The pattern shown is sufficiently gnarly and idiosyncratic that it is unlikely to be on the radar of those we trade against. That makes me confident it will work well in the important ways: 1) offering tradeable resistance at p, p2 and D; 2) revealing trend strength clearly enough to embolden us if an opportunity arises , and 3) allowing confident ‘mechanical’ entries if pullbacks set them up properly. For now, we’ll use p=4446.75 as a minimum upside objective, subject to an always-possible Sunday night surprise. I am not quite as fearful of Lockdown 2.0 as I was earlier, but it’s still hard to handicap the likely extent of it. When last week ended, however, it looked as though the portfolio chimps had decided not to let delta interfere with their livelihood. _______ UPDATE (Aug 11, 8:38 p.m.): We spent much of today’s tutorial hour psychoanalyzing the nervous interaction between the rally and bears as it approached the 4446.75 target. For reasons I won’t go into, we settled on the 4451.75 target of a lesser pattern as a place to plant an rABC for purposes of getting short. If you thoroughly understand the tactic, use a=4437.00 (8/10, 1:00 p.m. ET) to fashion an entry trigger. _____ UPDATE (Aug 12, 9:04 p.m.): The short trade triggered, but it took nearly five hours and some stressful feints toward the stop-loss to produce a $600 gain. That took discernment and guts on the part of a subscriber who reported cashing a winner, since I’d altered the rABC set-up as the futures made their way higher, eventually exceeding the target by a relatively whopping 4.50 points. That and the relatively shallow pullback imply shorts are in for more abuse as the week ends. Here’s a chart that captures ES hitting pay dirt with a dip to the red line at 8:15 p.m.
ESU21 – Sep E-Mini S&P (Last:4452.50)