The Indoos surged on Friday to within a millimeter of a 22907 rally target we’ve been using for more than a month. Although it kept us confidently on the right side of the trend, there are no guarantees that this middling Hidden Pivot resistance will stop a relentless bull market whose trajectory continues to steepen. If you took a short position at the target as I’d suggested, perhaps using DIA puts, I would suggest tying them to a tight stop-loss. Check the chat room before Monday’s opening for real-time guidance, since it may be possible to refine our strategy based on what index futures have done overnight. A slightly weak opening would indicate that DaBoyz are eager to buy ’em before they run stocks up shorts’ old wazoo. A somewhat higher opening could indicate a bull trap, and that would be the scenario best suited to holding onto your puts, even if only for an hour or two, until the mood of the day has become clearer. If, as seems likely, shares continue to move blithely higher, you should use the 23,226 target shown in the chart (see inset) as a bull-market price objective. It is quit compelling, especially because of the very precise stall at p=22413. The breakaway bar on Oct 2, when DJIA launched above the pivot, implies there is a very good chance the blue chip average will in fact get to 23226. _______ UPDATE (Oct 19, 5:07 p.m. EDT): Close but no cigar. The Indoos have gotten as high as 23173 this week, 53 points shy of the target. It remains valid in any event and still looks likely to produce a tradable pullback. Click here for an up-to-the-hour chart.
