E-Mini S&P

A compelling Hidden Pivot at 1356.00 has been our lodestar for the last 130 points, after the futures tripped a theoretical "buy" signal at 1213.50.  On Friday, they got within 13 points of our target, and although I still regard it as theoretically viable, we need to be alert to the possibility that the Mother of All Bear Rallies could die without having reached it. That possibility was driven home by the so-far 17-point selloff  that has occurred in thinly traded holiday markets.  The move is robustly impulsive on the hourly chart, having surpassed no fewer than one internal low and four externals.  We'll look for opportunities to get short in real time intraday, so stay tuned for updates here and in the chat room. In the meantime, if you're proceeding on your own initiative, shorts should be considered from the 'p' midpoints and 'd' rally targets of every minor upward retracement.

With respect to the potentially important top I've been projecting for the stock market, Apple's shares appear to be out-of-sync following yesterday's nearly 5-point decline.  However, the Industrial Average and the E-Mini S&Ps are still tracking Hidden Pivot rally targets very precisely and will achieve them on moves that exceed yesterday's highs by, respectively, 108 points and 16 points. Even if Apple fails to reach its target, shorts advised in the other vehicles remain viable.

If you used the very tight, 1.00-point stop loss advised, you're short from 1339.25 and have covered half the position at 1336.25. (This action was purely mechanical, based on a risk:reward of 1:3 held constant throughout the trade. Since initial theoretical risk was 1.00, we needed at least 3.00 points of favorable movement before we took our first partial profit.) For your further guidance, I'll assume two contracts remain. Cover one at 1333.50, but tie the bid to a one-cancels-other order buy-stopping two contracts at 1340.25.  On a profit-adjusted basis, we are short the two contracts with a 1342.25 basis.  If you initiated the trade on a single contract, use a 1340.25 stop-loss, switching to a 2.50-point trailing stop and a 1327.00 minimum target if 1332.25 is touched.  We will re-short if the futures surge to 1356.00, but the trade should be initiated using camouflage.  Unofficially, however, you can use a 1357.75 stop-loss. ______ UPDATE (10:48 a.m. EST): We exited the position six minutes ago, buying back the shorts at 1340.25 for a theoretical gain of $200.  Next stop for this meth-crazed Mother of All Bear Rallies:  1356.00.

The Mother of All Bear Rallies continues to make progress -- at this point, one cub-like step at a time -- toward a 1356.00 target that promises to thwart buyers as few Hidden Pivots have in the last two years.  Meanwhile, the first of two minor Hidden Pivot targets given here yesterday would have produced a small profit for scalpers, at least in theory; and now the second, at 1339.25 (stop 1340.25), has the potential to do the same.  Keep in mind that we are shorting the little stuff on the off-chance that a major top may come from a minor Hidden Pivot rather from El Capitan at 1356.00.

With major, long-term targets not far above in several key vehicles that we monitor closely, we double-checked the Hidden Pivots not only for accuracy but for coincidence, since they could conceivably produce a very important top for the stock market within a week or less. Indeed, the S&Ps, Dow and bellwether Apple are all bound for ‘D’ rally targets that could all be hit around the same time. Meanwhile, although we looked for a real-time trade in the E-Mini S&P, the lesson here was that it is sometimes best to do nothing.

A modest after-hours rally in the E-Mini S&P has triggered the first of two scalp-shorts I'd suggested. Assuming an initial stop-loss of two ticks was used as advised, partial-profit taking could commence as early as 1331.50.

No change since yesterday. Besides a major Hidden Pivot at 1356.00, there are two rally targets immediately above that come from lesser patterns.  They lie respectively at 1332.75 and 1339.25.  You can short the first with a stop-loss as tight as 1333.25; and the second, stop 1340.25. We are risking relative nickels and dimes so that if the futures don’t quite make it to 1356.00, we’ll have a horse in the race. _______- UPDATE (10:48 p.m. EST):  As noted elsewhere on this page, a modest after-hours rally in the E-Mini S&P has triggered the first of two scalp-shorts I’d suggested. Assuming an initial stop-loss of two ticks was used as advised, partial-profit taking could commence as early as 1331.50.

Besides a major Hidden Pivot at 1356.00, there are two rally targets immediately above that come from lesser patterns.  They lie respectively at 1332.75 and 1339.25.  You can short the first with a stop-loss as tight as 1333.25; and the second, stop 1340.25. We are risking relative nickels and dimes so that if the futures don't quite make it to 1356.00, we'll have a horse in the race.

The 1356.00 target we've been using for this vehicle is close enough to the 136.25 target (136.05 if you use the one-off point 'A') flagged in SPY to command our urgent attention.  While the odds of picking the exact top of the Mother of All Bear Rallies are never going to be great, the way these targets are lining up makes this one of the more interesting possibilities we've seen since the rally began in March 2009.  Since a 1356.00 target has been mentioned by some other technicians, according to our friend Doug B, we should  start looking to get short via camouflage anywhere above 1345.00 or so.