The steep, presumably gratuitous dive in the final hour of Wednesday’s session would set up a ‘mechanical’ buy if it continues down to the green line at 2898 (see inset). A stop-loss just beneath 2869.50, the point ‘C’ low of the pattern, would obtain. We have not seen many set-ups like this in the E-Mini S&Ps lately because the bull market has been too powerful to allow such nasty swoons as well-wrought mechanical trades require. We should therefore be more cautious than usual in intercepting the downtrend. In practice this will entail converting any mechanical buy signal into a camouflage one. If the futures get near the green line, tune to the chat room for guidance on this._______ UPDATE (Sep 27, 10:58 p.m. EDT): Use the pattern shown in this chart to guide you over the next several days. It implies that a decisive push above the red line would make further upside to the 2971.00 target a good bet. If a subsequent pullback comes down to the green line, you can buy there ‘mechanically’ with a 2096.00 stop-loss.
