Shorts were under intense pressure to cover as the week ended after getting squeezed for two consecutive days without a chance to rest. For all the pain the 148-point rally may have caused bears, it barely registered a blip on the daily chart. No prior peaks were surpassed; moreover, it would require a further upthrust of 326 points to generate an impulse leg on the daily chart. Even so, I’ve given the bull the benefit of the doubt with the most ambitious target (see inset) that can be projected using a ‘reverse pattern’. It lies at 4116.75, although a move to that number cannot be considered a lock-up because p=3877 has been pounded without giving way The pattern itself has been working nicely for trading purposes, having produced two $24,000 ‘mechanical’ winners acquired at the green line. ______ UPDATE (Jul 18, 7:43 p.m. EDT): A dip to x=3758 would trip a third ‘mechanical’ buy, but the odds looked better when two similar trades were triggered earlier this month. Getting short is no piece of cake either, as anyone who has attempted it during the last three sessions will have surmised. _______ UPDATE (Jul 19, 5:30): Frenzied shorts continued to machine-gun themselves in the foot, so perhaps it’s a good time to LOWER our sights lest we get caught up in the madness. Although the 4116.75 target noted above will remain valid, I’ll suggest focusing on a lower Hidden Pivot resistance at 4033.75 derived from this pattern. We’ll want to try shorting there in the usual, risk-averse ways. I’ll also introduce 4256 as a ‘discomfort zone’ objective in case there are still a few bears stupid enough to hang on for dear life above 4116.75. Here, in summary, are the tradeable obstacles above: 4033.75, 4116.75 and 4256. As always, a decisive move past one will imply the next is likely to be reached.
ESU22 – Sep E-Mini S&P (Last:3945.25)
