Index futures were continuing to sell off Tuesday night after having peaked intraday at levels where we’d anticipated a top of possible importance. Specifically, I’d flagged two rally targets that lay, respectively, at 2486.75 and 2489.50. Together, these Hidden Pivot resistance points stopped a strong rally in the first half of the session at 2488.50, then sent the futures into a dive that has reached 2461.50 so far this evening.
Although Rick’s Picks subscribers were able to take partial profits on short positions initiated at or very near the top, I would caution bears about celebrating prematurely. My concern is that the shares of two supremely important stock-market bellwethers, Amazon (see chart inset) and Boeing, were hanging tough Tuesday night after having barely sold off during the day.
This divergence will not necessarily settle in bulls’ favor, but it may take a day or two before we can predict confidently who will win. Regardless, from a Hidden Pivot perspective something important has changed in the way stocks are acting. Instead of hitting or slightly exceeding bullish targets and pulling back lazily for a short while, stocks are reaching their targets exactly and then getting smacked down hard. The inescapable conclusion is that buyers are feeling less feisty these days — for whatever reason.