Two potential trades loom for the week: a ‘mechanical’ buy at p=282.74 that would require a stop-loss at 275.64; and a short initiated at the 304.07 target. The A-B impulse leg of the pattern is ersatz, since it failed to exceed the record high peak at 295.87 recorded just before stocks collapsed. But because it’s all we’ve got, we can try to make the most of it. Even fake patterns yield Hidden Pivot targets and levels that are usable even if sometimes imprecise. My hunch is that the rally target will be achieved because Monday’s bullish ‘vaccine’ gap was so powerful. If the lower is not, however, it would be because bulls are more eager to jump in today than to let stocks fall to relative bargain levels.
DIA – Dow Industrials ETF (Last:295.15)