The gnarly ABC pattern shown implies a strong bull leg ahead to as high as 3206.25. It would be equivalent to a 600-point rally in the Dow. The point ‘A’ low is pretty weak to match up with last week’s nasty B-C correction, but it’s all we’ve got. Considering the alternatives, it is certainly good enough for government work. It’s also good enough for us to take seriously the 3137.88 midpoint Hidden Pivot resistance. Judging from the way buyers impaled it on Friday, the uptrend has at least two or three more days to go. That would be well in line with a blowoff to D=3206.25 and potentially congruent with a drop in VXX to a longstanding target at 15.66. Don’t hesitate to buy some close-in calls pegged to a strike of 17 or higher if that happens. _______ UPDATE (Dec 9, 9:15 p.m.): Most of today’s price action took place above p=3137.88 (see tout). That not only shortens the odds of a move to D=3206.25, it also makes a pullback to X=3103.69 an enticing ‘mechanical’ buy. The 3069.25 stop-loss implies $1700 of theoretical entry risk per contract, but there are alternative entry strategies in the Hidden Pivot arsenal that could cut that by as much as 90%. Stay tuned to the trading room for real-time tips. ______ UPDATE (Dec 12, 9:05 p.m.): Nothing has changed, but a dip below 3106.75 would darken the outlook in proportion to the size of the breach. FYI, 3106.75 is a midpoint pivot, on the hourly chart, tied to A= 3158.00 on 12/2. _______ UPDATE (Dec 11, 10:41 p.m.): The futures are taking their sweet old time, but that has not changed the bullish outlook for the near term. Even so, I am no longer recommending a ‘mechanical’ buy at 3103. _______ UPDATE (Dec 12, 11:20 p.m.): Buyers have resumed their wilding spree Thursday night. A ‘hopeful’ tweet from the Trumpster? Who cares. Whatever the catalyst, we’ve known all along exactly where the futures are headed. Nor should we be surprised if they are sitting at exactly 3206.25 on the closing bell. If so, don’t be afraid to take home a token short position over the weekend.
ESZ19 – December E-Mini S&P (Last:3180.00)