E-Mini S&P

Ponder a month's worth of hourly bars and you can see how trying to surf a wave is an exercise in futility. That's notwithstanding the fact that the pattern shown projects to 1470.75, the equivalent of a 500-point Dow rally. Since it's impossible to guess what sort of news could trigger off a short-squeeze of that magnitude, the only way we might hope to spot it as it leaves the launching pad is by looking for impulsive thrusts on charts of lesser degree.  In that regard, the subtlest 'external' peak I can offer for getting long via camouflage is the one at 1414.50 shown in the chart.  A 'b-c' pullback from within a tick or two above it would create the kind of subtle opportunity that's worth waiting for.  Please let me know in the chat room if you fill so that I can establish a tracking position for your further guidance.  _______ UPDATE (September 6, 10:50 a.m. EDT):  Today's rabid short-squeeze -- propelled, it would appear, by jobs news -- is so vicious as to have offered no easy entry opportunities, camouflage or otherwise.  It is an apparent installment on the 1470.00 target (adjusted slightly after a recalculation, 60m: A=1349.26 on 8/2; B=1424.75 on 8/21; and C=1394.50 on 9/4) given above, but we should expect a stall at exactly 1432.25, the pattern's p midpoint, to confirm.)  ________ UPDATE (2:21 .m. EDT):  Big surprise...NOT!  The futures have in fact topped today at exactly 1432.25. Since this occurred in the final moments of the regular session, however, I warned in the chat room against shorting the nasty little sonofabitch.  The good news is that the rally's stall precisely at the Hidden Pivot midpoint has left zero doubt about the validity of its 1470.00 'D' sibling.  Please note, however, that a follow-though

It's early Thursday morning and the futures were playing toe-sies with the 1401.25 midpoint support of the pattern shown.  It's 'D' sibling at 1386.25 will be in play as a minimum downside objective if 'p' is exceeded by perhaps 1.00-1.50 points.  The 15 points of implied downside makes this one well worth shorting, but you'll need to figure your own way in, since the stock market is apt to be squirrelly as it awaits a supposedly important speech by Helicopter Ben on Friday ahead of the three-day weekend. The 'D' target can be bottom-fished via camouflage, but the pattern looks fetching enough that you could try it with a 1386.50 bid and a stop-loss as tight as 1385.50. _______ UPDATE (August 31. 12:40 a.m. EDT): Yesterday's mincing steps lower left my forecast and advice for Thursday (see above) unchanged.  It should be interesting to see whether the Hidden Pivot at 1386.25 stops whatever hysteria The 'Nank is able to incite in its tracks.

Yesterday's low took out the 1404.50 midpoint support of the pattern shown, hinting of more weakness to come.  Assuming nothing happens to change traders' wishy-washy mood overnight, we might expect the downtrend to continue to 1393.25, the 'D' target of the pattern.  You can bottom-fish there, but only using camouflage, since the support lies in the thick of a bunch of "structural' lows made between August 5-13.  Click here for a free trial subscription that will allow you access to all features and services at Rick’s Picks, including real-time updates and a chat room that draws experienced traders from around the world 24/7.

The by-the-numbers follow-through yesterday to Wednesday's A-B decline came within two ticks of an obvious D target at 1397.50. This number was flagged during the impromptu online session, although not with any great enthusiasm. The support lacked appeal not only for its obviousness, but also because it roughly coincided with some lows from last week.  There are a bunch more to the left of them that go back to August 3, but my gut feeling is that sellers will breach all of them today, creating an impressive bearish impulse leg that is a logical consequence of Tuesday's nasty bull trap. If the week ends with a selloff is as steep as Thursday's, it would test the support of a midpoint pivot at 1393.00, and if any lower, at D=1383.00.  This being a Friday, trading these two numbers (and that's assuming C=1403.00 survives) will have to be catch-as-catch-can.

