Because the steep selloff that ended the week was driven by news from Kiev, we should view it as corrective. I’ve implied as much in the current Morning Line commentary, which notes that no one ever went broke buying stocks as they plummeted on some distressing headline. Friday’s dive terminated precisely at the ‘D’ target of the small pattern shown in the chart, but still lower prices seem likely before the ‘rumor’ of a Ukraine invasion is actualized by Russian tanks and troops. We should therefore focus on p=4323.25 of the larger, bearish pattern, since that is where the futures are most likely to head on Monday. Bottom-fish there in the usual ways, but let’s remain open-minded to the possibility the midpoint support will give way. Depending on how badly, this could portend a test of January 24’s bombed-out low at 4212.75. _______ UPDATE (Feb 14, 5:15): Candy-ass bears evidently were so unnerved today by rumors that Putin might be willing to negotiate that they failed to follow through on Friday’s promising selloff. Add in the divergent, ‘green’ finish of AAPL and Bertie (bitcoin), and it is hard to imagine stocks going anywhere but sideways-to-higher this week. _______ UPDATE (Feb 15, 10:47 p.m.): DaSleazeballs are still in charge, and they mean to take this hoax higher whether there are buyers or not. All of yesterday’s gains occurred on zero volume around 4:00 a.m. What more do you need to know? _______ UPDATE (Feb 17, 10:35 a.m.): See my recent Trading Room posts for an actionable idea that I aired yesterday and slightly revised a moment ago. _______ UPDATE (Feb 17, 5:55 p.m.): Barring a bounce from p2=4359.63, the futures appear headed down to the 4318.00 target of this pattern. Any profits booked on the way down should be applied to bottom-fishing there with the tightest stop you can abide. The precise bounce from p=4401.25 on initial contact suggests an equally precise bounce from D=4318.00 is coming, assuming the futures get there.
ESH22 – March E-Mini S&P (Last:4374.75)
