ESH20 – March E-Mini S&P (Last:2963.75)

The tempo of pandemic horror stories quickened over the weekend, implying that bulls and bears who bought into Friday afternoon’s short-covering binge may have set themselves up for a sacking.  We’ll know by the time you read this, but my hunch is the DaBoyz will pull their bids when index futures start to trade late Sunday afternoon, letting shares fall beneath Friday’s lows before stepping in. This will be tricky even for DaSleazeballs, since an onslaught of market orders from those unable to trade off-hours could hit when the regular session opens. The key support to watch is the 2808.25 target of the pattern shown. It is conservative, since we could wind up pushing the point ‘A’ toward the record highs achieved just before the pandemic selloff began globally.  In any event, all rallies, no matter how powerful or intimidating, should be viewed as opportunities to get short. Since many if not most traders are thinking exactly that, the rallies are bound to exceed the limits of the bearish imagination. Remember, the role of the short squeeze is not only to obliterate bears, but to keep bulls in the game — all the way to the bottom.