Rick Ackerman

We pored over possible entry set-ups in the E-Mini S&Ps, but it is the ‘camouflage’ set-up in March Crude that you’ll want to check out. The material is contained in the second half of this session. It explains how to get around crude’s propensity to behave less precisely than most other futures contracts in fulfilling Hidden Pivot targets. The workaround is relatively simple and accessible to anyone with a rudimentary understanding of the ‘camo’ trade.

The 2609.75 Hidden Pivot target we used to stay ahead of Thursday's avalanche gave way at day's end, implying the plummeting S&Ps probably have further to go, possibly significantly further, before they hit bottom.  I'd suggest using the 2419.00 target shown as a next-to-worst-case target. A fall to that level would equate to a 1700-point plunge in the Dow to 22,000. It will become more likely to be achieved if the red line, a midpoint Hidden Pivot support at 2572.88, is decisively breached. There are two logical, alternative possibilities: 1) the futures reverse from the low they made on Thursday just inches from 2572.88; or 2) the 'secondary' pivot at 2495 eventually breaks their fall.  Any one of the three 'hidden' supports could turn things around, but a decisive breach of one would portend more slippage to the next.  Please note that my absolute worst-case low for this increasingly noteworthy sell-off is 2377.25. It is based on using the highest possible point 'A' on the chart, the record 2878.50 print on January 28.

Wednesday's promising rally sputtered out around mid-day -- a victim, as all rallies are, of its own excesses.  The Dow was up 380 points at the time, but this still fell about 140 points shy of a threshold where bulls would have been a good bet to recoup their recent, steep losses ahead of the weekend. They could surprise on Thursday with a short-squeeze exceeding 25,520. But that is more than 600 points above Thursday's close and probably too much to ask, considering how fatigued buyers looked at Wednesday's top. More likely in my estimation would be a drop of at least 400 points, to around 24423, before bulls begin to find traction.  Meanwhile, volatility ETFs looked primed for another spike. If stocks start to fall again with a vengeance, we can't say we weren't warned.

The E-Minis were up sharply in the first half of Wednesday's session but gave it all back and then some by the close. The fact that this occurred without the futures having exceeded the cliff from which stocks fell on Monday is bearish and implies they will now fall to at least 2609.75. Beware of an interim rally overnight or Thursday morning, since it could be a bull trap. This would become even more likely if the March contract dips slightly beneath 2660.50, Wednesday's intraday low. Many bulls would get shaken out, lightening whatever rally might follow. You should avoid getting enticed. Better yet, you should be prepared to short into a potentially fake show of strength.  Look for me in the chat room if you want guidance concerning this in real time.

The key to today's chart is that the intraday high exceeded the labeled 'external' peak at 2697. That means the futures could fall by as much as 70 points and still be considered a buying opportunity.  They looked to be in no danger of falling that hard Tuesday night, especially because DaBoyz were being careful not to juice them too greedily ahead of the opening bell. A shallow correction overnight would provide a bullish set-up for Wednesday, and that's what I am expecting.  If the likely short-squeeze that would result gets rolling, you can use the 2767.25 target shown as an upside target.

Boeing [BA], which has long topped portfolio managers' list of own-or-die stocks, is the only performer we need watch on Wednesday to determine whether the bull market is indeed dead. From the look of things at Tuesday's close, the stock is eager to put the fear of the lord in bears' hearts, and to rebuke the news media for all those scary, hand-wringing stories they've trotted out over the last couple of days.  I've provided some precise benchmarks in BA's chart (see below) so that you can follow the action knowledgeably and judge for yourself.  Bottom line:  If the stock pushes past 350 over the next day or two, the case for a bear market will be as dead as Kelso's nuts.

It didn't take long for Boeing shares to get back on the warpath. Now, if the stock can push past the tiny 'external' peak at 350.00 labeled in the chart, bulls would have shorts firmly by the cojones. I'd suggest setting a screen alert there, since a print above that number, especially one exceeding the red line at 351.61 as well, would signal that the bull market is back in force.  True believers  presumably would be eager at that point to foment the kind of take-no-prisoners rally that would make bears think twice about challenging them again any time soon.

Index futures were getting savaged late Monday night as DaBoyz worked feverishly to exhaust sellers so that They can run stocks up the ol' wazoo ahead of the opening bell.  This is a dangerous game, even for the thimble riggers who control America's securities exchanges. I'd flagged the 2533.50 downside target shown (click thumbnail inset) for the E-Mini S&Ps less than an hour ago, when it looked like it would take the whole night to get there. If it has been decisively exceeded by the time you read this, shift your sights downward to 2499.25, and thence to 2467.50. As always, the more easily each successive Hidden Pivot target gives way, the more likely the next is to be reached. Is this is the start of the Big One? Speaking as an inveterate permabear, my answer is no. I believe the selloff is merely corrective but that it won't end until permabulls start showing signs of real fear. This has yet to occur as far as I can surmise, and it could conceivably take climactic selling far nastier than what has occurred so far to bring them around.

Gold has bounced as usual from the depths of disappointment, if not quite the brink of despair. This tripped a 'counterintuitive' buy signal at the green line (1340.40) that I very deliberately chose to ignore. Let it be a learning experience if buyers go on to reach the 1371.40 target, particularly if they do so effortlessly. This would become more likely if they get past the 1350.80 midpoint Hidden Pivot without pausing for breath. Once this has occurred, a pullback to 1340.00 would trip a 'mechanical' buy signal that we'll consider on its merits at the appropriate time. _______ UPDATE (Feb 6, 6:32 p.m. EST): Gold has reverted to its wonted sludgepot mode, although the 1350.80 benchmark noted above kept us from waxing unnecessarily enthusiastic about the last rally. Now the futures are headed down to the 1318.40 target shown, a Hidden Pivot support that, just for the hell of it, you could bottom-fish with a 1318.50 bid, stop 1317.90. If it fills, good luck! You'll be on your own. _______ UPDATE (Feb 7, 7:36 p.m.): Gold stopped out the 1318.40 trade, but the April contract would become a 'counterintuitive' buy in theory if it rallies today to 1327.70. Here's the chart. _______ UPDATE (Feb 8, 5:59 p.m.): A weak rally tripped a 'counterintuitive' buy signal at the somewhat altered price of 1323.20. It could be good for a ride to 1337.30 or even 1365.60, but I am not recommending the trade unless you found it yourself and know how to manage the risk.  Please report any fills in the chat room if you'd like me to consider a tracking position.  Note: I have projected 3.11% for the Ten-Year Note, currently trading around 2.85%. As long as rates continue to rise, and the dollar to strengthen, my enthusiasm for gold