With a global recession looming, it’s tempting to view every selloff as the start of The Big One. And yet, the bullish implication of the sharp upthrust through p ten days ago is undiminished by the mild weakness that ended the week. The futures are still a good bet to reach the 3069.25 target shown, an observation we should keep in mind no matter what the news. Earnings season has been less-than-stellar so far, although the delayed reaction of certain stocks to bad news — notably NFLX, BA and JNJ — has been more than a little disconcerting. This dynamic demonstrates that price fluctuations have less to do with the news than with cyclical mood swings of a mysterious nature. For now, we’ll give the December contract wide berth. A pullback to the red line (2962) would trip a weak, theoretical ‘mechanical’ buy signal, stop 2926.25, but I’d prefer waiting for a better opportunity, even if it fails to materialize, at x=2908.50. ______ UPDATE (Oct 21, 7:04 p.m. EDT): We’ll put the 3069 rally target out of mind for a moment in order to short the fetching rABC pattern shown. I’d prefer to do so off a marginally higher point ‘C’, but if the futures fall to the green line without having exceeded it, the trade will still be a go. Since initial risk is about $1000 per contract, you should consider using the micro-contract if that’s too rich. _______ UPDATE (Oct 22, 10:23 p.m.): The short triggered at around 4:00 p.m. and was showing a profit of about $650 per contract at tonight’s so-far low, 2982.00. Use a stop-loss at 2994.75, and make it o-c-o with an order to cover the position at 2976.00. You can keep half at your discretion if you feel up to working the order, but please let me know in the chat room so that I can provide further guidance. _______ UPDATE (6:42 a.m.): The trade was stopped out around 4 a.m. for no loss or gain. Strictly speaking, the stop-loss should have been at 3014.50, just above ‘C’, and you might want to track it from that standpoint to better understand the rABC entry method. I lowered the stop because I was uncertain how many subscribers did the trade and did not want any ‘newbies’ to suffer a loss on their first try. _______ UPDATE (Oct 23, 10:15 p.m.): With the futures inches shy of a breakout, I’m not going to pretend I have a crystal ball. Regardless, it will always be possible to get this gas-bag’s number just by paying attention to impulse legs on the lesser charts. That’s what I’ll suggest if you trade it (as “Richie” has been doing, with apparent success, in the Trading Room). _______ UPDATE (Oct 24, 6:24 p.m.): Some decent signals to get short up here have produced only small gains at best, implying the futures are hot to move higher. A Hidden Pivot at 3021.25 (15-min, A=2975 on 10/18) would be my minimum upside objective, or 3029.25 (A=2953.75 on 10/14) if any higher. If the futures go nowhere, or even if they climb moderately, I’d be tempted to buy a few puts to take home over the weekend. It’s just a hunch, based on how much difficulty I’m having imagining this algorithm-powered fart bag selling off for more than a few hours. Risk no more than you would on a scratch-off lottery ticket.
ESZ19 – December E-Mini S&P (Last:3002.25)