Papa Bear Has Finally Come Out Of Hiding

November 3, 2016

On Tuesday, the E-Mini S&Ps finally fell to a moderately bearish Hidden Pivot target that had been more than two months in coming. The fact that Wednesday’s bounce from this Hidden Pivot support was weak and lasted for less than a day strongly suggests that the selling is the start of something more powerful. We’ll know soon enough, since, from our technical perspective, the hallmark of a bear market is down trending ABCD patterns that consistently exceed their ‘D’ targets.

Conversely, we should also start to see abcd corrective rallies that fail to achieve their ‘d’ targets. This dynamic should be evident in all time frames, even in patterns that play out in either direction on the lowly 1-minute bar chart. Most immediately, we might look for this in the bearish pattern displayed at the rightmost edge of the chart. It has already been confirmed by the so far slight bounce precisely from the midpoint pivot at 2087.25.  Any further slippage should be expected to hit D=2068.00, and to provide a potentially tradable bounce from within a tick or two of that number. Bottom-fish there with a stop-loss as tight as three ticks, but only if you’ve been profitably short for at least part of the ride south.

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Dollar falls on uncertainty but ends week with modest gain