T
he Cubes have rolled down from within an inch of a 331.87 Hidden Pivot target that has been in play theoretically since early October. It kept us on the right side of what may prove to be the last gasp of the bull mania begun in March. It also allowed us to acquire put options with great timing. Whichever puts you hold, including butterfly spreads that I’d suggested, you should cash out half your position if and when its value doubles. If the fledgling downtrend gets legs, we can roll positions as warranted.
The multitude of possible point ‘A’ lows in the chart argues against certitude that the bull market top is in. However, the prospect in somewhat corroborated by the recent top in the E-Mini Nasdaq. I’d been drum-rolling a potential top at exactly 13,555 for quite a while, and this pivot came within 50 cents (three thousandths of one percent) of nailing the sharply etched top recorded last Monday. After diving hard for a day, the futures subsequently head-faked to 13,600 before taking an even bigger plunge. However, there can be little doubt that bulls were feeling the weight of the Hidden Pivot. Here’s the chart, and although the point ‘A’ low is not as distinctive as I’d prefer, it has the advantage of being the only visible choice. FYI, the lesser downtrend begun last Wednesday projects, with so-so clarity, to 12712. No clear equivalent is evident for QQQ. _______ UPDATE (Feb 1, 9:08 p.m. EST): Su-prize su-prize. The futures have rallied sharply from a low at 12727 that missed my correction target by a tenth of one percent. Now, if it pushes above the record 13,599 achieved last week, that will be no reason to let down our guard. _______ UPDATE (Feb 2, 5:52 p.m.): Bears are badly trapped, making this squeeze all but certain to blow away last week’s record highs. What then? We’ll take it one day at a time, but I am no longer suggesting that short positions using options be rolled forward. _____ UPDATE (Feb 2, 5:57 p.m.): I’ve selected a lower point ‘A’ that has raised our rally target somewhat, to 339.67. The rally looks gung-ho to take out the old high.