.25 rally target that has eluded bulls for nearly a week. The futures rose moderately to 2203.00 early in the session, but repeated attempts to cover the last inch were unsuccessful. Assuming buyers get there today, two targets I’ve aired here before that come from larger patterns will be in play. The first lies at 2240.50; the second, at 2250.00. Either would be a logical place for the bull to catch its breath, but if neither shows much stopping power, that would imply significantly higher prices are likely. In the meantime, the green, red and pink lines can be used to generate ‘mechanical’ entry signals. This entails placing bids at each line after it has been comfortably exceeded for a few bars. The entry risk for these trades is relatively high in comparison to other types of penny-pinching entry tactics we use, such a ‘counterintuitive’ and ‘camouflage’ entries, but it is the ‘mechanical’ signal itself that is valuable for purposes of timing entries for optimal ease.
