ESU17 – Sep E-Mini S&P (Last:2441.75)

The very bullish pattern shown yields a rally target at 2512.00 that would equate to a Dow move to around 22092.  I can’t guarantee that the September E-Mini contract will get there, but after Tuesday’s binge a run-up to at least 2457.25, the midpoint Hidden Pivot, looks like a very good bet. Permabear that I am, I prefer to think of a rally to the red line as potentially setting up a very nasty bull trap — and bear trap as well. Bulls lifted to new record highs would relax, confident in a market that seems too strong to pose any immediate threat. For their part, bears would be panicking to cover shorts or face ruination. The intensity of their buying could easily push the futures well past 2457, presumably with enough force to reach 2512, where a trap would become even deadlier and more precipitous. At blowoff speed, I estimate it would take perhaps 4-7 days to reach the higher number, but only a day or two to reach the lower.  We’ll be ready to short the latter on Thursday, but with a tight stop loss and a very open mind about what could happen next. The rally certainly seems unstoppable. Of course, at major tops the rally always does.