ESZ12

We oohed and ahhed during yesterday's tutorial session yesterday when we realized in real time that the pattern shown was just inches from a juicy 'D' target at 1437.75.   At least one subscriber shorted it, and he graciously posted my trading advice in the chat room as the pattern was ripening.  It took more than an hour of choppy, toppy action before short sellers could sit back and relax, but if you waited patiently for the pattern to generate a 'camo' entry signal on the 3-minute chart, you were rewarded with a halfway decent one at 1434.25 around 2:54 p.m.  (You can learn to do this stuff yourself, and it's easier than you think. Click here for details -- and a $50 discount coupon.)

The chart shows what the futures would have to do to turn currently "dueling" impulse legs in bulls' favor.  It is the equivalent of an uncorrected DJIA rally of about 200 points, so buyers will have their work cut out for them, even with seasonality heavily in their favor (December is the second most bullish month of the year, historically speaking.) Meanwhile, the best opportunity to bottom-fish a pullback would be on a drop to the 'p' midpoint shown. Please note that its location could change if a higher point 'C' is created.

After exiting a short position last week at 1388.25 for a theoretical gain of $4600, we are once again disinterested observers.  There's not much to get  excited about at the moment, but if you're bored, try shorting the 1413.50 target of the pattern shown with a three-tick stop-loss. The only reason I'm suggesting it is that the three coordinates used to calculate the target are all single-bar. However, this gambit is worth only a one-contract position.

If you're still short, stick to the 1388.25 stop-loss. The purpose of using a stop-loss based on the creation of a bullish impulse leg is to avoid getting ejected from a trade merely because DaBoyz have elected to "run the stops."  So far, this has kept us in the trade, although my strong hunch is that seasonality over the remainder of the week will suffice to push this vehicle above 1388.00.  If so, it won't be such a bad thing, since anyone who followed my advice precisely will come away with a $4600 gain on a trade that risked, theoretically, just three ticks on entry.

For tracking purposes, we remain short a single contract whose 1470.00 cost basis reflects paper profits taken on three more contracts originally shorted at 1399.25. Stick to the 1388.25 stop-loss given here earlier. If it's hit, the theoretical gain on exit would be $4600.  Hard to say how much more mileage DaBoyz will be able to squeeze from seasonality and the heavily oversold readings that obtained until Monday, but if they can waft this gas-bag above the 1399.75 'external' shown, they'll have unchallenged control of the game through Black Friday, at least.

The pattern shown leaves little doubt about the downtrend's immediate destination, a Hidden Pivot target at 1321.25.  We remain short a single contract which, if covered at 'D' , will produce a theoretical gain of about $7500. (You can review this trade in the archive to determine whether you'd have taken it. Click here for a free trial subscription.)  That's what I'm advising, since the target looks compelling enough to warrant a speculative long.  Officially we'll look to board with a 1321.50 bid, stop 1320.75, but if you're up to it, start looking for a 'camouflage' buying opportunity from around 1323.00 on down.  Please note that my target is derived from the one-off 'A' at 1430.25 rather than the visually obvious one at 1431.75.  This implies that if the downtrend should breach 1321.25 by more than perhaps three ticks, the true bottom would come at 1319.75.  It too would be tradable -- with a stop-loss as tight as four ticks. Alternatively, and since we should always leave room, even, for the high  unlikely, an upthrust exceeding 1368.50 would put bulls back in charge, at least for the near-term.  Camouflageurs looking to nickel-and-dime the entry risk of a bull trade may find this possible on a shallow b-c pullback from within the range 1368.75-1370.25.  ________ UPDATE (Nov 19, 1:04 a.m. EST): I forgot to mention this above, but you should keep the short tied to an impulse-leg stop on the hourly chart.  That implies a print at 1388.25.  Otherwise, all other advice proffered here earlier continues to apply.

We remain short one contract via a tracking position with a cost basis fattened to 1470.00 by theoretical profit-taking thus far.  I am still suggesting an impulse-leg stop based on the hourly chart, but I'd suggest reviewing the recording of Wednesday's tutorial session to make sure you know what this means. (Note: I can arrange a viewing for Hidden Pivot webinar grads who are no longer signed up for the weekly sessions.)  To guide you in the meantime, let me suggest a stop-loss just above 1399.75 if you're swinging for the fences, but above 1388.00 if you're playing it more conservatively.  The significance of both price points is shown in the chart.

For your guidance, I've established a tracking position that leaves us short a single contract with an effective cost basis of 1470.00. To manage risk dynamically, I've suggested an impulse-leg stop-loss that would trigger at 1397.75, based on the pattern shown.  Keep in mind that the upthrust would need to surpass both peaks shown without a 'b-c' correction, but you should exit in any case if the rally exceeds peak #3.

We are short two contracts with an effective cost basis of 1418.00 after I advised covering near 1380.00 half of a position initiated at 1399.25. This is a tracking position created for the further guidance of traders in the chat room who reported having taken action. For now, plan on covering one contract at 1366.00, just above the 1364.50 downside target I'd advertised as a lead-pipe cinch when the futures were trading around 1392. You should make that order o-c-o with a stop-loss to close out both contracts if there's a bullishly impulsive thrust on the 15-minute chart. What this implies is that the stock must take an uncorrected leap surpassing at least one internal and one external peak. I've labeled two 'externals' in the accompanying chart, but an 'internal' peak could be created near the very bottom of this formation if the futures fall back just a few ticks  beneath their current 1375.75.  The effect of that would be to lower the stop-loss from just above peak #2 (1388.75) to just above peak #1 (1379.50). _______ UPDATE (9:50 a.m. EST):  The futures bottomed at 1363.50 this morning, an hour before the regular session began, and have rallied 11 points since. We are now short one contract on paper, but what the hell do we care about being short, since our cost basis when we impute the theoretical gain of 52 points for the contract covered at 1366.00 is...1470.00. To manage the risk of this single-contract short position, I'll suggest an impulse-leg stop-loss on the 60-minute chart. At the moment, that would require the current rally to remain uncorrected between the 'external' peaks at 1381.75 and 1397.50.  If such a powerful rally occurs, with us on the wrong side of it all the way, it will still leave us with