We should prepare for a potentially important market top today or tomorrow, since the S&P futures are stealing up on a crucial hidden-pivot target at 1231.75 that I first identified here in mid-February.  You may recall that I subsequently adjusted the target downward to 1230.50, a hidden pivot that has served as our minimum objective since February 25. Now, as the new weeks begins, I have one more, small change to make – a further downward revision, to 1229.50. This is what I shall call a “Groundhog Pivot,” after the Punxsutawney rodent who, according to local myth, has predicted six more weeks of winter if he fails to see his shadow upon emerging from his lair on February 2, Groundhog Day.  

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For our purposes, the pivot at 1229.50 will work as a kind of seasonal indicator in reverse, to wit: If the mini-S&P pokes its insistent little snout above that number by more than 2.50 points intraday -- or even better, closes above it -- that would imply spring has arrived and that the uptrend will enjoy felicitous breezes and sunny days for at least six more weeks. Conversely, if 1229.50 noticeably impedes the rally, it would imply that a top of at least middling importance is in, and perhaps one of much greater significance.

Juicy Odds for Bears

I’ve included instructions to get short in today’s Inside Edition, since, at the very least, the mini-S&P is likely to stall intraday at or very near our target.  As always, there are no guarantees. (In fact, the futures would be signaling additional upside potential to as high as 1295.25 if they blow through the pivot at 1229.50.)  But if you’ve been looking for a logical and precise spot for the cyclical bull market begun in 2002 to end, and for the much larger secular bear to resume, this could be it. Longtime subscribers will already know that I shun the sort of dramatic predictions that would purport to foretell THE top or bottom of a long-term trend. However, the pivot I’ve identified is very likely to be “a” top worthy of our utmost attention.

We should always keep in mind that every bear market begins with a single downtick off the high of a bull market. That’s why the odds of shorting near these levels with a very tight stop-loss are so enticing. For now, as you may have inferred, the target will pre-empt a fairly ambitious one that I flagged previously for Beazer Homes, an important market bellwether. However, if the S&P futures should easily push above 1229.50, it would strongly imply that Beazer’s “Hallelujah, brother !” target is apt to be achieved, and probably soon.