The futures signaled a weak ‘mechanical’ short on Friday, but it didn’t look appetizing enough to recommend. The selloff in the final half-hour on Tuesday was not a healthy sign, nor was the tedious distribution that took place for most of the day when the broad average were down by about half of the day’s loss. You can use a likely retest of the 2825.00 midpoint pivot as a minimum downside objective. As always, a decisive breach of this benchmark would portend more weakness to the D target — in this case 2705.75. That would be quite a selloff, but we’ll need a less stressful entry point to get with it. _______ UPDATE (Aug 21, 9:40 p.m.) I mentioned in today’s commentary that the stock market would be a juicy short sale somewhere between here and July’s top, so we may as well start looking for it. Here’s a chart that shows a potential ‘counterintuitive’ short from a sweet spot defined by the red lines. This trade is intended for those who understand how to pare entry risk with an rABC pattern.
ESU19 – Sep E-Mini S&P (Last:2932.75)