We began Friday looking for a tradeable top at the 2502.25 target shown. The futures rose no higher than 2500.00, so we went into the weekend with no position. On Monday, assuming this vehicle hasn’t traded above the target before the opening bell, you can offer a single contract short at 2502.25 with as tight a stop-loss as you can abide. (Officially, it will be at 2503.75.) The target is sufficiently clear and compelling that if it is easily exceeded, we would ordinarily infer that a bigger ABC pattern with a commensurately higher target is in play. However, the 2502.25 resistance is not exactly little stuff, since the pattern with which it is associated has been developing for fully three weeks. We will be obliged to use the pattern shown if 2502.25 gives way easily. It implies minimum upside thereupon to p2=2524.50, or to 2561.25 (!) if any higher. _______ UPDATE (Sep 18, 9:15 a.m. EDT): With the opening 15 minutes away, the futures have been as high as 2504.50, so the trade is off. Expect them to head now toward the 2524.50 ‘secondary’ pivot noted above, implying your bias should be bullish between here and there. It would take a fall Tuesday exceeding 2494.00 to hint of trouble. _______ UPDATE (Sep 19, 6:12 p.m. EDT): No change in the analysis given above. A Fed Open Market Committee announcement is due out Wednesday, so expect the markets to remain comatose until the momentous news comes at 2:00 p.m. We already know what the Fed is going to say, and we already know the markets will go nuts for 10-20 minutes no matter what. Enough said.
