The chart shown provides a more expansive view than the one given here Friday, with a 1384.10 rally target that is commensurately higher. Getting there would represent the culmination of a bullish ABCD pattern that has unfolded at a glacial pace. However, any doubts we might have had about the pattern’s viability were scotched on March 10 when a sharp rally stalled precisely at the midpoint pivot,1287.80. As of now, we have no way of knowing for certain whether the April contract will get past that ‘hidden’ resistance. However, if and when it does, especially if by way of a two-day close above it, or by exceeding it by $5-6 intraday, that would imply a likely follow-through to at least 1335.95, or possibly to 1384.10 if any higher.
From a trading perspective, the futures became a theoretical ‘mechanical’ buy, stop 1191.40, on two separate occasions when they pulled back to the green line (x=1239.65). They are on a buy signal now, but because they’re trading above the ‘mechanical’ entry price, I’d suggest using another tactic to get aboard. If a ‘camouflage’ entry is your preference, please note that the futures would trip a buy signal on the chart shown at 1259.63 – four ticks above Friday’s recovery high. The relevant coordinates are: A=1227.00 on 3/16; B=1271.90 on 3/17; and (tentative) C=1248.40 (3/19). The D target would lie at 1293.30.
This post was published at Rick Ackerman on Posted March 20, 2016,.