E-Mini S&P

I put out a 'mechanical' trade in the chat room, a buy at 3363.00 that stopped out 3 1/2 hours later for a loss of $400 per contract. It did so after narrowly failing to achieve a profitable exit target at 3371.00. The set-up was enticing, but because it failed we can only infer that there is more weakness yet to come.  Bulls got off to a strong start, seemingly oblivious to the potentially disruptive effects of coronavirus on the global economy.  In retrospect, the strength seen early in the session seems to have been a show of bravado. We'll step aside for now, but be ready to act if the futures signal opportunity. My hunch is that it will be to the downside, especially since the intraday high occurred just above a potentially important Hidden Pivot target at 3369.25 that I've been drum-rolling since February 3. Meanwhile, here's a smaller chart to stay closely oriented to the trend. Weakness breaching the 3345.25 target shown would signal that bears are about to go on the offensive. ______ UPDATE (Feb 12, 12:25 a.m. EST): The futures are in a mild short-squeeze on zero volume in the dead of night. This has negated the bearish pattern shown in the chart, but I don't trust the rally and doubt that it will get very far. _______ UPDATE (Feb 12, 9:07 p.m.):  The futures plummeted nearly 20 points in mere minutes early this evening. Go figure! Here's a chart to help you make hay from their senseless histrionics.

Today's fist-pump through a clear midpoint resistance at 3291.00 implies the rally will continue at least to the pattern's D target at 3369.25. Your trading bias should be bullish in the meantime, although rABC entry set-ups may be difficult to come by if the trend goes uncorrected on the lesser charts as it did today. Since all vehicles seem to be pulling back from p2 these days, you can use the one at 3330.13 to get short, albeit probably not for long. Alternatively, a pullback to x=3251.88 would trigger a mechanical buy signal, stop 3212.50. The 39-point entry risk cries out for an entry set-up using a pattern of much smaller degree. Ask in the Trading Room for guidance if the opportunity gels. _______ UPDATE (Feb 5, 9:09 p.m. EST): Here's a chart with a lesser target at 3352.00 that has been slow in coming. The one at 3369.25 remains viable regardless. _______ UPDATE (Feb 8, 12:25 p.m.): I've hung out the yellow flag, since the futures should not have died last week a pathetic couple of inches from the 3369.25 target. The bullish argument would hold that they are simply consolidating for a thrust that will turn the target into suet. If that proves to be the case, we'll have opportunities to buy ahead of the move and to limit risk to bupkus. For now, though, let's hang back. I've recommended a short in SPX (instructions will appear in the touts list Sunday evening), but the index would have to fall 129 points to trigger it. _______ UPDATE (Feb 10, 9:04 p.m.): The futures were lunaticking higher Monday night, inexorably bound for the 3369.25 target flagged above. It's clarity is adamantine, suggesting it will repel the charge as though it were granite, but who knows?  The futures will probably

Shorts were on the ropes the whole day and getting no relief Tuesday evening. The rally during the regular session tripped a theoretical 'buy' signal at the green line (3272.25) that portends more upside to at least p=3311.25. I'll recommend shorting there, presumably with an rABC pattern on a lesser chart, but only if you've caught a profitable piece of the action on the way up. As always, an easy move through the midpoint resistance would shorten the odds of more upside to D -- in this case, 3389.50. That would be quite a rally, equivalent to about 1000 points in the Dow Industrials. They'd be trading just below 30,000 at that point, presumably drawn as if magnetized toward a historical milestone. _______ UPDATE (Jan 29, 9:14 p.m.): Bulls couldn't get it going for a rare change, a failure that has opened a path down to p=3240.88 (click here to see chart). Traders can try bottom-fishing there rABC-style, with a suggested point 'A' at 3270.25 (1/29 at 10/20 a.m.). An easy breach of this Hidden Pivot support would portend more downside to as low as D=3189.00. ______ UPDATE (Jan 20, 8:43 a.m.): The 3240.88 target given above nailed the low of a 31-point dive overnight within a point, allowing subscribers to make hay -- as much as $900 per contract -- on the subsequent 18-point bounce.  And so they evidently did, based on reports this morning from several happy campers in the chat room. Here's a chart that shows the futures bouncing precisely from the targeted low. ______ UPDATE (Jan 30, 4:29 p.m.): The bounce continued from the tradeable low identified above, attracting ferocious short-covering in the final hour.  This left bears on the ropes and bleeding badly. Their panic seems all but certain to drive the futures to at

