The rally slightly exceeded my minimum projection of 3500, but not by enough to clinch more upside to the pattern’s secondary pivot (p2) at p2=3651, let alone to D=3802. Bulls have already used up a ‘mechanical’ set-up made possible by a pullback two weeks ago to the green line. The result, although solidly profitable, would have taxed traders with a pullback that nearly stopped out the position and put it briefly in a $12,000 deficit. The ups and downs didn’t negate the target, although they made clear that investors were especially anxious about the election. And so they shall remain, with little relief in prospect if Biden’s victory holds. If the stock market seems stable or even moderately buoyant in the weeks ahead as I expect, we should infer that shares are under deft distribution by smart players. We shall respond accordingly. ______ UPDATE (Nov 9, 8:03 a.m. ET): Overnight, the most powerful rally in history hit the p2 target at 3651.19 (see inset), pulled back 50 points, and now looks eager o go for the next, 3802.25. The targets and trend forecasts work so perfectly that there would be little point in my trying to explain what has happened. You either believe it is rational or you don’t — and even that has no value. _______ UPDATE (Nov 9, 6:08 p.m.): The rally detumesced by half, but not before exceeding the secondary pivot at 3651 by 17 points. That’s enough to shorten the odds of a follow-through to 3802 without quite guaranteeing it. A pullback to the green line at 3349, however unlikely, might seem like the end of the world, but keep in mind that it would trigger a ‘mechanical’ buy, stop 3197. _______ UPDATE (Nov 11, 5:56 p.m.): This minor bullish pattern has delivered two profitable ‘mechanical’ buys so far, and its 3584.50 target can be presumed accurate and reliable — i.e., it can be used to get short if you have made money on the way to it. As always, an easy move through so clear a pivot would imply that the trend is likely to continue. ________ UPDATE (Nov 12, 8:56 p.m.): And now let’s flip to short-term bearish with this pattern and its 3460.50 target The futures were a so-so ‘mechanical’ short on today’s blip to 3548.00.
ESZ20 – December E-Mini S&P (Last:3522.00)