E-Mini S&P

Old timers might remember a day when such carnage as we witnessed yesterday in Cisco might have caused more than the piddling drop that occurred in the Dow and Nasdaq indexes.  Assuming that that's as bad as things are going to get for now, we'll look for the E-Minis to go bounding higher today, drawn magnetically toward our 1356.00 target as Icarus toward the sun.  The futures never even made it down to a 1313.25 midpoint support where, during an impromptu online session yesterday, we had determined to get long with a three-tick stop-loss.  A bullish impulse leg created on the 30-minute chart toward the end of the session was squandered when a lesser, bearish one ensued, leaving night owls and camouflageurs to discover what they will.  The chart accompanying comments under 'Today's Action' shows what a near-perfect buying opportunity might look like. My short-term bias as of around 7:30 p.m. EST was very slightly bullish, but a print at 1320.25 would turbocharge it. _______ UPDATE (10:14 a.m. EST ):  It took all night for a camouflage trade to develop, but if you want to see what  pportunity looks like, check out the A-B impulse leg that finally signaled the turn. On the 30-minute chart, A=1310.00 at 5:30 a.m. EST; and B=1315.75 at 9 a.m.  All three coordinates are single-bar, and they indicated a 1314.75 buy-stop entry a little more than 30 minutes into today's session.

Without really knowing why, the futures went all funny as The 'Nank's testimony dribbled out onto the Web yesterday. As soon as the Street's trading algorithms recover their composure today,  look for the rally to continue to at least 1330.00; or if any higher, to 1335.25.  Both targets were given here earlier.  They are subordinate to a more important one at 1356.00 that (according to my friend Doug) apparently "everyone" has been expecting.  We'll want to get short up there, of course, but we'll do it with camouflage, not by standing in front of The Little Engine That Could.

A nifty trick you can perform with the Hidden Pivot Method is predicting long periods of tedium based on the presence of “dueling impulse legs.” We found them in copious supply in the chart of the Dollar Index, but also, correspondingly, in the euro’s intraday and daily charts. The markets were flatlining on this day, but we tried nonetheless to force a bullish trade in the E-Mini S&P. Alas, it continued lower without tripping a “camouflage” entry signal. We also discovered a possible breakdown shaping up in Crude, with a similar pattern already developing in Copper.

Shortly after 3 a.m. EST, tedium reined in bullion and the index futures.  Gold and Silver were both off slightly in what appeared to be a mellow consolidation of Tuesday's gains;  and the E-Mini S&Ps were also off a few points, presumably to shake stock loose from anxious widows, pensioners and orphans.

I pored over the hourly chart to see if there was a pattern analogous to the one that allowed me to project Tuesday's top in the Mini-Dow within a single point.  For what it's worth, there was no such pattern, but it would have required a point 'A' low at exactly 1241.75.  (I determined this simply by working an ABC down-pattern from yesterday's high, 1320.00.)  Looking ahead, we are still relishing the thought of shorting a potentially very important Hidden Pivot at 1356.00; day trades should hew to a bullish bias until then. Most immediately, the futures appear bound for at least 1330.00, a Hidden Pivot whose provenance is shown in the chart. Note to Pivoteers:  Today's analysis has the potential to test my fondness for the one-off 'A'.  If it doesn't work, the futures should blow past my target and top at another, 1335.25, a Hidden Pivot you can short with a 1.00-point stop-loss.

A by-now familiar target at 1356.00 beckons, but more immediately we should concern ourselves with a lesser one at 1312.75, a Hidden Pivot whose ABC origins are shown in the chart. A 3-tick breach would indicate 1315.00.  However, best odds for shorting lie at 1312.75, stop 1313.50, since the 'D' target of a larger pattern (A=1249.50 on December 31) is 1312.25.

The little egg-sucker has been such a killing bore lately that it barely deserves an update. That said, I should note that the high of yesterday's rally, if you could call it that, slightly exceeded a target analogous to one that worked perfectly in the Mini-Dow. (In theory, we got short exactly at the intraday high, 12034). Higher prices likely impend for both vehicles, but you could try impeding this one with a short offer at 1312.25, stop 1313.25.  The relevant pattern -- a cross-eyed temptress -- is shown in the chart.

All was quiet as midnight approached -- so quiet, in fact, that alert night owls may be able to cull a minor opportunity in the E-Mini S&P if an all-but-unnoticeable impulse leg should poke above the tedium.

To remind you: We're focused on two objectives right now: 1) Shorting 1356.00, a compelling Hidden Pivot target that's been in our sights for a while; and 2) guarding diligently against the possibility that this Mother of All Bear Rallies will die without having reached the target.  More immediately, though, traders with infinite patience can try to leverage yesterday's soporific tedium by staying alert to any impulsively bullish thrust on the three- or five-minute chart. Relatively few of our competitors are likely to care about such things after yesterday's death dirge, and that is why a possible change in the pattern spells opportunity.