Tuesday’s rally demonstrated how it’s possible to be quite confident about where a stock is headed without necessarily being able to capitalize on it.  In the chat room, a hawk-eyed Pivoteer identified an 1846.75 target on the weekly chart. At the time, the futures were in the throes of a five-day stall at an 1840.00 target we’d used earlier.   Targets don’t get much prettier than the one at 1846.75 (see inset), and so I noted in the chat room that this ‘very compelling’ price objective ‘begged to be shorted’.  However, I warned that the Hidden Pivot might prove to be un-tradable, since, “If Mr. Market [was] his usual diabolical, sonofabitch self, the futures [would] end the day within 1.00 point of the target.”

As indeed they did.  In the final hour of the session, the March contract shot up to a high at 1846.50 that lay just a single tick shy of our target. The next 30 minutes produced no further gains, and the futures eventually settled at 1846.25, a half-point from the target. This would have made for a great short if it had occurred around mid-session.  But on the closing bell? No way. [Breaking news: In the chat room this morning, with the Dow down nearly 100 points, the aforementioned hawk-eyed Pivoteer reported having gotten short minutes before Tuesday’s close using call spreads in SDS, an ETF proxy for ‘ultrashort’ S&P 500 positions.]

So what now? I expect this vehicle to continue higher in the weeks ahead.  However, if the rally were to launch in the first hour or two of Thursday’s session, that would be warning bears either to step aside or to go with the flow, since the Hidden Pivot at 1846.75 is not exactly chopped liver. In fact, the target has been more than a year in coming, suggesting it is capable of putting up a fight for perhaps a good 5-7 days before falling to the bullish horde. Plan accordingly.