It Didn’t Take Long for Bulls to Get Too Cocky

by Rick Ackerman

One good rally and everyone’s bullish! How else to explain yesterday’s abortive attempt to do it again? Just as traders came to their desks Monday morning looking for stocks to plummet, on Tuesday they evidently thought the Dow was going to tack on another easy 1000 points. When it did so early in the session, it was easy to think this was the start of another monster move. To the contrary, stocks peaked on the opening bar and it was all downhill from there. Moreover, weakness in the final hour would have challenged the resolve of anyone bent on bottom-fishing.

The fleeting, bull-trap opening was not quite strong enough to get AAPL or the E-Mini S&Ps to the respective targets I’d sent out the night before. The shortfall in either case was not large, but the subsequent selloff had some subscribers wondering whether I was still confident the targets will be reached. The answer is yes, mainly because of the way AAPL impaled a Hidden Pivot midpoint resistance on its way higher on Monday.

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