Traders thumbed their noses at G7 on Monday, pushing stocks higher even as G7 headlines made the threat of a global trade war seem palpable. Their indifference was so blatant that I am taking a contrarian view looking looking out 3-5 days. Specifically, the September contract would trip a ‘counterintuitive’ short if it falls to 2730.00, the green line. (Note: the trigger could migrate upward if the futures rally from here.) The signal would be especially enticing if this were to occur by Thursday or sooner. Because the trade would risk more than $3000 per contract initially, you should be thinking of an alternative entry tactic if the opportunity arises — meaning either a ‘mechanical’ short or a ‘camouflage’ trade. Ask in the chat room at the appropriate time if you are uncertain about how to do this. ______ UPDATE (June 13, 4:21 p.m.): The week’s price action thus far has slightly raised the short trigger to 2731.75. If you’re game to try using camouflage to get short way ahead of the signal, I’d suggest using a camouflage set-up on the 5-minute chart or less, since the end-of-day selloff generated a robustly bearish impulse leg on the intraday charts. ________ UPDATE (June 14, 10:32 a.m.): With the futures in vertical mode this morning, there have been no set-ups for initiating a camouflage short of any consequence.The trade recommended above will remain viable, subject to possible adjustment if a somewhat higher high is recorded.
_______ UPDATE (June 14, 9:21 p.m.): Traders spent most of the day giving back half of the modest gains short-covering had gifted them with in the first hour. The move was bullishly impulsive on the intraday charts nonetheless, so by all means greet the day with a smile in your heart. If the futures move lower early in the session, look for a reversal from exactly 2775.50, a compelling midpoint Hidden Pivot (30-minute, a=2796.00 on 6/13).
