Despite the wack-o rally in the final hour, I have lowered my minimum downside target by 19 points, to 2789.50 (see inset). A Fed announcement that added nothing to our store of knowledge about future rate hikes caused shares to gyrate wildly in the final two hours of the session. It was the usual sturm und drang, signifying nothing in particular. From a technical standpoint, the futures became a ‘mechanical’ short when they rallied to the green line (2827.03). I’d suggest paper-trading such signals until you become thoroughly familiar with various entry tactics possible using the Hidden Pivot Method. _______ UPDATE (Feb 1, 5:27 p.m. EST): Despite a wild couple of days that included two 25-point rallies, I still expect the futures to fall at least 2789.50 before they can set up for a push to new record highs. That said, it is all but impossible to stay short to the target if you intend on keeping risk:reward in a healthy relationship.
