July Silver futures tripped a 'mechanical' short last week similar to one in gold that went profitable the next day. The trade is predicated on a further fall to 19.64, but in theory taking a partial profit would be warranted at p=21.10. The initial move down to p breached this Hidden Pivot support but not by much, implying that the C-D follow-through leg currently in progress is less than certain to achieve the 19.64 target. We'll be better able to judge the odds of this once we've seen the downtrend interact for a second time with the pivot. For now, though, you can use p2=20.37 as a minimum downside objective.
Although today's E-Mini S&P tout sees a move to new record highs as imminent, I have reproduced a long-term chart as a reminder that bulls will be up against a very formidable Hidden Pivot target at these levels. Specifically, a 1999.00 pivot (adjusted slightly from my earlier tout) that has been 27 years in coming precisely completes a pattern begun from the point 'A' low at 244 recorded at the bottom of the 1987 Crash. That said, a strong push past the target would put yet another Hidden Pivot in play at 2140.58 that comes from the August 1982 low of 102.42. How strong a push? My hunch is that a two-day close above 2030 would clear the path to the higher number. _______ UPDATE (10:24 a.m. EDT): A subscriber has suggested using a 216 low for the '87 Crash, and so I will. I vaguely recall that number, even if -- incredibly -- searching a million web pages, I was not able to find it initially. The new low will give the S&Ps room to run up to as high as 2028 before the target can be considered fulfilled. I expect it to work very precisely -- i.e., within 3-4 points -- and that is why it is important that we use the actual, exact low for 1987.
An alert chat-room denizen spotted the target shown, and it's a jim-dandy. Pivoteers will notice that the point 'A' low seems to be positioned in the middle of nowhere. In fact, it is at 244, the low of the 1987 Crash. The remaining two coordinates are so clear as to leave little doubt about the importance of the resulting 2028.44 Hidden Pivot target. So far, the S&Ps have gotten as high as 2011.17 -- close enough for us to infer that a MAJOR top may already be in. If so, we are covered via DIA puts that I suggested buying and which are still attractive (see tout for details). As I noted in the chat room, it is inconceivable to me that the stock market will NOT make a top of at least tradable importance very near the target, so you should position accordingly. ______ UPDATE (Sep 9, 7:56 p.m.): There are more exchange vehicles tracking the S&P 500 that one can count, but depending on which you use, the Hidden Pivot target given above could be as low as 2018.04. If so, that would mean that the so-far high at 2011.77 came even closer to fulfilling a price objective that had been 27 years in coming. Our trading bias should therefore be bearish, with wider-than-usual-stops for any short positions taken. See today's E-Mini S&P tout if you want a precise way to gauge the bear's strength at any point in time. _______ UPDATE (September 15, 12:43 a.m. EDT): So far, so good -- even if progress to the downside has been labored. The INX appears bound for the 1982.23 target of (on the hourly chart) A=2007.51 (9/5): B=1982.99 (9/10); C=1997.65 (9/11). The current correction up to (and slightly past) the 1985.29 midpoint pivot is therefore short-able if via camouflage.
The weekly chart of the S&P 500 offers a compelling case for a melt-up before year's end to 1905, six percent above current levels. Notice the very precise stall at the midpoint pivot (red line) on the first attempt to get past it. This not only validates the pattern itself, but also adds to the likelihood that the target will be reached now that the midpoint has been obliterated. Traders should adopt an aggressively bullish stance until the target is reached. They should also treat a pullback to 1641 (green line) as a gift, since it would offer an excellent opportunity to get long belatedly for a potential last-gasp surge to 1905.
For purposes of getting short, we're using a target in the E-Mini S&Ps that lies just above Friday's record high. However, the cash index achieved, and very slightly exceeded, an equivalent target at 1617.84, so we'll need to be ready to position ourselves via camouflage in the former. Notice that extending a lesser, finishing-stroke abc yields an unachieved target at 1648.37. Rather than try to reconcile this with the E-Mini target, which is somewhat lower, we'll simply take both into account and let each inform our expectations for the other.
A chat-room denizen posted a dandy SPX chart yesterday showing a target at 1502.76 that looked both precise and compelling. The index had yet to punch through the resistance, but it clearly was not backing off. In the end, buyers bulldozed their way higher, scoring their seemingly umpteenth gain in the last umpteen days. When such a beautiful Hidden Pivot gets schmeissed, as this one did, we should look to the larger charts to explain it. Notice in the daily chart reproduced alongside that there is yet one more rally target even more daunting than the one breached yesterday. It lies at exactly 1551.12, and you don't need me to tell you we'll want to short the bejeezus out of it when the S&Ps get there. Which they will. We'll use a tight stop-loss even though it seems inconceivable to me that buyers will make much headway above the resistance, at least the first time it's hit. We'll do the actual trade using equity options, so check out today's SPY tout for detailed instructions. _______ UPDATE (February 5, 10:26 p.m. EST): I'm going to retire this tout to an inside page for now, since the target is well above. You should set a price alert around 1545 nonetheless, since we'll want to take advantage if bulls get close.
