E-Mini S&P

'Dueling impulse legs' left bulls and bears pretty evenly matched when yesterday's regular session ended, so we shouldn't be surprised if today's ups and downs end the week with the futures little changed from Thursday. In any case, night owls seeking traction should focus most immediately on the bullish pattern shown, since it proceeds from an eminently legitimate impulse leg on the hourly chart.  The rally is too obvious to perfectly suit our needs, but if the futures make their way higher overnight, odds favor a launch from a second or even third point 'C' low.  ______ UPDATE (1431.25)  Unmitigated weakness took the futures down this morning without even bothering to trick bulls with a 'bad'  C' or two. The downdraft projects to 1411.50 if the 1428.00 midpoint -- missed by 1.00 point so far -- is decisively breached.

Seven straight days of tedium have provided little in the way of trading opportunities.  The (very) minor trend was bullish at the bell, but a night owl would have to be bored out of his mind to pounce on it.  If the futures ever lurch back into gear, however, they should be presumed bound for a minimum 1470.00, a midpoint resistance associated with a sibling 'D' target at 1496.25 (see inset).

All day long yesterday, Google featured campaign stories at the top of their news page. Can the editors finding nothing more interesting to talk about? Evidently not.  Assuming the nation's news editors remain in navel-gazing mode as the week draws to a close, we should maintain a bullish bias on stocks nonetheless as they continue to mark time.  This vehicle is working on a pattern that projects to 1497.00, but that's assuming yesterday's 1443.50 low holds as a point 'C'. More likely, especially in a continuing news vacuum, is a feint below 1443.50 to set up a short squeeze either Sunday night or Monday morning. That said, if boredom encroaches, night-owl camouflageurs will find ample speculative entry opportunities on the 5-minute chart.  You can learn to “camouflage trade” yourself.  Click here for a free trial to Rick’s Picks.

Amidst yesterday's asphyxiating tedium, the futures were unable to breach the 1460.50 external that would have alerted us to an impending rally.  A sign of weakness?  I doubt it. More likely is that the Sleazeballs who rig this game lacked even the mote of 'good' news needed to trigger off even a modest short squeeze.  Short-squeezes are how bull markets get from one level to the next, through previous resistance, but with the headlines still obsessing over Romney's horrific, world-ending, campaign destroying, how-could-he-have-said-such-a-thing "47% gaffe," DaBoyz lacked an excuse to pop this vehicle even the couple extra points it would have taken to get bears' attention.  Yesterday's trading suggestion remains valid nonetheless, and I've sketched it hypothetically on the accompanying chart to guide you.  You can learn to "camouflage trade" yourself.  Click here for a free trial to Rick's Picks.

On the 240-minute chart (see inset), the 1265.75 rally target I've flagged had been nearly nine months in coming.  It was exceeded by 2.25 points last Friday, and although I would not have expected even that much of an overshoot from such a perfect but obscure pattern, the 'hit' was close enough for us to infer that the Hidden Pivot target worked. Three days later, the pullback has been noticeably shallow, with 'dueling' impulse legs on the intraday charts indicating that bulls are not about to cede ground easily. If they push above the high today or tomorrow, look for an easy move, for starters, to 1483.75, the HP target of a pattern whose coordinates are shown in purple.  To get long, I'd suggest using a 'b-c' pullback from just above a 1460.50 high that can be found on the 30-minute chart.  It occurred on 9/14 at 3 p.m. EDT.

Buyers had little trouble getting past a compelling Hidden Pivot target at 1462.00 that I'd flagged, implying they will be in a buying mood when the new week begins.  Although index futures are off by a few points early Sunday night, it's probably because DaBoyz are unable to scare even the nervous Nellies into parting with some contracts.  To get long, camouflageurs should use the look-to-the-left peak at 1461.25 that I've highlighted in the chart.  A 'b-c' pullback from just above it would provide the kind of subtle cover we look for to initiate trades where few others are looking.  Notice as well that the 1458.00 'x' trigger of the larger pattern has already been hit, but that the most recent upthrust was not genuinely impulsive because it did not exceed any 'external' peaks.

The pattern shown, with a 1462.00 rally target, is as pretty a one as we're going to see. Since I haven't mentioned it before, it is sufficiently underexposed that I'll recommend shorting with a no-tricks, 1462.00 offer and a 1463.25 stop-loss.  Make no mistake, we're standing in the path of a potential juggernaut, and so we should be prepared to get steam-rollered. But if that happens, we'll at least have a visceral understanding of the power behind this rally. Since a theoretical 1.25 points will be at risk initially, partial profit-taking is advised on a pullback to 1458.25 (1462.00 - 3 x 1.25).  But if the trade is stopped out, you should assume the rally is bound for more daunting resistance at either 1470.00 or 1480.50, two Hidden Pivots flagged here earlier.  As noted at the time, camouflage should be used to short either of those two numbers (although in a pinch you could short the higher with a 1481.25 stop-loss).  We'll plan on taking the short home for the weekend only if the futures close 12 or more points below where the position was initiated.  ______ UPDATE (1:41 p.m. EDT):  Traders who got short at 1462.00 would have experienced only brief pleasure as the futures fell to  1460.00 after making an interim high at 1462.75. However, the position was subsequently stopped out at 1463.00 (enroute to a 1468.00 intraday high), resulting in a $50 loss per contract.  Although ESZ has fallen since, the fact that it exceeded 1462.00 at all -- by a decisive 6 points, in fact -- implies that buyers will be back when nedxt week begins if not sooner.

Yesterday's price action may have felt like six hours of pooch-screwing, but from a Hidden Pivot perspective it strengthened the bullish case by impulsing above a series of 'internal' highs recorded over the last several days.  Two rally targets identified here earlier still beckon at, respectively, 1470.00 and 1480.50 (by all means, short either of these numbers via camouflage, then check here and in the chat room for further guidance), but we should allow for the possibility of even higher prices -- specifically, 1532.00, based on the pattern shown. That would equate to a Dow rally of about 800 points to above 14000, but as you'll see in the Dow chart itself (included today with a fresh DJIA tout), the actual, uninterpolated peak could be even higher.

A 1470.00 target easily discernible on the daily chart continues to serve as a bullish lodestone, but notice that there's a Hidden Pivot resistance of higher degree just above it, at 1480.50, on the weekly chart.  The larger pattern is clear and compelling, suggesting there will be double stopping power within the 10-point range shown.  Until it is reached our bias should be bullish, but don't expect much in the way of camouflage buying opportunities, since the rally is in uncharted territory. We'll look to short aggressively -- via camouflage -- if and when the futures get within pitching-wedge distance of our targets.