E-Mini S&P

Who needs sophisticated analysis when the broad averages rise or go sideways 95% of the time, and when they never fall for more than three consecutive days? The chart assumes the E-Mini S&Ps will continue their ascent next week, possibly stopping for a short breather when they hit 7694.25, the 'D' target of the conventional pattern shown. The coordinates are probably too obvious to produce a precise top at that price, a Hidden Pivot, but I would still encourage you to try shorting there provided you know how to set up a 'camo' trigger to minimize entry risk.  The goal is to make money even if the futures keep rallying, although that might entail being short only for a fraction of an hour. If we continue to short this gas-bag routinely at minor rally targets, one of these days we might actually find ourselves onboard for The Big One -- and what great fun that will be!

Last week's price action left the scribblings of Mr. P.O.S. Market at his most devious on the daily chart.  The intraday high on Friday completed a corrective pattern that could easily be taken for a double top. But who would be crazy enough to go home short over a three-day weekend when stocks have been rising eight days out of ten?  And yet. I told subscribers nonetheless to take a few puts home, just in case.  The completed upward correction is not all that is tricky here. The low of the week appears to have touched the green line, signaling a potentially important sell signal for the psychotic run-up since March 31. But if you look at it with a magnifying glass, you discover that the low did not quite trigger a sell signal: for in fact, because the 7354.19 trigger price must be rounded down to 7354.00, the low actually missed touching it by 0.25 points, or a single tick. If I were in a gambling mood, I would have jumped the gun and shorted the crap out of Friday's high, especially since I'd predicted it. But if I am doing this strictly by-the-book, the short becomes more speculative, hence the recommendation to take home just a handful of puts.  However, if the futures fall from the get-go on Sunday and continue down to the green line, I will do whatever it takes to establish a short position, even though it will be more difficult than if I'd placed my bet on Friday, when the rally looked far more menacing to shorts. Because there is such a long drop to the target at 6796, fear and greed will make it a, um, real bear to get short after this brick has begun to plummet. Stay tuned.

The chart imagines that Friday's impressive selloff was just the start of significantly more weakness to come. But notice that the worst case is 6795, a 10% haircut that wouldn't even qualify as a bear market. This scenario is a step ahead of reality, however, since the downtrend has yet to trigger a conventional sell signal at the green line. If that happens, we will have been onboard from within a hair of the top, since we purchased SPY 720 puts for 0.89 near the high of the previous day's rally. Although the options ended the day a few cents underwater, they vaulted to more than twice our cost when stocks opened sharply lower on Friday. Even better, taking some profits off the table early in the session gave us room to buy more puts toward the end of the day, when they 22 May 720s came back down to 1.00. (Please note that Rick's Picks recommends buying options only when we expect them to at least double in price quickly, usually within two hours.)  The cherry on top was their exhilarating surge to 1.65 in the final 30 minutes of the session, when stocks dove. A comment I'd made in the chat room an hour earlier explicitly  anticipated this: "With crude quotes not backing off as they usually do," I wrote, "can you guess which direction the stock market will take when the obligatory, end-of-week nitwitting commences?" Loaded with cheap puts, we'll be looking forward to Monday's opening instead of dreading the effects of rising oil prices, an ominous breakout in interest rates, and whatever other troubling headlines greet the day.

This chart, with an 8107.25 target, has the virtue of simplicity: it follows all my rules, and that is reason to expect it to work. I've mentioned a couple of lesser targets based on somewhat different coordinates, but, as the song reminds us, it's never good to mess around with mister in-between.  The main subjective concern is whether last week's move past the midpoint Hidden Pivot (p=7230,25) was sufficiently effortless to ensure the target, a 23% jump from here, will be reached. Because buyers did not exactly impale the resistance, I cannot guarantee that this will happen. But I am about 75% certain of it, and 95% sure that p2=7668.75 will be achieved.  In the meantime, although a relapse to the green line (x=6791.75) would be read by many technicians as the possible start of a bear market, it would signal a stellar buying opportunity from a Hidden Pivot standpoint. I will mention one other number that could be consequential: 7499.75, the 'D' target of a conventional pattern. But because it comes from a composite monthly chart, we shouldn't expect it to work quite  as precisely as a Hidden Pivot resistance on a chart where all four coordinates are tied to the June contract. _____ UPDATE (May 12, 3:56p.m.): A coincident target at 7498.00 drawn from the hourly chart needs to be considered as well. It is the 'D' Hidden Pivot of a pattern that began on April 12 with A= 6767.00 on the hourly chart.  This is yet one more reason to get short in some fashion when, either Wednesday or Thursday, ES sleazes its way up to 7500, a very round number that is bound to draw a crowd of clowns, algos and short-covering ninnies.  

