The futures spent the entire week head-butting a 3938.25 target that has been in play since early November. Ordinarily we might infer that a major top is in the works. But these are not ordinary times, and a practically inexhaustible supply of credit dollars has given the trend an aura of invincibility. My hunch is that an unexpectedly strong dollar and high borrowing rates will snuff the good times, but even then it will take time to sap the manic energy behind the rallies. Let’s see what another week brings. In any event, the futures would need to fall all the way to 3652, or about 6%, to generate a bearish impulse leg on the daily chart. _______ UPDATE (Feb 24, 7:14 p.m. EST): Bears are caught in a short squeeze that is the first in a month, although it has yet to turn savage. That will likely happen by week’s end if it happens at all, and it will be announced by a decisive push through the 3925 midpoint Hidden Pivot shown in this chart. At that point the futures should be presumed headed toward the 4046 target, although I cannot yet say for sure whether it will be reached or, alternatively, if the trend will fail at p2=3986. _______ UPDATE (Feb 25, 6:04 p.m.): Wednesday night’s sharp reversal left barely intact a mechanical buy I’d suggested paper-trading. However, the more interesting fact is that the trade was an instant loser even though the set-up was textbook attractive. This suggests sellers are getting antsy, even if no one has hit the panic button yet. Perhaps this is a bout to occur ahead of Friday’s closing bell?
ESH21 – March E-Mini S&Ps (Last:3827.00)
