Spartacus’ post in the chat room Saturday morning concerned his perception that sellers have not shown much follow-through whenever they appeared to have bulls on the run. The monthly chart shown in the thumbnail inset would appear to corroborate his observation, although not decisively. Although two consecutive bars have penetrated an obvious midpoint Hidden Pivot support, bears failed to close either bar beneath the red line. The futures remain on a ‘mechanical’-short signal nonetheless, but pessimists will likely have grown impatient by now with the so-far non-result. In a smaller time frame, traders might have gotten long at the redline, and they, too, would be at least somewhat depleted by the failure of the March contract to achieve a new record high. The jury is still out, then, but I would expect a drop to d=5555.00 after we’ve seen a monthly close beneath p=5866.88, if we do. I would also be an aggressive buyer at that price, if only to leverage a fleeting, corrective bounce. More immediately, despite Friday’s vicious short-squeeze in the final hour, the futures remain on a mechanical’-short signal from 5969.25, stop 6024.00. _______ UPDATE (Feb 4, 11:41 a.m. EST): How refreshing! The buy-the-dips bozos are finally getting their comeuppance. Today’s avalanche crushed p=5866.88 (see above) so badly that it won’t take a monthly close beneath it to ensure that d=5555.00 is achieved. More immediately, the futures will have an opportunity to turn up from 5710.94, the pattern’s ‘secondary’ Hidden Pivot support. We’ll make that our minimum downside target for the near term. Here’s the chart.
ESH25 – March E-Mini S&Ps (Last:5763)
