E-Mini S&P

Okay, here's the plan. Now that the S&Ps have whipsawed their way to fabulous new recovery highs, we are going to be triply cautious instead of treating our 1356.00 target as though it carried an ironclad, money-back guarantee.  Why so?  Well, try to imagine how many hosers would be caught with their pants around their ankles if the broad averages were to go into a horrific dive right now, after they've seemingly weathered headline global strife with flying colors, serenely oblivious to any and all dangers save perhaps the closing of the Suez.  As a practical matter, we'll plan on shorting the bejeezus out of 1356.00, assuming the  futures get there.  We will have to do so using camouflage, however, since the target may be too well-advertised by now to give us an "exclusive."  To effect a timely signal, I'll post the trade in the chat room first, and then via an update to the E-Mini S&P tout itself.  The signal could come later this week or not at all, so you'll need to be alert.  More immediately, the March Mini was noodling around just off Tuesday's highs, but the only decent "camo" opportunity -- a midpoint buy at 1300.25 the came at 6:15 p.m. EST on the five-minute chart -- is past.

Don't ever think you've killed the Hydra by lopping off one or two of its ugly, smelly heads, no sirree.  Yesterday's buyers, insensate as ever, were manifestly untroubled by world events, and so we'll have to assume it's going to take more than a little blood on the streets of Cairo to cause them to back off for more than a few hours.  Still, because there are no gimmees in the world of Hidden Pivots, we'll accept nothing less than a high exceeding Monday's pre-swoon peak at 1299.50 as a sign that bulls are back in charge, much as they have been for the last 23 months.  As of around 11:20 p.m. EST Monday, the March contract had slightly exceeded the 1288.00 Hidden Pivot target of a minor ABCD pattern on the hourly chart.  This was reason for a moderately bullish bias for the very near-term, but traders will need to drill down to the five-minute chart to find camouflage cover.

If the secular bear market is indeed re-emerging with a vengeance, then the S&P's failure to reach a modest 1305.75 rally target after an all-but-interminable series of mincing steps becomes understandable. That failure is in fact official, since the 1267.50 point 'C' associated with the target was exceeded to the downside on Friday.  Further slippage today to beneath early July's 1257.75 low would significantly increase the implied strength of the bearish impulse leg, which was catalyzed by a vicious head-fake on Friday's opening bar.  Note that a bigger-picture target at 1356.00 remains viable, since the 'C' of the massive pattern that produced it lies far, far below, at 1165.75.  Even so, one gets the idea from the chart that Friday's plunge represents a tone-change for a bull cycle that since early December has proceeded with arrogant certitude the entire way.

We've been waiting patiently for an eon to short the E-Mini S&P, but I would caution against initiating the trade if the futures somehow contrive to reach the target with an hour or less remaining in the session.  It was never my intention to take the position home over the weekend.

Amazing how the futures can continue to drag themselves higher even when buying interest is very evidently close to zero.  A Hidden Pivot target at 1305.75 is still my minimum expectation, and you can still short it with a stop-loss as tight as three ticks.  Officially, we'll risk 1307.25, since the rally has taken so long to get there that we'd hate to miss a potential top. I am mildly uncomfortable with the fact that the target has been advertised for so long, so don't be too surprised if we get front-run.

A too-familiar Hidden Pivot at 1305.75 remains my minimum upside objective for the near term, and it can be shorted with a stop-loss as tight as you please.  However, there is no bullish play from here simply because each marginal upside gain of a point has been followed by a gratuitous feint lower of three points.  Some rally.  Around 1286.75 is still the place to look if you're inclined to bottom-fish a swoon.

There are some fine nuances contained in this lesson, which focused on a minor bullish opportunity in the E-Mini S&Ps as well as a short in Comex Gold with $16 of downside potential. Because stocks and precious metal futures have been trending higher for so long, it will require a psychological adjustment on our part to trade them when they are falling. Thus, this session is part of a process to get our minds right for the inevitable resumption of the long-term secular bear in stocks.

The futures were two ticks shy of  a minor rally target at 1291.50 shortly before midnight EST, but keep in mind that it's just a stop along the way to 1305.75, a Hidden Pivot so slow in coming that we risk dying of boredom if it isn't reached within the next day or two.  The midpoint pivot associated with that number is 1286.75, so any pullbacks that get near it should be scrutinized for possible camouflage-buying opportunities.

So pathetic was the buying interest yesterday that the miserable rally it spawned could not achieve its very modest Hidden Pivot target in six hours of trying. That target, to remind you, is 1292.50, and nothing that occurred in yesterday's banana slug-fest has invalidated it. In keeping with today's 240-minute-chart lollapalooza, I've reproduced one here to show how plausible is the previously given target at 1305.75. That's my minimum price objective at the moment -- a weigh station enroute to a more important Hidden Pivot at 1356.00. More immediately, night owls can try bottom-fishing at 1275.75 if 1289.75 has not been exceeded to the upside first.  That's the midpoint support of the pattern (60-min) A=1295.50 on January 19; B=1267.50 on January 20; and C= 1289.75, recorded yesterday. _______ UPDATE (11:52 a.m. EST):  Surprise surprise surprise.  After topping overnight at 1191.75, three ticks from our target, it's been downhill. The so-far low at 1278.50 is useless for our purposes, however, since it is equal to yesterday's lows.