E-Mini S&P

As of around midnight, Tuesday night's lows have fallen within three ticks of an 1185.75 midpoint support whose breach would be telegraphing more weakness over the near term to at least 1175.50, its 'd' sibling.  The bounce thus far is ostensibly bullish, but it will have to go a bit further to provide us with the kind of easy entry opportunity that we look for.  Specifically, traders should use the 1190.50 peak-let shown in the chart for camouflage, provided the thrust that exceeds it slightly retraces to set up a C-D follow-through with a conventional 'x' entry point.  All of this is sketched out in the chart, so check it out.  Want to learn how to identify and use "camouflage' trading set-ups yourself in just six hours? Click here for information about the upcoming Hidden Pivot Webinar. _______ UPDATE (10:34 a.m. EDT):  A pattern very similar to the one shown in the chart played out overnight, generating a C-D rally that got within two ticks of its 1199.25 target. The 'buy' signal came at around 5 a.m. for an entry at 1190.75.  In theory, the trade could have produced a gain of as much as $400 per contract if you exited at the target.  The futures have moved higher since to a so-far peak at 1206.75, so if you held onto any part of the original position, you'd be reaping further gains.  The 1227.25 target given here earlier remains valid.

Who would have imagined a dead cat could bounce with such ferocity?  Anyone who has ever observed a bear market in action, is who!  And you had better get used to it, since this is exactly the way bear markets behave.  One more thing:  Although we "know" the Dow is going many thousands of points lower eventually, that doesn't mean it will be easy to profit from the wild swings that are gong to take the broad averages to Mindanao depths. For now, however, let's take stock of this bull phase by sticking with the 1227.25 target given here earlier.  We can always take comfort in knowing that the bear, no matter how devious, is incapable of fooling us as long as we stay focused on impulse legs of minor degree going.  Click here if you want to learn how to do exactly that without my help.  Remember, you're just six hours from being able to kiss your stock-market guru good-bye.  Traders: As we know, the E-Minis could turn lower with a vengeance without having reached the target.  Although camouflage shorts from within a point or two of 1227.25 will be easiest, I'll suggest looking for the turn from here on up if you want to be certain of getting on board.

The rally target at 1227.75 that was in play in Friday is still in play. As I'd noted earlier, choppy action has brought the futures to within two ticks of the 1187.25 midpoint associated with that target. The fact that that midpoint was precisely achieved by the day's two failed rallies suggests that the 1227.75 target will be useful to us.  However, because the target is by now perhaps too well "advertised," I'd suggest using camouflage on the 15m chart or less if you plan on using this high-odds Hidden Pivot to get short.  In the meantime, because there is 50 points of implied upside if and when the futures break decisively above the midpoint, using camo tactics to get long is strongly advised. Initiating bull trades near these levels may be easiest for Sunday night-owls, since the September contract created the kind of tedious chop on Friday that tends to leave our trading competitors waiting for "something" to happen. Our specialty, of course, is using impulse legs to alert us to the very first sign that something is about to happen.  Want to learn to use the Camouflage Trading  Method yourself? Click here for information about the October 5-6 Hidden Pivot Webinar.

Viewed on the hourly chart, yesterday's rally wasn't as powerful as news reports may have led many to believe. For a close-up look at a raging bull with a chicken's heart, check out today's E-Mini S&P tout.

Amazing how far the futures can rally without doing anything impressive.  Yesterday's technically feeble headline-grabber topped out three ticks from the target shown, apparently intimidated by the not-especially-daunting peak at 1189.00 noted in the chart.  DaBoyz may be able to squeeze the futures above it today, but the fact that it will have taken a second try and a running start is not exactly the stuff of which powerful recoveries are made. _______ UPDATE (9:50 a.m. EDT): Minutes after the opening, the futures have topped within a point of an 1187.25 HIdden Pivot midpoint that is associated with a 'D' target at 1227.75. (5m, A=1103.00 on 8/11 at 8:35 a.m. EDT). Since this peak has refreshed the bullish impulse by exceeding yesterday's high, my bias is bullish at the moment.

After-hours trading has pushed the futures slightly above a look-to-the-left peak at 1178.25, creating a possible opportunity to get long via camouflage. A proper pullback would need to come down to at least 1146.00, but if and when this occurs, Pivoteers should look to get long on a conventional 'X' trigger.  In the accompanying chart, I've sketched out a hypothetical scenario for your further guidance.

Since there are no big patterns sufficiently compelling to measure and predict this selloff, I'll suggest using the lesser charts and taking the down-legs one at a time. Most immediately, that would imply just a bit more short-term weakness, to at least 1095.75, in after-hours trading. That number can be bottom-fished with a stop-loss as tight as 1094.75, but you may be able to reduce the risk even further by using camouflage to get aboard on the first abc rally pattern from very near the target. As always, an easy breach of the support would imply there is weakness, possibly considerable, remaining to be spent. ______ UPDATE (2:29 a.m. EDT): DaBoyz are taking no prisoners tonight! They hauled the futures down the equivalent of 300 Dow points on thin volume after the close, then goosed them into positive territory just moments ago for the first time tonight. Let's puts Hidden Pivots aside for the moment and focus on two short-squeeze targets that would represent a 50% retracement of the collapse from the July 22 high, and a 61.8% retracement. The targets lie at, respectively, 1212.50 and 1244.50.

Regardless of how high the futures bounce during what promises to be a memorable day, the lows will not avoid breaching a third external low on the daily chart that had been spared on Friday.  We'll have to be extremely careful hunting for a spot to get short when the impulse leg from the July 22 high corrects in B-C fashion. But most immediately, and for purposes of bottom-fishing, I'd suggest using the 140-minute chart to identify an intraday low 'p' or 'd' suitable for camouflage. There are no patterns or targets that are especially striking right now, but even the "bad" ones will do if your entry risk is allocated on the three-minute chart.

If the 1184.75 Hidden Pivot shown in the chart fails to temporarily arrest the decline, look for more slippage to as low as 1154.25, or perhaps 1146.75, over the near term.  Camouflage is essential regardless of whether you're on the long side or the short, but if you attempt the latter, because the downtrend holds every trader in thrall by now, your best bet will likely be to initiate on subtle breakdown from sideways moves.