I'd drum-rolled a 3348.75 bull market target loud enough and long enough that last week's sharp reversal from a high that fell 11 points shy of it was more than a little disappointing.  It was also odd. The ABCD pattern from which the target was extrapolated is so clear and compelling that we might have expected a tradeable top to occur within no more than a point or two of 3348.75. But 11 points below it?  The miss amounted to just 0.3%, but that's as good as a mile for those who were planning to get short when the target was reached.  So how do we interpret the failure of buyers to reach this important price objective, one that has been nearly four months in coming? Very simply, as incipient weakness. Accordingly, we should watch for the downtrend to develop momentum in the week ahead and possibly longer.  This is a novel perspective, since the bull market has routinely been exceeding our rally targets for years. Each time this occurred, we assumed -- correctly, as it happened -- that still higher prices lay ahead.  So now what? A rally back up to the target early next week would negate the bearish implications just noted, but my gut feeling is that this is unlikely to occur. If the downtrend instead gets legs, this will be telegraphed by minor abc downtrends that start to exceed their midpoint supports and perhaps even their 'd' targets. Another way to say this is that down-legs may start acting impulsive rather than corrective. This hasn't happened in a long time, but we should be alert to its meaning if it starts happening now. _______ UPDATE (Jan 27, 9:54 p.m. EST): The pattern shown in this chart is gnarly but serviceable, implying you could bottom-fish p=3226.50 gingerly

Identifying Hidden Pivot targets that work precisely can sometimes be as much art as science, but the one shown, at 3348.75, promises to put a top on the historical bull run launched from 2882 in October. Two other rally targets that I broached here earlier will still be in play: 3326.25, and 3373.50. I have taken them out of boldface to make clear that you should favor 3348.75 as a place to get short, presumably with an rABC set-up on a chart of lesser degree. Until the target is reached, however, you should trade with a bullish bias, albeit a cautious one, as 3326.25 is closely approached. I seldom recommend 'mechanical' buys on pullbacks to p2, which in this case lies at 3279.31. However, I will green-light the trade, stop 3256.00, for those of you who are familiar with the old-style mechanical set-up. Recall that activating the bid in this gambit requires a series of bars with white space between the low of the bars and p2. The gist of it is a lazy, sideways drift above p2 before the trade triggers. I am suggesting this alternative, or even a mechanical bid at the red line (p), stop 3163.50, because the rally has seemed too strong to favor us with a pullback to the green line (x) where we typically do mechanical trades. To avoid queering the target by advertising it too aggressively, I've made this tout viewable only to paying subscribers. ______ UPDATE (Jan 24, 10:29 p.m. EST): The 3373.50 target noted above looks too good to be treated cavalierly. Here's the chart, which shows why you can count on it if 3348.75 gives way easily. Pivoteers may notice that I've passed up a nice-looking one-off 'A', but I am not unmindful of it. It corresponds to a 'D'

Reliable patterns have been hard to come by because the rally from early December's low produced no distinctive corrections. I've settled on one that's good enough for government work, however, in order to extrapolate the 3326.25 target shown. The midpoint pivot at 3253.63 can serve in the meantime as a minimum upside objective, since the futures have already tripped a theoretical buy signal at x=3217.31. I've noted in The Morning Line that although we cannot know for certain whether Iran's attack on a U.S. airbase in Iraq will trigger all-out war, it seems unlikely, especially given that the missiles were not targeted on the military base housing most Americans. The attack has temporarily unnerved traders, but look for day-session pros to handle the excitement with more cool. _____ UPDATE (Jan 8, 8:57 p.m.): A powerful rally has unfolded as predicted, adding a whopping 87 points to Tuesday's low. The 3326.25 target is well in play and a good bet to be reached, given the strong initial thrust through p=3253.63. Additional resistance could be felt at p2=3289.94. _______ UPDATE (Jan 12, 10:19 p.m.) Last week's stab brought the futures to within three points of p2=3289.94. If a second-wind rally pops through it in the days ahead, that will make more upside to at least 3326.00 more likely. ______ UPDATE (Jan 13, 5:14 p.m.): The futures have poked slightly above p2 in after-hours trading, but they'll need to break free of its gravity, meaning exceed it by 3-5 points intraday, to make 3326.25 an odds-on bet. A two-day close above it would work, too. _______ UPDATE (Jan 14, 10:19 p.m.):  After today's extremely tiresome price action, let's raise the bar, stipulating that the futures trade a least 10 points above p2=3289.94 before we ratchet up our bullish bias for day trading. ______

