Late Sunday night, the Mini-S&Ps were butting up against a minor “Hidden Pivot” resistance at 1401.25 whose breach would suggest that yet another bullish surge lies immediately ahead. We’ve gotten so accustomed to seeing bears scramble for cover ahead of Monday morning’s opening that, in contrarian fashion, we’ve waxed increasingly cautious whenever it happens. In the current context, that means paying close attention to an E-Mini S&P  rally target not far above that has the potential to stop bulls dead in their tracks. [Click here for free access to the exact number.]  Notice that we are not guaranteeing that the Mother of All Bear Rallies is about to end. To the contrary, and as many of you will have surmised long ago, the odds will always be against those who would attempt to predict exactly when a rally that has been running more or less non-stop for years will seven-out. Even so, hope springs eternal that one of these days, U.S. stocks will lurch into realignment with darker realities rather than with the shameless propaganda requirements of an election year.

In the meantime, please don’t get the idea that this kind of wishful thinking on our part is just sour grapes.  In fact, we were long and bullish on the E-Mini S&Ps as recently as last week after a trade triggered during one of our regular weekly online tutorial sessions. Over the short period we held the position, the futures didn’t get very far.  However, a modest rally allowed us to exit with a small paper profit, and we planned – still plan — to reverse ourselves via a short if the futures hit the “magic number” alluded to above.  That number, as noted, is a “Hidden Pivot” as determined by our proprietary forecasting method, and it looks sufficiently compelling to suggest that bulls are bound to struggle to get past it. Moreover, the short-term bearishness of this picture is corroborated by price action in the Wilshire, Russell and Dow charts shown above.  Each of the charts, which were posted on Sunday by a “Pivoteer” in the Rick’s Picks chat room, shows a stall in a dangerous place as last week ended.

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Notice  also the how, in each instance, the “fast” line of the MACD, a finely tuned indicator of strength, direction and momentum, is starting to roll down through the “slow” line. Some chartists would say this is ominous, but we’d rather wait and see whether the “crossover” of fast and slow lines actually occurs before we draw any conclusions. To be sure, it wouldn’t be the first time DaBoyz set the hook for a short-covering panic by lulling bears with some technically seductive bait.  Regardless, we’ll be eager to get short speculatively at our target if we get the chance. Click here if you want a ringside seat in real time.

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