We had bids in below the market yesterday for the QQQs, Diamonds, the mini-Dow and the mini-S&P, and even though each fell very precisely to the low I’d projected**, we still managed to come away empty-handed. That’s because the respective bottoms were not reached until the final minutes of the day, hours after my time limits on our bids had expired. Stocks had moved earnestly higher in the morning, and I left my office to do some errands thinking I wouldn’t miss much. Imagine my surprise when I returned shortly after the close to find that just about every stock except for the sonofabitch homebuilders had reversed sharply to finish down on the day.

Not that we should be disappointed to have bought nothing. To the contrary, it may prove to be our good fortune not to have gotten what we’d wish for. Our bids were calculated to catch a bounce from the depths of any Monday morning weakness, and if the projected lows had occurred by no later than mid-morning I’d have been confident about bottom-fishing. But I am never comfortable buying (or shorting) at hidden pivots when they are achieved in the final moments of the session, as occurred yesterday.

Time of Day Matters

Granted, our support pivots held against the afternoon’s onslaught of selling – triggered, apparently, on news that the Fed was going to “look into” credit market derivatives -- and we should therefore not be too surprised to see stocks bounding higher this morning from their pivotally “correct” turning points. But I wouldn’t bet on it, especially because the microscopically tight stop-losses we typically use intraday when initiating positions at hidden-pivot swing points cannot be relied on during the opening minutes of a session, when pent-up emotions rule.

In any event, it’s becoming increasingly apparent that, bearish as we are, and much as we believe shares are staging for an autumnal collapse, Mr. Market evidently is not going to bless us with the kind of juicy, three-day rally we’d be eager to short. We may have to settle for less, perhaps by initiating shorts intraday at the peak of a very-minor upward retracement. If this sounds appealing and you’d like to be signaled intraday, I’d suggest leaving your bulletin launcher open during regular session hours.   

**  Hidden-pivot targets vs. actual Wednesday lows were as follows:  mini-S&P, 1208.50 vs. 1208.75; mini-Dow, 10427 vs. 10423; Diamonds, 104.28 vs. 104.16; and QQQ, 38.29 vs. 38.46.