A measly 3% rally would reach the 7499.75 target shown. This is a composite chart, so we shouldn't expect to see precise stopping power, but it should be close enough for government work.  There are two other Hidden Pivot resistances to hold in mind if the futures keep going: 7644 and 10,336. That last number is the highest I can project on the monthly chart, and it is intended to stretch your imagination, especially if you are a permabear.  Because penetration of p=6166.00 was effortless and decisive, it's all but certain the lower target will be achieved. Since this is the bull market that won't die, don't assume the target will mark an important top unless it coincides with Iran's complete surrender.

The 7208.75 rally target has excellent potential as a place to get short, although we shouldn't expect it to contain the stampede. With a conceivably perpetual cease-fire in the offing, this would seem to be the kind of uncertainty Wall Street can live with. Trump might wind up achieving none of his key objectives in the war, but that hardly matters to investors stoked by greed from the stock market's robust performance amid an ostensible global crisis. The nearest significant obstacle is a midpoint Hidden Pivot at 7230.25, but if the futures shred it, the previously mentioned 8107.25 target will be in play.

The 7230.25 midpoint resistance shown is my minimum upside objective for the near term. It will pose a crucial test for bulls, since a decisive penetration, especially on first contact, would imply that the rally is likely to continue. The immediate objective thereupon would be p2=7668.75, but as always, a swift move through it would clear a path to as high as 8107.25, the D target.  The 7230.25 pivot is a must-short, provided you're adept at using 'camo' triggers to curtail entry risk. The technique is described in the Hidden Pivot Course I've made available for free to all old subscribers and to new ones who have signed up for a full year.

The futures were unable to summon the energy on Friday to screw even the proverbial pooch, although I still suggested trading, or at least monitoring, a bullish 'mechanical' possibility that is detailed in the chat room. It would attempt to leverage a 6975.00 rally target derived from a conventional ABCD pattern that is made more explicit in a version of the chart linked in my post. I have stripped the one accompanying this tout of visual qualifiers because of my growing fear that AI can be used to rip off my system. The rally target is associated with a pattern smaller than the one yielding a 7030.75 target drum-rolled here earlier. It will remain valid regardless of what happens to the Hidden Pivot at 6975.00, which you can short if you have profited on the way up.

A pullback to the green line (x=6467.33) would trigger an enticing 'mechanical' buy, notwithstanding the bearish drumbeat of a war with no clear ending. Investors demonstrated on Thursday they don't really care about the headlines, so overwhelmingly eager are they to throw money at stocks. Even a big leap in oil prices elicited hardly a shrug. Although NYMEX crude hit $114 barrel at the intraday peak, up 14%, the E-Mini S&Ps ended the session with a short-covering scramble that left the index up five points on the day. I still believe this is just a bear rally, but its near-term potential is to the 6810.00 target shown in the inset, or even to the 7030.75 Hidden Pivot 'D' of a larger pattern I identified in the chat room. The chart shows how a dip next week could make the short-term picture even more bullish. _______ UPDATE (April 8, 8:15 p.m.): Today's deftly orchestrated, rip-'em-a-new-orifice short- squeeze has cleared the way for an almost certain rally to the 7030.75 target identified above.  Its close proximity to the all-time high at 7097 would turn nearly everyone super-bullish, particularly bears, presumably setting the hook for The Big One following a run-up to marginal new highs. Isn't that what bear rallies are for?