Sellers were subtly unimpressive last week, implying bears could find themselves running for cover when the new week begins. Notice in the chart how three successive down-legs on Thursday and Friday failed to exceed ‘external’ lows to the left of them. The shortfall in each case was only a tick or two, but that was enough to categorize the legs as corrective rather than impulsive. This suggests that bears were lacking in confidence, even though tech stocks were getting hammered brutally at the time. If index futures open higher Monday evening, we should focus on the 268.40 ‘external’ peak shown in the chart, since an easy move past it, especially early in the session, would suggest buyers mean business. However, even if the Mini-Dow were to open lower, a midpoint Hidden Pivot support at 27,889 would be an opportune place to try bottom-fishing with a tight stop-loss. Here’s the chart. _______ UPDATE (Sep 9, 9:10 p.m.): DIA not only gapped through the green line on the opening, it also crushed a midpoint Hidden Pivot support at 276.21. This implies more downside over the near term to at least p2=272.37, or to =268.53 if any lower. Here’s the chart. _______ UPDATE (Sep 9, 11:33 p.m.): This morning’s gap-up short squeeze began with promising viciousness but ultimately died well shy of the imposing ‘external’ peak recorded last Friday at 283.88 on the way down. The burden of proof will be on bulls when the day begins. _______ UPDATE (Sep 10, 10:18 p.m.): Look for DIA to continue down to at least 271.71 as the week ends. An overshoot of more than 0.50 points would give bears a head start next week. Here’s the chart.
DIA – Dow Industrials ETF (Last:275.80)