We rode a tracking position in the December contract to within an inch of the recent top, logging a theoretical gain of nearly $9000 on the trade. However, I am recommending shorts from the 2270.00 rally target shown only to those of you who held long positions at least part of the way up, or who are comfortable with using the ‘camouflage’ technique to get short at these levels. The expertise to do so is nearly always present in the chat room, and that is therefore where you should seek guidance if you’re keen on getting short. As you can see, last week’s record high at 2273.00 exceeded by just a hair (3.00 points, actually) a target that had been ten months in coming. It’s no stretch to think that the high could prove to be a very important one, perhaps even marking the end of the bull market begun in March 2009. However, we will assume no such thing for the time being, since we do not pretend to have a crystal ball. But if the futures were to close for two consecutive days above 2270.00, or trade more than 5.00 points above it intraday, I would infer that another major bull leg is about to unfold. A 2417.50 rally target would then obtain — equivalent to around Dow 21000. As things stand, a pullback now to 2223.00 would in theory be a ‘mechanical’ buy for a ride to that number. ________ UPDATE (Dec 19, 9:37 p.m. ET): A tedious scuddle sideways on Monday did nothing to change the current outlook. A decisive push past the ‘secondary pivot’ at 2275.69 would signal that buyers are about to make a run at 2309.50, a rally target broached here earlier and my nearest significant price objective. Alternatively, a breach to the downside of 2227.75 would turn the hourly chart bearish.
