Last week’s violent histrionics left an engulfing bar on the weekly chart that holds bearish implications for the near term, at least. Expect the futures to fall to the 3792.50 ‘D’ target of the ‘rABC’ pattern shown. Bottom-fishing there with a ‘camouflage’ set-up looks promising, and that’s what I am suggesting. Of course, any rally in the interim would be short-able, albeit with a pattern derived from the lesser intraday charts. Be advised that shorting this sonofabitch with risk nearly eliminated will require very close attention to fifteen-minute bars or less. _____ UPDATE (Sep 19, 8:18 p.m .): I’m planting a tightly staged ‘reverse’ c at 3933.50 to get short with less than two points of risk, but my hunch is that the short squeeze driving ES on the close will either negate the trade or stop it out. If the rally exceeds the 3963. 50 ‘external’ peak from last Thursday, we’ll need to feign a little more respect for the trend, which is being driven 100% by bears. _______ UPDATE (Sep 21, 7:24 p.m.): This afternoon’s Fed-induced psychosis culminated with a steep plunge to within two ticks (i.e., 0.50 points) of the 3792.00 target billboarded above. The Hidden Pivot support held for two hours and fifteen minutes, but its failure a short while ago is yet one more sign that there is something far more seriously wrong with the stock market than has been reflected by the hard selling since early April. Most immediately, I see more downside to at least 3699.25, a voodoo number where I intend to anchor the ‘c’ low of a tight ‘rABC’ pattern to do some risk-obsessed bottom-fishing. Isn’t it remarkable how we can watch the S&Ps shed hundreds upon hundreds of points without offering any decent opportunities to get short? Only a trader with titanium balls or an imbecile could have held onto a short position during today’s rabid-badger price action. _______ UPDATE (Sep 22, 11:47 p.m.): It’s not just that the little POS won’t do the right thing and plummet to the pavement at D=3703.75. Still worse is that when it finally goes splat, it will occur in such a way or at a time of day when bears who have waited patiently for a payoff are unable to take advantage of the move. Because ES has yet to breach the red line decisively, I cannot guarantee that D=3703.75 will be achieved. However, my gut feeling is that you can use the target as a minimum downside projection for the near term, and also as a place to attempt bottom-fishing with a tightly crafted ‘camo’ set-up.
ESZ22 – Dec E-Mini S&Ps (Last:3766.00)
