E-Mini S&P

Some subscribers evidently tried to hang onto shorts from 1304.75, but, much as we have come to expect, the little sonofabitch simply wouldn't go down. It did pull back some, though, allowing partial-profit taking that by now should be automatic any time we are short the broad averages and even slightly ahead of the game.  As of around 8:15 p.m. EDT, the rally had become a full-blown short-squeeze, spiking to as high as 1314.00 on one particularly vicious bar. That is an exact Hidden Pivot on the hourly chart (A=1261.50, B=1296.50), so it could mark a short-term top.  If there's another thrust, though, look for 1317.75, or perhaps even 1334.25 if the lower resistance fails.

Looks like traders are scampering up the Wall of Worry once again. The market had a dozen good reasons to sell off yesterday -- and it did, at least for a while; but when the dust settled, easy money had once again had its way.  Each time the E-Mini S&P pokes its greasy little snout above structural resistance, the sellers -- mostly corporate insiders, if we are to believe what we read -- seem to melt away. Now, a Hidden Pivot resistance at 1304.75 is the likely objective of the next thrust. Since its sibling midpoint at 1292.00 has already been exceeded by four points, this move should be regarded as an odds-on bet. If DaBoyz act a little gutsier, though, they'll go the extra yard with a push past a look-to-the-left peak at 1308.00 shown in the chart. If and when that occurs, bears once again had better dive for cover.

The 1296.75 target that I aired here a few days ago is proving more stubborn than one might have expected. In fact, after making a weak second top at 1296.50 early in the session, the futures are actually extending Tuesday's moderate losses this evening -- a little encouragement and spiritual nourishment, perhaps, for right-thinking, decent bears around the world. As of this moment, the selling has exceeded a minor 'd' target at 1284.75 by three ticks -- enough, probably, for us to infer that more selling awaits.  If ESM retraces 61.8 percent of the lunatic rally begun on Friday, that would bring it down to 1280.25.

The peak of yesterday's 25-point rally missed our 1296.75 target by just two ticks, but bears shouldn't be lulled into thinking that might be the end of it. In fact, after the by-now obligatory whoopee cushion leap in the opening minutes of a session, the futures flatlined for the remainder of the day in a shallow consolidation capapble of pushing them to at least 1317.00 on the next thrust. Night owls looking for a low-risk way to board may have to drill all the way down to the one-minute chart (see inset), since that's the first place I was able to find "external" peaks subtle enough for such purposes.

Moments ago, the E-Mini S&Ps made a marginal new high for tonight at 1284.75. The rally still looks impotent from an impulse-leg perspective, but if DaBoyz pop the futures above 1287.50 on Monday morning's opening bar, be wary of a bull trap.  The absence of more horrific news from Japan is bullish, of course, but not quite as bullish as the news from Libya is bearish.

The rally so far tonight equates to about 80 Dow points, but it is gutless in Hidden Pivot terms, having exceeded no prior peaks on the hourly chart.  Even so, there looks to be sufficient power to get the futures to at least 1296.75, a Hidden Pivot,  if and when its 'D' sibling at 1283.75 gets shredded (A=1261.50 on 3/17; B=1287.50, and C=1270.75). Camouflage for the ride up will be most easily found on charts of 15-minute degree or less, but there will not likely be much edge in shorting 1296.75, since it lies within the thick of several closely spaced peaks recorded a week ago on the way down.

The rally lost momentum by mid-session yesterday, although stocks did not subsequently fall apart.  Night owls can risk three ticks bottom-fishing the 1259.50 target shown, but please note that the too-obvious structural low at 1257.75 makes this gambit less than ideal.  ________ UPDATE (8:08 p.m. EDT):  Just as we were about to publish this tout, the lunatic fringe goosed the futures to a so-far high at 1272.50 -- equal to point 'C' of the pattern shown in the chart. Assuming the hysteria is driven by good news concerning Japan that has not yet hit the tape, and that the rally continues, we should look for it to continue to at least 1278.25, a Hidden Pivot resistance that can be shorted with a 1.00-point stop-loss.  Camouflaged "longs" can also be attempted on a marginal breakout above 1272.50.  _______ FURTHER UPDATE (3:44 a.m. EDT):  Driven by short-squeeze hysteria tonight, the futures have shredded every minor Hidden Pivot on the intraday charts, even as they proved too gutless thus far to take out Tuesday's 1283.50 high. Let's try shorting again at 1294.75, stop 1295.25, but if the trade fails, keep trying using targets from the hourly chart.

Yesterday's bottom at 1241.25 came off a Hidden Pivot that was precise to-the-tick (see inset).  If the futures continue lower today, expect the same precision relative to the 1231.00 target shown in the chart. A relapse to that price could yield an excellent buying opportunity. Alternatively, bulls would seize the offensive if they can pop the futures above  a small peak at 1263.75 made on the way down yesterday (easily visible on the 15-minute chart). ______ UPDATE (9:41 a.m. EDT):  There being no clear evidence the world was going to end today, stocks have vaulted the ol' Wall of Worry like Princess Bride's Fezzik on steroids. As is so often the case, today's short-squeeze, which got within 1.75 points of a 1275.25 Hidden Pivot target, was mostly over before the regular trading session was more than a few minutes old; thus, most traders, even bullish ones, would have missed it.

The e-mini S&P500 futures look bearish, with active targets at 1257.25 and 1231.00.  U.S. stock indices fell sharply during the early morning hours yesterday, doing significant technical damage to their respective charts.  S&P500 futures had already begun a downward impulse wave on the daily chart as of Friday, but yesterday they swept past several more external prior lows, intensifying the strength of the move.  A robust pattern on the 360-minute chart (A=1307.75) has been confirmed and is aiming for a midpoint pivot at 1257.25 and, if below there, to its sibling D target of 1231.00.  Traders bottom-fishing that level should consider putting stops at 1229.75, just below the round number.  These targets will remain valid so long as 1283.75 is not revisited.  As in the gold and silver markets (among others), camouflaged shorting opportunities could prove very rewarding.  (Posted by Doug McLagan)