Buyers blew past a promising rally target at 2636.50 on Thursday, implying they’re spoiling for more. In fact, the effort exceeded virtually every Hidden Pivot resistance identifiable on the intraday charts, including one at 2642.50 shown in today’s chart (see inset). Although the pullback from the intraday high was sharp, bulls had recovered most of it by early evening, leaving shorts badly on the ropes for Friday. All of this makes a move to new recovery highs seem inevitable — so much so that a trader might well have asked at Thursday’s close, “How can I go wrong taking a long position overnight?” It is when we start thinking this way that a bell should go off warning us to consider the opposite — i.e., a punitive selloff from out-of-the-blue. Bottom line: We’ll be hell-of-bullish at the opening, but ready to unfurl the yellow flag at the first sign of a stall.
