Bears were their own worst enemy Monday, allowing themselves to get caught in a short-squeeze frenzy that recouped nearly all of the exhilarating, 25-point plunge that had begun the day. When stocks where hitting their lows in pre-dawn trading, it was apparent that the poor mugs couldn’t believe their own good fortune. If only they could have kept their cool. Even so, the panic-induced bounce failed to generate much of an impulse leg on the hourly chart (see inset), and that’s why the 2309.50 downside target sent out Sunday night remains intact, at least in theory. The futures would become a ‘mechanical’ short if they hit the green line Monday night or Tuesday; however, because the opening will always be unpredictable, I’m not recommending the trade unless it’s initiated via either of two risk-averse entry tactics we use: ‘camouflage’ or ‘counterintuitive’. Stay tuned to the chat room for guidance, since at any given time, there are quite a few Hidden Pivot experts who will know just what to do.
