Wednesday, December 3, 2014

Higher share prices seemed almost as likely as sunrise when the regular session ended on Tuesday. Check out the E-Mini S&P tout if you want to see how far this rally is likely to get over the next day or two.  Gold, on the other hand, looked poised for a further drop that would lengthen the correction off Monday's exuberant peak. There may be an opportunity to get short, but also to get long at a Hidden Pivot target that looks likely to be reached on minor weakness.

In after-hours trading Tuesday night, the February contract was poised for a $10 tumble to the 1184.40 target shown. This is by no means ordained, however, and we could still be pleasantly surprised if the futures should reverse course at the 1193.90 midpoint support (see inset), then power above 1203.40 to generate a fresh, bullish impulse leg on the hourly chart.  Night owls can try shorting a breakdown below minor 'structural' support at 1193.40, and/or bottom-fishing at 1184.40, stop 1183.90. _______ UPDATE (10:38 a.m. EST): And pleasantly surprised we were, the futures having rebounded after going no lower overnight than 1193.50.  They are currently trading 1210.90, 'actualizing' a promising, bullish impulse leg for a shot at 1244.40 if p=1217.90 gives way. _______ UPDATE (December 7, 10:55 p.m.):  The futures looked bound for at least 1178.70, but if that Hidden PIvot support is breached by more than 1.00 point, look for more slippage to a minimum 1173.70

The broad averages trudged higher on Tuesday, shrugging off glum reports from retailers who undoubtedly had hoped for better results on Black Friday. There are of course no Black Fridays on Wall Street -- only a shimmering hallucination of rainbows and lollipops in a world where money is nearly free for the taking if you are a global player. From a technical standpoint, the E-Mini futures look poised for yet another thrust into new record territory.  The stall at the precise 'midpoint Hidden Pivot' of the pattern shown implies that, once above it, the December contract will be bound for a minimum 2088.25. That would equate to a Dow rally of about 180 points -- a feat that is unlikely to draw much notice from the lotus-eaters of the investment world.  Night owls keen on participating may have an opportunity to do so if this vehicle pulls back to 2055.50 without having first exceeded Tuesday's 2068.00 high. A stop-loss as tight as three ticks could be used to bottom-fish there, but you'll be on your own if the order fills. Please note that a similar strategy did not work yesterday because there was barely a pullback before the broad averages began to move higher after the opening bell.