Ordinarily I would infer weakness from the futures’ failure last week to reach the 4645.25 rally target drum-rolled here earlier. In this case, however, I’m inclined to think that enough traders and algos are starting to catch on to ‘our’ reverse patterns that instances as obvious as this one are going to get front-run. Even more compelling for the bullish case is that in this vehicle and our bellwether of bellwethers, AAPL, the selloff has followed an upthrust that exceeded an important prior peak, generating a robust impulse leg on their respective daily charts. We can test this bullish theory as the new week begins using this pattern, a corrective abc that in theory should yield a decent ‘mechanical’ short at x=4534. If bulls are still in charge, look for it to get stopped out within a day or two. _____ UPDATE (Apr 4, 10:01 p.m.): It took only a few hours for the unrecommended trade to get stopped out, so bulls are still in charge. _______ UPDATE (Apr 5, 6:04 p.m.): Bulls turned comatose, activating this minor, bearish pattern, An overshoot of D=4475.75 would imply sellers are not yet done. Also, a rally straightaway to x=4560.50 would trigger a ‘mechanical’ short, subject to the usual ‘camo’ risk controls. ______ UPDATE (Apr 6, 11:25 p.m.): The futures fell to the 4475 target overnight, then spent the entire day diddling it as though nothing were happening in the news. In the end there was no bounce, however, so bears will have the edge when Thursday’s session begins. The pattern shown in this chart should be helpful in nailing the swings on the way down to as low as D=4146.75. And yes, p=4388.88 can be bottom-fished with the tightest ‘camo’ set-up you can construct. If it gets pulped, expect selling to gain momentum.
ESM22 – June E-Mini S&Ps (Last:4462.75)
