E-Mini S&P

Our bottom-fishing bid at 1345.25 missed the intraday low by two ticks, so officially we did nothing.  Keep in mind that this weakness has proceeded from within two points of a 1371.00 Hidden Pivot resistance I'd flagged as a potentially important turning point. Although I qualified this by saying the odds were against our catching the exact high of the now 26-month-old Mother of All Bear Rallies, there is always that chance. In any event, the bounce from a clear target yesterday has tipped the odds mildly bullish for the very near-term.  There are no opportune entry spots that I can detect at the moment, but night owls wanting to get long using "camouflage" should reference the look-to-the-left peak highlighted in the chart. _______ UPDATE (2:43 p.m. EDT):  Today's weakness should produce a tradable low at 1327.25 (stop 1326.65), although getting this brick to actually fall today has proven to be quite a task for sellers.  The fact that it has fallen at all suggests that bearish cyclical forces may be at hurricane strength.

The so-far low Monday night is 1353.50, the exact midpoint pivot of the pattern shown. Using the 5-minute chart, pivoteers can get long using camouflage on any impulsive thrust if the low has not been taken out.  If it's breached, however, you can infer the more downside awaits to at least 1345.25, the midpoint's 'd' sibling. It can be bottom-fished with a stop-loss as tight as three ticks. _______ UPDATE (8:17 p.m. EDT): From a recent high of 1373.50, the futures fell yesterday to an intraday low just two ticks from the 1345.25 forecast.  Officially we did nothing, however, since our bid missed by a hair.

With a 1371.00 rally target coming into focus, let's plan on shorting two contracts there with a stop-loss at 1372.25. As always, this should be viewed as a longshot play with the uptrend in the broad averages now entering its 27th month. Since we're risking 1.25 points theoretical, the first opportunity to take a partial profit would come on a pullback to 1367.25.  However, the remainder of the position could be managed as you please if you feel like swinging for the fences.  I've included a chart that shows how pretty the pattern is now that it is almost fully developed.  Note the use of a one-off 'A', the integrity of which has already been confirmed by a stall a tick from its sibling midpoint, 1359.00. _______ UPDATE (11:07 p.m. EDT):  With the futures in a quite vicious short-squeeze Sunday night attributable to news of bin Laden's death, we got stopped out for small change (i.e. , a theoretical loss of about $62 per contract). Consider it the cost of determing the next stop:  1385.50.  That's a Hidden Pivot, and I'll suggest shorting a single contract there, stop 1386.25.  There's always the chance our stop-loss will prove to have been a smidgen too tight, but my gut feeling is that the 2.50-point overshoot of the target is sufficient to imply the next will be reached.

The 1371.00 rally target given here yesterday remains valid, even if the stall that I'd guaranteed precisely at its sibling midpoint, 1359.00, missed by two ticks. (Friday morning update: Now missed by one tick, since today's high so far is 1358.75.)  I've checked the 3-minute chart in search of 'camo' opportunities for night owls, but as of around 7:20 p.m. there didn't appear to be enough subtlety in the upthrusts to give us the edge we typically look for.

This Mother of All Bear Rallies being what it is, it's not rocket science to forecast higher prices every day, week after week, month after month, nor is it even slightly difficult to identify Hidden Pivot targets that tend to catch the exact peak of nearly every short- and intermediate-term rally that occurs.  But to be candid, it is getting very bor-ing, especially since the only big winners in this game are buy-and-hold idiots who have blithely stayed on board since 2009. So where is the stupid rally headed today? Why, to 1371.00, precisely, is where! A stall could happen at 1359.00 -- precisely! -- but I'll leave it to you to make hay with these numbers. Today's ES chart expropriates a line from that academician of eternal notoriety, Prof. Irving Fisher,

Yesterday's mechanical rally fell 1.75 points shy of the 1347.75 Hidden Pivot we've been using as a target, but because it surpassed mid-February's watershed high, creating a new impulse leg of daily-chart degree, the short-term implications are bullish.  Even so, I am raising the yellow flag as I'd said I would, since, at these heights, complacency is apt to be approaching an epochal peak.  Under the circumstances, the bear could surprise us by sauntering out of his den before the futures have achieved some 'D' rally target that has commandeered our attention. If so, you will see a downtrending a-b-c from that high that reaches or exceeds its 'd' target. The first instance where this could actually occur is shown on the accompanying chart, so night owls should pay very close attention to price action at the target.  If, on the other hand, the futures turn higher without having corrected to 'd', that would imply that the bullish status quo -- soon to enter its 27th month -- still obtains.

Early Tuesday morning, the futures, in navel-gazing mode, were extending the asphyxiating monotony of the last two sessions. It is part of a topping process -- or perhaps an accumulation -- that has been going on since late January.  Which? It seems utterly implausible that stocks could fall as long as QE2 holds sway.  Perhaps, in time-honored, contrarian fashion, we should therefore brace for exactly that?  For the moment, however, there is little to do unless you are scalp-trading off the three-minute bars.  Even camouflage can be expected to produce little more than nickels and dimes of profit right now.  A 1347.75 (midpoint: 1319.00) target first broached here eons ago remains valid, but anyone too bored to care can be forgiven for snoozing through the rally if it comes.

Although we've been using a minor Hidden Pivot at 1347.75 as a minimum rally target, we'll want to be extra cautious about any feint above recent highs, since that is where bulls will be at their most complacent and vulnerable. If the futures simply fall Monday morning without having exceeded 1334.00 Sunday night, you can try tightly-stopped bottom-fishing at 1325.00 (30-minute, A=1337.75).  Please note, however, that they would be signaling more weakness to at least 1319.00, the midpoint pivot of the pattern shown, if the stop is hit.

A Hidden Pivot at 1347.75 (see inset) looks like the next stop for this Ship of Fools, and it became more likely when the futures spiked through the target's midpoint sibling at 1319.00.  Shortly after midnight there were no useful coordinates to use for camouflage because the June contract flatlined after opening the night session on a short-squeezed gap.