Friday’s short-squeeze tripped a ‘weak’ mechanical short at p=3275.50, stop 3323.50, but there was no compelling reason to get short ahead of the weekend. Another short of comparable risk would be signaled if the bounce continues to the green line, x=3347.50. This is a so-so opportunity because the A-B impulse leg created between 9/3 and 9/9 was not especially strong. In practice, we can do the trade anyway, but using an rABC set-up on a chart of lesser degree to trigger an entry. As it stands, the theoretical risk using a full-level stop-loss is about $2500 per contract. The goal is D=3131.50, and it still looks like no worse than an even shot to be achieved. However, all bets are off if the futures take a lunatic leap exceeding 3363.00 Sunday night or Monday. That’s equal to an ‘external’ peak recorded 9/18 on the way down. ______ UPDATE (Sep 29, 4:24 p.m.): Ha-ha. The little wiseguy popped to 3363.00 exactly, implying that a ‘mechanical’ short at the green line was still not a bad bet to hit 3131.50. We’ll shun the E-mini’s rattlesnake charm for now while retaining a mildly bearish bias. Alternatively, a move above 3363.00 and bears would be toast. _______ UPDATE (Sep 30, 6:07): Looks like bears are toast, although the 45-point pullback from an intraday peak at 3384.00 well above our toast threshold suggests there are too many bulls to make this hoax waft higher without occasional labor-intensive inputs. The best bears can hope for is for the futures to merely flail around before the next short squeeze. ______ UPDATE (Oct 1, 6:13 p.m.): There are still too many bulls, and they wheezed all day, failing to improve much on the short-squeeze rally they’d been gifted with overnight. That’s why my bias for Friday will be bearish as I look for a rally to sell into.
ESZ20 – December E-Mini S&P (Last:3366.25)