The momentous debate over judicial filibusters is making C-Span more interesting these days than the stock market. I had both running side-by-side on my desk yesterday, but it was no contest. The E-mini S&Ps were in a trance-inducing pattern that did little more than amplify the overnight session’s faint pulse, producing gratuitous six-point swings that only a seer might have traded profitably. Fixate on these patterns long enough and you start to imagine that each might have been easily predicted. Just don’t try to trade them, though, because if you do you’ll wind up like some desert wanderer who has attempted a swan dive into a mistaken vision of Lake Powell.

To show you what I mean, take a look at the chart below. At first glance it looks like the kind of chop that should make a seasoned trader head for the links. However, on closer inspection we find an intraday low at 1185.25 that corresponds precisely to a hidden pivot. Work the numbers yourself if you don’t believe me. Starting with the assumption that AB=CD, we find that the distance from A (1191.75) to B (1186.50) is 5.25 points. Subtracting that number from our point ‘C’ high at 1190.50, we get…1185.25. You might assume that I was waiting at that price with an 1185.25 bid, stop 1184.75. But in fact, I was not even tuned to C-Span or my TradeStation monitors at the time, but rather to Britney Spears’ Ten Most Outrageous Moments, on VH1.

(Click on chart to enlarge)

Returning to our chart, since there is nothing interesting on either C-Span VH1 at the moment, some of you might ask, how do I extrapolate an AB “impulse leg” from the segment labeled as such on the chart? This is a logical question, since, when we think of trend legs, we tend to picture them, PowerPoint-style, as straight lines. But in a rules-based world, that’s almost as illogical as picturing atoms as little dots. What allows us to call AB a straight line, so that it yields a hidden pivot at exactly 1185.25, is that the dip down to point ‘X’ did not penetrate any previous lows. That doesn’t occur until ‘B’ is reached, a point that lies a crucial single tick below ‘Y’ (1186.75). Voila! An impulse leg.

Or was it? Whichever, I’ve filed a mental picture of the pattern in my mind, to be used at a later date. Let’s hope that if and when the opportunity comes, Britney Spears is nowhere around. Incidentally, long-time readers may be wondering how I could have passed up the chance to illustrate today’s commentary with a cheesy shot of Ms. Spears. I’d like to be able to say that dignity and decorum dictated my choice. In truth, I simply ran out of time today for such typographical tricks.