E-Mini S&P

Index futures were up only slightly around 1 a.m. EDT, suggesting DaBoyz were distributing rather than accumulating, but that they were not enjoying much success.  If the broad averages fall anew, I've provided a minimum downside target for the E-Mini S&P that looks likely to yield a tradable bounce.

Friday's low occurred in the tight range between two Hidden Pivots I'd flagged. I had to redraw the chart with 120-minute bars to see why. As it happens, there's a Hidden Pivot midpoint at 1294.75, a single tick from the actual low at 1294.50. The bounce from it was nasty if you were short, but now we at least 'know' that a breach of the pivot will consign the futures to more slippage down to at least 1273.50, its 'D' sibling. There is also the 1276.50 'D' of the larger pattern, so a strong bounce from either number, or from the tight spread between them, is extremely likely if the futures get down there (as seems likely). Which they will.

A 1291.75 downside target given here yesterday remains viable, although we might see a bounce from a lesser hidden support at 1297.50.  The higher number looks like the better place to try bottom-fishing with a tight stop, since the lower closely coincides with a key low at 1290.25 recorded on April 18. If that last number is breached on a closing basis it would imply that the selloff from the May 2 peak is picking up steam and is likely to continue into next week. Minimum downside target thereafter: 1276.50.

While it would be nice to think that yesterday was the beginning of the Big One, the selloff has yet to exceed even a single prior low on the daily chart, let alone the two we require to signal a bearish impulse leg.  Still, because there was no truly bad news to spook the market, the weakness may indeed represent an actual tone change on otherwise tone-deaf Wall Street.  In any case, the futures need fall only another 23 points, to 1290.00, to damage the daily chart; or 34 more points to do some real damage, since that would add a third low at 1279.00 to our count.  Most immediately, however, my minimum downside target is 1291.75.

If the E-Mini S&Ps achieve their newest rally target, it would imply a Dow rally of more than 300 points.  Our short-term bias will therefore be bullish unless the broad averages signal otherwise on charts of hourly degree.  As always, if the broad averages reach our bullish targets, we'll short them with very tight stops.

Okay, don't rub it in:  No guts, no glory. We cashed out a small short position yesterday for a theoretical gain of around $1300 (not $600, as erroneously given earlier).  I'd originally considered holding out for a profit of at least $5000 per contract, but discretion has trumped valor, possibly sparing us the pain of watching all of our gains go up in smoke just so that we could tell our grandchildren that we shorted THE Top.  We shorted "a" top, however, and we aim to do it again...and again...and again, until such time as we nail the actual Mother of All Bear Rally Tops.  How much have we risked trying?  That's a question you can ask in the chat room if you're skeptical. In the meantime, we may see some good opportunities to get long in the days ahead, since the futures look bound for at least 1387.50, a 40-point rally from current levels, if they can close above 1346.00. They were wafting above that midpoint pivot in after-hours trading, but because this also put them above May 19's marquee high at 1345.50, subtle opportunities for a "camouflage" entry were going to be tough to find nil.  Incidentally, if you don’t subscribe to Rick’s Picks but would like to know more about the proprietary camouflage trading technique that we use to keep entry risk to a bare minimum, click here for information about the Hidden Pivot Webinar in late June.  You could also take a free week’s trial subscription that will give you access not only to detailed trading recommendations each day, but to a 24/7 chat room that draws experienced traders from all over the world.

As a result of Friday's opening trade, initiated a single tick off the intraday high, we are short two contracts with a blended cost basis of 1347.00. Use a 1336.25 stop for now -- and take consolation in knowing we can short this little sonofabitch whenever we please without getting hurt, just as we've been doing repeatedly for many months in anticipation of a perhaps inevitable market crash.  FYI, although the 1336.25 print that would take us out of the position would fall just shy of creating a new, bullish impulse leg on the hourly chart, because it would do so on lesser chart, I'm using it as a hair-trigger exit signal. If my hunch is correct, any rally that gets past 1336.25 will get past the more obvious one at 1440.25 too.  If you don't subscribe to Rick's Picks but would like to know how we identify price targets and attempt to profit even when we are "wrong" about the trend, click here for information about the Hidden Pivot Webinar in late June.  You could also take a free week's trial subscription that will give you access not only to detailed trading recommendations each day, but to a 24/7 chat room that draws experienced traders from all over the world. _______ UPDATE (2:21 a.m. EDT):  We exited the trade on the stop, booking a theoretical gain of $500 on the trade.  It would appear that DaBoyz have shorts -- though not us -- on the ropes early Tuesday morning, but if they can push this hoax a bit higher -- above 1346.00 on a closing basis, to be specific -- we can look forward to shorting again at 1387.50, a Hidden Pivot that would become an even-odds bet at that point. More immediately, night owls proficient at using 'camouflage'

We remain short, effectively, from 1363.00, and are shooting for a gain of at least $5000 per contract. I am going to suggest covering the short, however, if the futures poke above 1334.25 today.  That is where I would place a stop-loss on a scalp-short at a lesser Hidden Pivot resistance at 1333.50.  This was a tough decision, since I still think there's a good chance the 1358.25 pivot where we initiated the position will survive. However, because holiday seasonality will give DaScumballs a great opportunity to ream bears a new orifice, I'd rather come away from the trade with a $700 or so gain per contract than see all our gains get taken away.  If I had it to do over again, I'd have covered at the 1303.25 target -- which was all but certain to produce a big bounce -- and re-shorted the rally.  If you want to hang tough for a few more points, I'll suggest covering the short on a print above  1340.25, an important peak recorded May 20 on the way down.  That's where trouble for shorts would really begin. _______ UPDATE (12:27 pm. EDT): Half of any shorts from 1333.50 should have been covered, since the so-far 3.50-point pullback from our entry price is more than three times the 0.75 points we risked on the initial stop-loss.   Keep a fixed stop for now at 1334.25. My strong gut feeling is that DaBoyz are not going to waste a pre-Memorial-Weekend-Friday opportunity to squeeze shorts. _______ UPDATE (1:05 p.m. EDT):  With about an hour to go, the three-tick stop-loss is holding (!), so we are now short one contract from (effectively) 1363.00, and another (effectively) from 1335.75.  For now, raise the 1334.25 stop-loss on both to 1340.50. Don't be surprised if DaScumballs, abetted by a

We are short from 1363.00, shooting for a gain of at least $5000 per contract. That means we'll let this rally run against us, notwithstanding that we came within a point of predicting the low of the 55-point selloff that produced yesterday's bottom. At the close, the futures appeared headed to 1333.50, subject to midpoint resistance at 1324.75.  If you have no position, you can short the higher number with a three-tick stop-loss.