For the second time in a week the Dow has bounced sharply from the 23,806 midpoint Hidden Pivot support shown. How far will the rally go? That’s impossible to predict, nor do we pretend to have a crystal ball. However, the fact that both reversals occurred almost exactly at the pivot makes one conceivable sequence of events very predictable, as follows: If the Dow should decisively breach the pivot intraday (meaning by at least 40-50 points), or if it should close for two consecutive days beneath the pivot, that would imply more downside to exactly 22,754. Alternatively, and for all we know, the uptrend begun off today’s 23,808 low could be the start of a move to new record highs over the next several months. We will probably not have to wait long for Mr. Market to tip his hand, since the strength or perhaps weakness of the uptrend cannot but reveal itself on the intraday charts over the next few days. Yes, it will still be a guessing game; but our guesses will be sufficiently ‘educated’ that we are unlikely to lose money acting on poorly informed hunches._______ UPDATE (May 3, 5:20 p.m.): Today’s 400-point reversal somehow failed to impress. In any event, it would take a print exceeding the 24,977 ‘external’ peak recorded on March 21 for bulls to demonstrate they are serious. I should mention a 22,544 target that is equivalent to my new target for the E-Mini S&s. It uses the ‘marquee’ high at 26,616 as a point ‘A’ rather than the one-off ‘A’ at 26,338. _______ UPDATE (May 7, 8:20 p.m.): A modest rally by Wednesday afternoon exceeding 24580 would generate a promising impulse leg on the daily chart. Here’s the picture. ________ UPDATE (May 9, 8:59 p.m.): The Dow slightly exceeded our 24,850 benchmark, but by enough to refresh the bullish impulsiveness of the daily chart. Use the subtle impulse leg shown to generate a ‘buy’ signal. It will work particularly well if the still-undetermined point ‘B’ high is close to the one shown at 24,586._______ UPDATE (May 10, 8:23 p.m.): The rally was too strong and unsubtle to produce a good camouflage entry set-up. Now, if buyers can push the Indoos above the 24,977 peak recorded on March 21, they’ll have bears badly on the run ahead of Monday’s opening. UPDATE (May 14, 11:21 p.m.): Buyers were able to refresh the bullish impulse leg by taking out the March 21 peak. On the hourly the P 24,989.89 was tagged on this clear pattern. UPDATE (May 15, 11:33 p.m.): Today’s gap down doesn’t change the underlying strength of the market. Mr. Market is looking to burn more time while it consolidates for the next move.
