The March contract has opened 40 points lower tonight, suggesting the pros are confident they can re-energize Friday’s short squeeze once the suckers who dumped market orders on the first bars are out of the way. Before this quasi-criminal operation gets under way in earnest, however, expect a retest below the 2889.25 opening bar. The 2884.00 downside target we used on Friday served us well, with many subscribers reporting big gains on the bounce, especially the initial one. For better or worse, this week will begin without the adamantine clarity of 2884.00.
On Friday, sellers bashed that Hidden Pivot support four times, exceeding it by more than a few points only once. It took four days to get there, so we shouldn’t be surprised if the pivot provides support for at least another day or two — or perhaps even longer, since we can’t rule out the possibility the low will prove to be an important one. I seriously doubt THE low is in, however, since grave uncertainties surrounding the pandemic and its effects on the global economy will remain for the foreseeable future. Even so, we should be careful not to underestimate the power and longevity of short-squeeze rallies, since they are explicitly engineered to fool cocky shorts who reaped big gains on the way down into getting short again, this time to crush them good. _______ UPDATE (Mar 2, 10:16 p.m. EST): None of today’s three big rally legs exceeded an external peak (see it here), so in that respect the biggest single-day point gain in history was, well…unimpressive. That doesn’t mean I’m going to try to intercept the stampede with short offers every inch of the way to Kingdom Come. But when the futures plummet to new lows at some point, remember this tout. For now, I’ll wait until bulls tackle last Thursday’s dual peaks slightly above before I hazard any new targets for today. When things move this violently, it’s easier than you might imagine not only to nail the swings, but to trade them profitably.