E-Mini S&P

The 3425.25 rally target shown in the chart looks potentially useful -- not only as a minimum upside objective for trading from the long side, but as place to attempt shorting either with a tight stop-loss or an rABC pattern of lesser degree. Note that the futures took a strong bounce Friday from the red line, the pattern's midpoint pivot. In retrospect, we can see that a bid there would have produced a quick gain of as much as $850 per contract. Is there a rule we can formulate that would make it easier to exploit such opportunities? Let me try, as follows: Attempt a 'mechanical' buy at the red line if an earlier pullback from our proprietary 'sweet spot' fails to come down to the green line where we typically initiate the trade.  As always, the stop-loss on such trades is equal to a third of the differential between the entry price and the D target. I should also mention that the C-D follow-through leg, or at least what exists of it so far, did not exactly blow past p=3364.38. This implies that a move to D is not quite a done deal, even if the pattern looks strong enough to get the futures there. _______ UPDATE (Feb 19, 7:12 p.m. EST): The 3425.25 target billboarded above has served us well. Here's a smaller pattern with a lesser target at 3415.00 that can be used on Thursday to improve your odds of engaging profitably with the futures, whether long or short.

Not only are dips being bought reflexively and with ostentatious zeal, those who are doing the buying are the same carnies who have in fact engineered the dips. Although Thursday morning's dip went a little lower than I'd expected before the sleazeballs predictably turned things around, what we should have observed is that no one on Wall Street has any fear whatsoever that coronavirus will endanger the global economy. It is just a useful 'story' where they are concerned, and it is being employed to manipulate stocks lower whenever portfolio managers are in the mood for bargain hunting. They exhausted sellers around 5 a.m. on Thursday, and it was up...up...up for the rest of the day. Now, if and when short-covering decisively breaches the 3381.63 midpoint Hidden Pivot where the rally stalled, the 3414.75 target shown in the chart will be in play as a minimum upside objective for the near term. A pullback to the green line (3365.00) first would trip a 'mechanical' buy signal, but I am not enthusiastically recommending a play because the correction will not have come from our sweet spot.

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.