The futures are in a high-risk zone, having broken out above March 27's watershed high, but we can be cool with it as long as we play by the rules. This means first of all that we should require a pullback to at least 1401.00 (daily chart, k=1387.50 on 7/30; A=1349.25, B=1424.75)  before inferring that the futures are ready to take another leap, giant or otherwise. More immediately, camouflageurs should seek entry opportunities on the 15-minute chart. The nearest and subtlest of them would come on a print slightly exceeding a small 'external' peak at 1415.25 recorded on August 21.

Staying short this little sonofabitch, even off  perfectly timed entries, has proven so difficult lately that being short is probably what we should want to be. Even if not, and assuming a topping pattern is under way that could take yet more weeks to complete, we should be prepared for increasingly vicious swings in both directions. Most immediately, yesterday's dive remains a work in progress, with a 1405.00 midpoint support and, if exceeded, a 1396.75 'D' target. However, without some more distributive chop Tuesday night, I hesitate to suggest bottom-fishing either number, even via camouflage. Alternatively, there being no 'external' lows to leverage for purposes of getting short, I'm going to suggest remaining on the sidelines for now.

I'm providing tracking guidance for four contracts shorted yesterday at 1417.75, since subscribers reported fills at that price, a Hidden Pivot midpoint resistance that had been noted in Monday's ES tout. Assuming two contracts were covered at 1410.00 based on an instruction sent out intraday, the effective cost basis for the two that remain is 1424.75. For now, they should be tied to a stop-loss at 1417.50, day order, but with an o-c-o (one-cancels-other) order to cover one at 1405.25.  Despite this trading position, my bias remain bullish, with a 1480.50 target.  Night owls (possibly trading 'against the box') can use a 1412.25 bid, stop 1411.50, to bottom-fish the pattern shown. If it fills, I'll provide tracking guidance. _______ UPDATE (11:32 a.m. EDT):  We covered the short for a paper profit of $360 per contract. Getting long at 1411.25 proved impossible, however, since the futures went no lower than 1413.75 overnight before getting short-squeezed on the opening to a so-far high of 1424.75.

We're using a 1480.50 rally target, but with a nervous eye on the fire escape. Most immediately, Friday's bullish fillip looks bound for 1424.50, predicated on a move through its 'p' Hidden Pivot sibling at 1417.75.  The week's high came within a point of that resistance, but if Sunday night's opening should rise above it, especially on a gap, consider 1424.50 a lead-pipe cinch. Camouflageurs searching for a way to get long should stick with the three-minute chart, where some good opportunities were signaled on Friday.  If you're keen on shorting 1424.50 without camouflage, I'd suggest a 1425.75 stop-loss. The target will remain valid as long as the 1410.75 point 'C' shown in the chart endures.  Your shorting odds will be best if the target is hit straightaway, especially on a lunatic gap or breakaway rally Sunday night.  ______ UPDATE (10:26 a.m. EDT): The futures have plunged eight points, or $400 per contract, after topping a single tick from the 1417.75 midpoint resistance noted above. If at least two subscribers report getting short, I'll establish a tracking position for your further guidance.  For now, though, cover half the position near 1410. ______ FURTHER UPDATE (10:56 a.m. EDT): Since some subscribers have reported shorting 1417.75 and covering half at 1410.00, I'll track  a position that is short two contracts (or multiple thereof) with a profit-adjusted cost basis of 1424.75.  Tie them both to a stop-loss at 1417.50, day order, but with an o-c-o (one-cancels-other) order to cover one at 1405.25.

Fun while it lasted, eh?  We'll short the little sonofabitch again, for sure -- just not today, with the week drawing to a presumably buoyant close.  If I were to interpret the accompanying chart (see inset) as I would Gold's, there'd be no avoiding the conclusion that the September E-Mini S&P is going to 1480.50 -- equivalent to a 500-point Dow rally from these levels.  The good news is that Mr Market will  not possibly be able to avoid serving us a juicy short -- juicier than we're used to, anyway -- somewhere near the target:  the pattern is simply too clear to produce any other outcome.  We'll play this one from the long side while we bide our time, but for today I'll leave it to you to find a way in that suits your style.   With no more 'external' peaks to reference, finding camouflage cover is  apt to be more difficult, although certainly not impossible.