A seemingly small trend failure in the E-Mini S&Ps has bearish implications for the stock market as a whole. Thursday’s pump-and-dump short-squeeze in the dead of night missed achieving a 2973.25 rally target I’d drum-rolled by eight points. That was no big deal, but a corresponding failure to take out the 2975.00 peak at the left-most edge of the chart (inset) is troubling. That’s because, under the rules of the Hidden Pivot Method, healthy rallies must exceed at least one prior peak with each new up-leg in order to renew their energy. That’s not what happened here, as you can see. The stubborn peak was tiny, but because of the way it was formed, it has the same weight as any of the larger sub-peaks in the chart. Small failures like this one should not be ignored, and that is why I am cautioning against taking a long position over the weekend if the futures entice with a rally that has not exceeded the 2965.00 recovery high. Regardless, let the buyer beware!
ESM20 – June E-Mini S&Ps (Last:2883.00)