E-Mini S&P

The slowest trading day of 2010 produced intraday charts for this vehicle that look like a bowling ball's EKG.  We'd anticipated this in the weekly tutorial session and expect more of the same as the week wears on.  That said, the upward drift produced an impulse leg on the hourly chart that might prove to be exploitable if it traces out a correction similar to the one shown. Camouflage artistes should make certain that any such pullback meets all of our rules, including being equal, at least, to 0.618 of the k-A segment.

The futures have been down by as much as eight points Sunday evening, but bears shouldn't get their hopes up, since the "weakness" is almost surely being engineered by bulls intent on shaking down the nervous Nellies.  Night owls can try bottom-fishing using the still-developing pattern shown in the chart. If the as-yet-undetermined midpoint support occurs in the middle of nowhere, so to speak, it could create an opportunity with relatively little risk.

During this week's tutorial session, I was joking, sort of, when I said it might take the rest of the week for this swamp-gas hoax to reach an extremely modest, 1257.25 rally target that even now seems as inevitable as the next sunrise. Anyone who got long on my say-so has been accruing profits at the rate of about 12 cents an hour, but your diligence should have produced sufficient gains by day's end to buy lunch. If you've stayed long for the whole, fabulous ride, risk some of your lucre to get short with a 1258.25 stop-loss.  Take the position home overnight only if it is at least 4.00 point in-the-black at the bell.

Over the very near-term, the futures are going to at least 1257.25, the Hidden Pivot target of the pattern shown.  It looks too obvious to short comfortably, but if you are hankering to get long, I'd suggest leveraging a camouflage entry opportunity on the three- or five-minute chart.

I'd forgotten about the 1250.25 rally target I'd posted for the December contract but was reminded of it when a trader who recently graduated the Hidden Pivot course reported that he'd interpolated the target for the March contract, gotten short there with a 1.00-point stop-loss and come away with a small profit.  The relevant pattern is shown in the accompanying chart, and I'm embarrassed  to say that it's a type of pattern that, in teaching mode, I usually effuse over, formed as it was by the relatively quick completion of the ABC phase, followed by a grind to 'D' that seemed to take forever.  Our arguable edge here comes from the fact that the C-D leg takes so long to complete that Gartley and other 123-pattern players get bored to death with it and...um, forget about it (just as I did).  As our student/trader proved, however, it pays to keep track of such things and to be patient as such patterns develop.  Creating a matrix that lists all patterns and their respective points X, p and D is the best way to do this, and that is why I've begun to include the construction of a matrix in the Hidden Pivot course.

A short-squeeze rally in the opening hour failed by two ticks to exceed an 'external' peak from Tuesday, providing the evidence of gutlessness we needed to justify taking the rest of the day off.  It was all downhill from there, albeit not steeply enough to provide any special opportunities for shorts. The selling was labored, and when five hours of huffing and puffing was done, the intraday low and high were separated by just ten points.  Traders will find numerous downtrending abc's to look at Wednesday night, but the only one that I half-like will engender a midpoint support at 1229.25 -- too close to the intraday low to be worth much for trading purposes. For your information, its 'd' sibling lies at 1224.00.

A Hidden Pivot at 1245.25 is equivalent to the one at 1250.25 that I gave here earlier for the December contract, and there should have been no problem achieving it.  The fact that there was a problem should command our attention and tilt our bias negative for now.  Night owls can nevertheless try bottom-fishing the 1228.00 target of the corrective pattern show, but you should pay close attention to price action at the 1232.75 midpoint, since a precise bounce would corroborate the 'd' target itself.

Pretty amazing.  The futures had all night and a full day to rally just seven points to a Hidden Pivot target, and yet they somehow failed.  More amazing still is that they will likely continue higher in the days and weeks (months?) ahead despite mounting evidence that there is almost zero buying interest. This seeming paradox exists because short-covering is always lurking in the shadows to pop shares higher. It usually take a little news, any news, to trigger a squeeze, but yesterday there was no news whatsoever. (Granted, Brett Favre won't be starting tonight against the Giants, but we wouldn't have expected that story to move the markets.)  The 1250.25 target remains valid nonetheless, and you can try shorting there with a stop-loss as tight as 1.00 point.  However, it is a sign of incipient (and presumably short-lived) weakness that the futures died more than three points shy of an easy target.  The pattern with which it is associated is shown in the accompanying chart.

DaBoyz were unable to squeeze much out of Sunday night's opening bar, which peaked just a couple of points above Friday's manipulated, rosy-looking high.  However, They have allowed only a shallow pullback since, and we should therefore expect Them to keep trying as the night wears on. They'll have a 'D' Hidden Pivot at 1250.25 to shoot at -- 7.50 points above the so-far peak at 1242.75.  As of around 10:20 p.m., camouflage opportunities appeared limited, since even on the two-minute chart the last of them had been used up.