Inches From Yet Another Bear Panic
Short-covering on Thursday shredded a clear Hidden Pivot resistance at 2162.25, implying higher prices are likely. Bulls will face a daunting challenge, however, in the form of supply that stretches back to early August. Most buyers since then would have gotten aboard at or near record highs and weathered the one-day plunge that occurred on September 9; many of them will be understandably eager to get out ‘even’. That’s why there will be plenty of stock offered for sale as the week draws to a close. However, bears alarmed by the persistence and ferocity of the rally since the v-shaped low two weeks ago are probably even more eager to cover short positions, and that’s I expect the old record highs to be surpassed.
If this is in fact how things unfold on Friday, there should be discernible resistance nevertheless at the 2182.94 ‘secondary’ pivot shown in the chart as a pink line. However, a close above it for two consecutive bars, or a decisive move past it intraday, would put the futures on course for a romp next week to the 2210.50 target, or to 2226.50 if any higher. Either of those two Hidden Pivots would make for an appealing place to try shorting ahead of a possible Mother of All Tops. We’ve made money being wrong on this bet many times in the past, and caught some exhilarating but short-lived downdrafts. Ask traders about this in the chat room if you are skeptical. In the meantime, there is potentially as much as 60 points of upside to get long, presumably using ‘mechanical’ bids and/or camouflage entry tactics at p or p2 — respectively, the red and pink lines. Visit our 24/7 chat room and share timely ideas and real-time results with great traders from around the world.
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