You can feel the ponderous weight of supply in the daily chart (see inset). Although the pattern lacks the symmetry of a textbook head-and-shoulders formation, there are enough similarities to infer that bulls are headed for a fall. Friday’s nasty bounce, a short-squeeze assisted by an army of by-the-dip dipsticks, left bears bleeding on the ropes. But because they are still breathing, expect a buoyant opening Sunday followed by a mild upward drift. DaBoyz will extract as much mileage from this non-bullish buying to reach the green line, where a conventional ‘buy’ signal would trigger. It’s hardly a stretch to think the squeeze could continue to p=6812.50, and so we shouldn’t underestimate the ability of DaBoyz to do whatever it takes to make that happen. If they should succeed at the unthinkable and achieve new record highs, we will want to get short up there aggressively. _______ UPDATE (Nov 17, 10:08 p.m.): See my ES posts in the chat room today if you want a road map. The updates got everything just about right from bell to bell. I will be in there again on Tuesday, calling the turns and convinced that the Mother of All Bears has finally arrived. Before November is over, the 500-point drops in the Dow we’ve seen lately will turn out to have been just a gentle warm-up. Outside of the Bitcoin crowd, investors are not quite ready to hit the panic button, so confident are they that the buy-the-dips bozos will step in at any moment. They just might, but we’ll want to fade their action with increasing aggressiveness the higher they take this brick. _______ UPDATE (Nov 18, 11:18 p.m): The futures tripped a minor ‘mechanical’ buy signal at 6626.75 that is predicated on a 6725.00 target. Short there only if you’ve made some bucks on the way up, or if you know how to fashion a ‘camouflage’ set-up that would limit theoretical risk to no more than $200 per contract. Please refer to my post in the chat room today at 14:23 for a detailed example of how to do this. _______ UPDATE (Nov 19, 9:40 p.m.): DaBoyz will have to milk this bear squeeze for all it’s worth, since it’ll be another three months before Nvidia reports again. I have the E-mini S&Ps, currently trading for 6741.50, as a 90% certainty to reach a minimum 6839.00. Short there via a ‘camo’ set-up or with a tight stop if you’ve made money on the way up.
ESZ25 – December E-Mini S&P (Last:6741.50)
