The futures spent an entire week screwing the pooch, unable to surpass the 3392.75 Hidden Pivot we’ve been using since June to stay aggressively on the right side of a senseless trend. I’d suggested taking a small put position in DIA or SPY over the weekend, but I’ll wait till I hear from a few subscribers in the chat room before I decide whether to establish a tracking position. The failure of bulls to take flight last week can be attributed to more than just a Hidden Pivot resistance; for in fact, it closely coincides with the all-time high at 3396.50 recorded on February 20. Bulls were bound to be skittish at these levels, and last week’s nervous behavior may require an emetic and a running start to vault the futures into record territory. Although there are good reasons to expect this, we should be alert to the possibility that the wild stampede since March 23 is at or very near an end. _______ UPDATE (9:32 p.m.): Moments ago, the futures popped to my number exactly: 3392.75. Rather than pretend a target I’ve been drum-rolling since June is going to stop this frothing-at-the-mouth beast precisely, or that a day of consolidation has been squandered on creating a slightly higher high than the intraday peak, let me offer you a fresh perspective that could prove more useful. Specifically, I’ve redrawn the graph to show two very-closely spaced Hidden Pivot targets that lie, respectively, at 3999.25 and 3402.75. The first is the ‘D’ terminus of a small ABCD; the second, the midpoint pivot of a much larger pattern tracing back to July 31. I strongly expect a tradeable top to occur at one number or the other, or perhaps midway between them; but if I had to pick one, I’d say 3402.75, give or take two ticks, is where to attempt a very tightly-stopped short. I do not mean to imply that 3402.75 is certain to produce The Mother of All Tops — only that a tradeable top is likely there. As always, a decisive move through so clear a Hidden Pivot resistance should be regarded as evidence that the pattern’s D target — in this case 3486.00 — is in play, and that p2=3444.38 is likely to be reached. _______ UPDATE (Aug 19, 8:30 p.m.): The futures reversed and fell hard after inching closer to two Hidden Pivot targets where we’d been looking to get short. They lay, respectively, at 3399.25 and 3402.75, but the intraday high occurred at 3392.75, precisely to-the-tick at a target I’d been focused on since June. Oh well. No one mentioned either in the trading room, so I assume subscriber interest in the trade was nil. ______ UPDATE (Aug 20, 5:49 p.m.): Good thing we didn’t take the 3402.7 rally target for dead, since bulls were back at it today. The pivot is still shortable with a stop loss as tight as you can abide, but if bulls turn it into paté, they could romp to p2=3444.38, or even D=3486.00. Both of these Hidden Pivots are shown in this chart.
ESU20 – Sep E-Mini S&P (Last:3383.25)