The E-Mini S&Ps recouped the previous week’s losses so quickly that it’s hard to imagine they are not bound for new record highs. Uptrends must be nearly unstoppable for a ‘mechanical’ buy at the red line (p=5518) to work, but this time it did. The stop-loss would have been at 5402, but the retracement never went lower than 5451 — room to spare. That said, the daily chart is not without menace. For one, a move to the 5868.50 target would max out the pattern’s potential at the very moment every trader and investor on the planet was turning wildly bullish, including short-covering bears. For two, there’s a voodoo number at 5757 with just as much potential to trap the herd below the old high. What a fooler that would be! Shorts attempted from the lower number should use a very tight trigger interval (TI) of five points or less. This implies crafting an entry set-up with a reverse pattern taken from the 15-minute chart or less. If you don’t know what I’m talking about, stick with easier trades like the one in QQQ calls last Wednesday. A simple, limit bid of 0.44 for same-day calls produced a 2900% gain in just a few hours. The calls went to 12.86 as the Cubes commenced a vertical rally that was still going when the closing bell rang on Friday. Who’da thunk a lowly call option knew exactly when stocks were going to turn? It was able to call the turn simply because all the eyeballs were focused on the underlying S&P futures, which is guaranteed t bamboozle.
ESZ24 – Dec E-Mini S&Ps (Last:5691.00)