Index futures have opened Sunday night with subdued selling that has yet to test Friday's lows. This suggests there are more bargain hunters around at the moment than panic-stricken sellers. However, DaBoyz are surely distributing as much stock as they can in order to handle the onslaught of market-order 'sells' that are likely to materialize at the opening. As always, a decisive breach of the midpoint pivot, where selling has currently stalled, will imply more downside over the near term to at least D=3189.50. Any bounce from near that number should be regarded as a possible 'counterintuitive' buying opportunity. _______ UPDATE (Jan 6, 10:19 p.m. EST): Short-covering intensified as the day wore on and was continuing into the night session. The point 'A' low of the pattern shown is weak, but it's all we've got right now to project a target at 3310.50. Let's see first how buyers do at the midpoint resistance, p=3258.63, my minimum upside projection for the near term, before we try to judge how likely 3310.50 is to be achieved, and how soon.

So what does your permabear editor see next for the bull market that won't die? For starters, an S&P run-up to the 3348.75 target of the pattern shown. If and when it is reached -- a very good bet, in my estimation -- the Dow Industrials, currently trading for around 28,538, would be at 30,000. The whys and wherefors are irrelevant, since the technical signs are clear enough. Although bulls did not exactly impale the midpoint resistance at 3209.88, they got well past it last week and seem to have turned it from resistance into support. This suggests that we should use p2=3279.31 as a minimum upside projection for the near term, meaning mid-to-late January or so. _______ UPDATE (Jan 2, 6:48 p.m. EST): What the heck could I have been thinking when I wrote above that this hot-air balloon would take another week or two to waft up to 3279.3? Looks more like it will happen by Monday, if not sooner.

My 3229.75 target precisely contained last week's rally, but we shouldn't kid ourselves that it will turn out to be the Mother of All Tops. Assuming buyers make short work of this Hidden Pivot resistance, the next stop on the path to infinity would be the 3252.75 target shown.  Notice that the pattern's point 'A' low is just a little pisher and therefore unlikely to produce an important 'D' high. Sliding 'A' down to the much more compelling A2 would yield a weightier 3348.75 with a midpoint resistance at 3209.88 that was decisively exceeded last week. I mention it just to be on record with a seemingly absurd -- at least for this permabear -- prediction. My gut feeling is that we'll eventually see the E-Minis trading at those levels, implying Trump actually is a shoe-in for reelection. Paradoxically, the only thing that could derail him would be a bear market. Even then, it's difficult to imagine any of the Democrats, including Hillary, beating him. _______ UPDATE (Dec 26, 12:38 a.m. EST): I expect the 3252.75 resistance noted above to show stopping power, potentially short-able, but if the futures slide past it the next resistance, unnoted above, would be at 3260.50. This is the secondary (p2) Hidden Pivot of a major ABCD pattern where 0n the daily chart A=2882.00 on 10/10. _______ UPDATE (Dec 29, 8:55 p.m.): The 3252.75 target was exceeded, but only by 1.25 points. A short from my number with a tight stop could have been worth as much as $800 per contract so far.  Anyone on board? I haven't established a tracking position because no subscriber mentioned it. _______ UPDATE (Dec 30, 5:21 p.m.): This pattern produced an rABC trade Monday from p=3128.88 that could have been worth as much as $350 per contract. The 3205.75