June

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!

If you got long at or near the green line as I advised here last week, your theoretical, unrealized profit on the standard four contracts would be around $71,000 -- more than enough to pay for your subscription and a luxurious week in your favorite destination. Typically, I advise taking off half the position at the midpoint Hidden Pivot, shown here as a red line at 4636.80. At that point, you would have a realized gain of slightly more than $50,000; plus, two contracts left, each showing an unrealized gain of about $25,000, for swing at the fences. The 5144.00 rally target we've been using for months will remain valid unless the pattern's point 'c' low is violated first. But, yes, you're right: Who cares, as long as we can continue to exploit this tired pattern for all it's worth. ______ UPDATE (Jun 1, 9:52 a.m.): Easy come, easy go. A 'dynamic stop'-loss set at 1:3 would have stopped out the trade at 4576 for a fat gain, and an 'impulsive' stop on the hourly chart would have done the job at 4512. However, I will continue to track the position as though bulls are still holding the bag, frozen with fear by this morning's gratuitous plunge. Both of these risk-management tactics are covered in the Hidden Pivot Course I've made available free to subscribers. I will switch to the August contract shortly.

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.

June Crude has broken above the 104.64 Hidden Pivot Midpoint where I'd told you to expect a crucial test of resistance. The intraday peak on Friday was just marginally higher, but it is sufficient to imply the 120.62 per barrel target is no worse than an even bet to be reached. We'll stipulate that a two-day close above p is needed to confirm the rally is strong enough to reach D. Trump has been pushing the idea that energy prices will drop sharply when things settle down in the Middle East, but I'd suggest putting your trust and confidence in these charts, which I will update as warranted.

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.

Friday's dive added to the insufferable tedium that has characterized the bullish pattern shown. Its 5144 target has been a guiding feature for two months, not that that has helped much.  A strong dollar has been weighing on gold and will likely get worse, according to some prognosticators. Bullion prices have endured this pressure before and are likely to do so again, but it could mean the 5144 target will be a long time in coming. In the meantime, a pullback to the green line (x=4382.40) should be regarded as a good opportunity to go bottom-fishing. The huge, 4128.40 stop-loss demands a 'camo' trigger if you are game, since the 'textbook' stop would entail entry risk in excess of $25,000 per contract. Using Hidden Pivot tactics, you should be able to reduce that by at least 95% to less than $800. ______ UPDATE (May 22): The futures spent every moment of last week vigorously screwing the pooch in a tight range above x=4382.00.  There are no changes or additions to the analysis and guidance above.

In my last weekly commentary, I drum-rolled a 128.19 target that seemed to grow increasingly remote as the futures descended last week to an apparent low at 88.66. However, a potentially robust turnaround was signaled the next day when the June contract bounced, triggering a theoretical 'buy' at 96.65. It is tied to a 'D' target at 120.62, but we'll need to see how bulls interact with the midpoint Hidden Pivot resistance at 104.64 before we can judge confidently whether the target is likely to be reached. The pattern is compelling enough to expect an accurate and reliable assessment of the uptrend's strength.

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.  

The 'mechanical' buy at the red line (p=4636.30) went in the black last week with a pop to 4775 on Thursday. That would equate to a theoretical gain of around $14,000 per contract, but there is an additional $36,000 of profit potential if the futures reach the 5144.00 target. Price action at p has been wishy-washy, but that is no reason to presume that the uptrend will not reach p2=4890 at least. When it does, you should take off half of the position you hold, either in this vehicle or in an equivalent such as GLD. Be alert to the possibility of a stall or reversal at 4847.40, a truly 'hidden' resistance.