The futures topped on Friday a single tick above the 2946.75 Hidden Pivot resistance I’d said looked ‘pretty solid’. I haven’t established a tracking position, however, because no subscribers reported getting short. The target was seven weeks in coming, and that’s why we should expect a significant pullback from it. Moreover, there is a target of even greater degree at 2949.50 (click on inset), implying double stopping power within the narrow range between and inclusive of the two targets. The retracement so far has amounted to 15 points, but we shouldn’t be surprised to see the weakness gain momentum in the days ahead.
We’ll be better able to judge the strength of the downtrend if we start to see minor, uptrending abc corrections fall shy of their ‘d’ targets — or even more ominously, if they fail at their ‘p’ midpoint pivots. Another clue of growing weakness would be downtrends that start to exceed their ‘D’ targets. The closest of these lies at 2926.50, and it is shown here. It will become my minimum downside objective if 2932.13, the midpoint pivot that contained Friday’s selling, is exceeded.
Odds will always be against calling the exact top of a bull market now in its tenth year, but it is nevertheless easy to determine where tops of lesser degree are likely to occur. One of them could turn out to be the elusive Mother of All Tops, and that’s why we bother with them. As you have seen, we can always try to get short at each with risk very tightly controlled. Subscribers used to trading reversals from these high-odds peaks know we don’t need for the stock market to collapse to make money on such bets._______ UPDATE (Sep 24, 10:03 p.m. EDT): The futures fell moderately, kicking and screaming the whole way down. Against this unpersuasive accumulation, the FAANGs rose, demonstrating yet again that there is simply too much OPM urgently seeking opportunity on a given day for all stocks to fall._______ UPDATE (Sep 25, 9;12 p.m.): Zzzzzzz. No change.