Today’s refreshing plunge didn’t negate the bullish target we were using, but it did make a more compelling case for the bearish pattern shown (see inset), with a 3830.75 target. The early morning high recorded ahead of Tuesday’s unsettling inflation news didn’t quite reach the green line (4196.25), which would have set up a juicy ‘mechanical’ trade — a short in this case. However the futures make their way down to 3830.75, we should expect them to be as tricky to short as Tuesday’s sudden reversal into a headline-induced air pocket. Bottom-fishing will be easier, presumably with a bid utilizing the somewhat obscure D target tied to our reverse pattern. Be alert for a possible turn from 3868.75, a discomfort-zone ‘voodoo’ number.
ESZ22 – Dec E-Mini S&Ps (Last:3961.00)