The four-contract tracking position initially acquired on December 4 at 2185.75 has been reduced by profit taking to a single contract with an effective cost basis of 2087.25. The futures have since shredded their way past Hidden Pivots at 2040.25 and 2050.00 that we might have expected to show more pluck. Be that as it may, a 2299.00 rally target now obtains. We’ll shift to an even higher one at 2417.50 if and when 2299.00 is obliterated, but for now the lower number can be used to manage the risk of the open trade. From this point forward, I’ll suggest a ‘dynamic’ trailing stop with the 2299.00 objective held in mind. This means that as you trail the stop-loss on the way up, you should shrink it so that you are never risking more than $1 to make $3. To illustrate, based on Friday’s intraday high at 2261.25, you should be using a trailing stop of 12.75 points, or a third of what you stand to gain if the futures reach the 2299.00 target. Thus, based on the 2261.25 high, you would exit the position if the futures fell back to 2248.50. If on Monday the December contract were to continue higher — to, say, 2271.00 — from which peak there would be 28 points of theoretical potential profit remaining, your trailing stop would be a third of that, or 9.25 points, and you would therefore exit the remaining contract on a pullback to 2261.75. Above 2285.00, you can substitute an ‘impulsive’ stop, provided you are familiar with this tactic. That would increase your chances of exiting at the target rather than being shaken out just beneath it due to the relatively minuscule ‘dynamic’ stop required as the futures close on 2299.00. Trading note: With 31 points of upside potential remaining to the target, it’s still possible to catch a ride on a ‘local’ elevator using ABC rally patterns of lesser degree. (Check out the ES tout dated December 4 in the archive if you want to see a precise hypothetical example I’d sketched that worked out beautifully.) Stay tuned to the chat room if you’re interested, since there evidently are more than a few subscribers who have been actively trading this rally. It has been tracking Hidden Pivot targets with astonishing precision, making it possible to exploit minor swing-highs and -lows with three-tick precision. If you need to be convinced, check out my chat room posts on Friday, with their time stamps, versus actual price action of ES on the lesser charts. _______ UPDATE (Dec 13, 9:16 p.m. ET): The single contract remaining in the tracking position is still ‘live’. However, because the futures have gotten within 18 points of the 2299.00 target, we should use an impulsive stop based on the 15-minute chart rather than the ’60’. Presently, it would take an uncorrected swoon to 2264.75 to stop out our position. _______ UPDATE (Dec 14, 7:25 p.m.): The tracking position initiated ten days ago at much lower levels was stopped out earlier today at 2264.75 for a theoretical profit of $8875 less commissions. As noted in my latest update for the March contract, I will risk nearly half of this gain to establish a new, bullish tracking position in the March contract via a 2241.75 bid, stop 2219.00. The trade has yet to trigger, but it’s close. _______UPDATE (Dec 15): In my last update for the March contract, I suggested holding off on the trade until next week, since the futures took off today without first touching the red line where our bid was positioned.
