E-Mini S&P

It's about 3:22 a.m. Monday morning, and the March contract has stalled at the precise 1285.25 midpoint of a rally pattern projecting to 1292.50.  Above that number, especially on a closing the basis, the futures would be indicating 1305.75, the 'D' target of a pattern begun from 1258.00 on January 10.

The futures have recouped about half of this week's modest slide so far today, but there should be little doubt that the final hour will see Da Boyz' most strident effort to keep the Mother of All Bear Rallies chugging along.  As of 12:04 p.m. ET, They were putting in a tentative corrective low at 1279.00, a single tick from an obvious 'd' target on the five-minute chart.  For traders looking to board, I would suggest hunting for camouflage on the five-minute chart or lower.

We were in and out of the futures during Wednesday morning's tutorial session, looking for a tradable low that never came. When the dust had settled, however, sellers had failed to drive this vehicle beneath last Friday's 1274.25 low. My hunch is that they'll succeed today, given the way the futures easily broke minor supports yesterday.  In any event, the selloff would need to hit 1249.25 this week -- about 30 points below current levels -- to generate a bearish impulse leg on the daily chart.  This is by no means a longshot bet, and I would therefore encourage night owls to take every good opportunity that comes along to get short.  As of 8:14 p.m. ET, there was a minor 'd' rally target at 1282.25 on the three minute chart that could be shorted with a 1.00-point stop-loss. _______ UPDATE: 1281.50 was as high as the little sonofabitch got before selling off 14 points to an intraday low Thursday at 1267.50.   Shorts who negelected to cover on weakness got hung out to dry when the obligatory end-of-day short squeeze brought the futures back to unchanged.

We needn't merely spectate as the futures work their way toward a potential major top at 1356.00, since there are lesser targets we can use to get long each leg of the way.  This one points to 1307.25, and although camouflage opportunities will be hard to find above these levels, one as close as 1282.50 lies below. That's the Hidden Pivot midpoint associated with 1307.25, and any pullback that approaches it should be regarded as a potentially tradable bottom. I've reproduced a chart that shows the relevant pattern, since it's not one that leaps to the eye.

Are we almost there??  The little-seen 480-minute chart shown makes a visually compelling case for a run-up to 1356.00 -- the moreso because of the nearly two-week hydrant-sniffing interlude near the C-D midpoint, 1261.00.  Much as I'd like to keep this target a secret between you and me, superstitiously increasing its chance of working, it looks too good to fail simply because "everyone" knows about it.  If and when the futures get there, I'll recommend shorting via camouflage rather than with a short offer and a tight stop at the pivot.  Between now and then, though, our bias for all swing trades should be bullish, since fully 70 points of upside remain.

Today's touts for the Dow Industrials and the E-Mini S&Ps project possible tops for the Mother of All Bear Rallies.  Only trouble is, the two projections would appear to be mildly out of synch if the Dow continues to rise 7.03 points for each ES point, as has been the case since the rally steepened in late December. I welcome alternative interpretations.

A 1285.25 rally target is still valid in theory but too stale to use to get short. With the futures glowering at Thursday's peak following their obligatory short-squeeze rally in the final hour, it seems unlikely ES will pop to a merely marginal new high.  I'll recommend spectating at the opening, but if any opportunities develop, I'll try to signal them in the chat room in timely fashion.

Early Thursday morning, a tortuous climb presumably devoid of buying other than short-covering by a few nervous Nellies, has gotten within a single point of the 1285.25 rally target flagged here. It is still valid -- and still short-able with a 1286.25 stop-loss -- although the odds of a quick and easy profit may favor night owls, since pent-up shorts could make quick work of the hidden resistance on an opening gap.  If you've made money on the long side of this well anticipated rally, you can widen the stop to two points. ______ UPDATE (10:30 a.m. ET): For whatever reason -- sabotage by Goldman Sachs? Boris Putin? Sarah Palin? -- the futures have stalled at exactly 1284.50, three ticks from our target. Since a 7-point pullback has ensued, the "No Sloppy Seconds Rule" applies, and I am therefore recommending that you cancel the order.

Because several of the vehicles that Rick’s Picks trades and forecasts actively were approaching imnportant inflection points, we spent most of the session identifying possible trade set-ups. Woeking mainly with hourly charts, we located precise spots to get short in the Mini-S&P, the Mini-Dow and the Diamonds (by way of buying February 115 puts). Gold and Silver were in no hurry to go either up or down, but a close analysis revealed why, amidst the most serious correction in months, our bias should be moderately bullish.