As always, the strongest rallies are being driven entirely by short-covering. Even so, it can sometimes take a few days to goad bears into stampeding anew. Usually, the latest drivel from the Fed will suffice to trigger a panic that sends stocks into wild spasms. Something has changed, however; for it has become clear over the last few months that it no longer matters whether the news is ostensibly bullish or bearish. Whatever the headline, the resulting movement of shares has invariably been upward. Which brings us to the chart accompanying this tout. Although two days of dithering have failed to push the futures past the red line, a crucial resistance that I refer to as a midpoint Hidden Pivot, there should be little doubt that buyers will punch through it either today or Monday.

If and when that happens, I’d lay 4-to-1 odds that the futures will hit the D target at 2169.25 within the next 5-8 days, if not sooner. That would be equivalent to a Dow rally of about 650-700 points. Traders who are familiar with my Hidden Pivot Method may have noticed that the stall the last two days has occurred just shy of the red line at 2095.63 rather than precisely at the line as we might have expected. This is probably because of the ‘twin peaks’ resistance posed by a double top near 2094 in late April that began a month-long decline. That makes these tops a relatively important obstacle. Once they are exceeded, however, it will be clear sailing all the way to 2169.25. If the rally smashes through the pink line, a ‘secondary Hidden Pivot at 2132.44, within the next 3-4 days, it would likely be steep enough to suggest that a blowoff top is in progress.

Whatever the case, we should trade with a very bullish bias above the 2095.63 red line, the better to rack up as much profit as we can in order to cushion a short from 2169.25.  There are no guarantees that that will be THE top, but I have little doubt that we will see a tradable reaction from within a hair of that price. The target is sufficiently clear and compelling that even my drum-rolling it publicly is not likely to jinx it. Bottom line:  The E-Mini S&Ps WILL get to the target, and the target WILL produce a tradable pullback. Traders familiar with my Hidden Pivot Method should plan accordingly, since ‘mechanical’ entries on retracements to any of the three Hidden Pivot levels — x, p or p2 — will offer the best odds we’ve had on this vehicle in a long while.  As always, all bets are off if nuclear war or some catastrophic act of terrorism cools the insanity. _______ UPDATE (May 30, 11:46 a.m. EDT): In holiday-shortened trading, the futures have extended their winning streak above the crucial 2095.63 Hidden Pivot resistance flagged above. If Tuesday’s opening is strong, it would all but clinch more upside to p2=2132.44, and an easy move past that pivot would further shorten the odds of a climactic run-up to 2169.25. I’ve refreshed the chart to show these developments. Traders take note: The red line (p) and the green line (x) are now both in play as places to get long ‘mechanically,’ provided you are familiar with the rules governing this type of trade.