So what does your permabear editor see next for the bull market that won't die? For starters, an S&P run-up to the 3348.75 target of the pattern shown. If and when it is reached -- a very good bet, in my estimation -- the Dow Industrials, currently trading for around 28,538, would be at 30,000. The whys and wherefors are irrelevant, since the technical signs are clear enough. Although bulls did not exactly impale the midpoint resistance at 3209.88, they got well past it last week and seem to have turned it from resistance into support. This suggests that we should use p2=3279.31 as a minimum upside projection for the near term, meaning mid-to-late January or so. _______ UPDATE (Jan 2, 6:48 p.m. EST): What the heck could I have been thinking when I wrote above that this hot-air balloon would take another week or two to waft up to 3279.3? Looks more like it will happen by Monday, if not sooner.
My 3229.75 target precisely contained last week's rally, but we shouldn't kid ourselves that it will turn out to be the Mother of All Tops. Assuming buyers make short work of this Hidden Pivot resistance, the next stop on the path to infinity would be the 3252.75 target shown. Notice that the pattern's point 'A' low is just a little pisher and therefore unlikely to produce an important 'D' high. Sliding 'A' down to the much more compelling A2 would yield a weightier 3348.75 with a midpoint resistance at 3209.88 that was decisively exceeded last week. I mention it just to be on record with a seemingly absurd -- at least for this permabear -- prediction. My gut feeling is that we'll eventually see the E-Minis trading at those levels, implying Trump actually is a shoe-in for reelection. Paradoxically, the only thing that could derail him would be a bear market. Even then, it's difficult to imagine any of the Democrats, including Hillary, beating him. _______ UPDATE (Dec 26, 12:38 a.m. EST): I expect the 3252.75 resistance noted above to show stopping power, potentially short-able, but if the futures slide past it the next resistance, unnoted above, would be at 3260.50. This is the secondary (p2) Hidden Pivot of a major ABCD pattern where 0n the daily chart A=2882.00 on 10/10. _______ UPDATE (Dec 29, 8:55 p.m.): The 3252.75 target was exceeded, but only by 1.25 points. A short from my number with a tight stop could have been worth as much as $800 per contract so far. Anyone on board? I haven't established a tracking position because no subscriber mentioned it. _______ UPDATE (Dec 30, 5:21 p.m.): This pattern produced an rABC trade Monday from p=3128.88 that could have been worth as much as $350 per contract. The 3205.75
The trend has turned lazy this week, but we should not fail to notice that bulls haven't given up much ground. Rather than hang out yet one more potentially important top, I've focused on a minor one with a pattern that on Friday generated a mechanical buy signal. The ABCD here is gnarly but text-book beautiful, and that's why I expect a pullback precisely from the 3215.00 target. More immediately, a mechanical bid at the red line (3184.00), stop 3173.50, would offer decent odds. I'd rate the trade a '6.7' because the eventual move past p was labored and not especially sharp or decisive. ______ UPDATE (Dec 18, 10:50 p.m. EST): Now that FedEx shares have joined Boeing's on the disabled list, we need to give more weight to the possibility that the stock market's tedious oscillations this week are just distribution. Keep in mind that if an avalanche is coming, it will be telegraphed by small abcd patterns exceeding their 'd' targets. _______ UPDATE (Dec 19, 5:54 p.m.): The futures are within a millimeter of the 3215.00 target, which can be shorted using a stop-loss as tight as 3216.25. If it's hit and decisively exceeded, the next stop will be 3229.75, off this pattern. Both targets look like high-odds spots for a precise turn.
A 3227.50 target that lies 1.6% above Friday's close can be used as a minimum upside objective for the near term. It is not the same pattern I used to project 3206.25 for the December contract because the point 'A' is somewhat lower (and also a little unorthodox). The equivalent low would yield a 3218.50 target, so we should prepared for a possible stall at that price. Any higher would indicate 3227.50, a Hidden Pivot that looks like a good place to try shorting, especially if you've been long for at least a part of the ride north. It could be bumpy, since the futures struggled to get past p after stalling there a week ago.
The gnarly ABC pattern shown implies a strong bull leg ahead to as high as 3206.25. It would be equivalent to a 600-point rally in the Dow. The point 'A' low is pretty weak to match up with last week's nasty B-C correction, but it's all we've got. Considering the alternatives, it is certainly good enough for government work. It's also good enough for us to take seriously the 3137.88 midpoint Hidden Pivot resistance. Judging from the way buyers impaled it on Friday, the uptrend has at least two or three more days to go. That would be well in line with a blowoff to D=3206.25 and potentially congruent with a drop in VXX to a longstanding target at 15.66. Don't hesitate to buy some close-in calls pegged to a strike of 17 or higher if that happens. _______ UPDATE (Dec 9, 9:15 p.m.): Most of today's price action took place above p=3137.88 (see tout). That not only shortens the odds of a move to D=3206.25, it also makes a pullback to X=3103.69 an enticing 'mechanical' buy. The 3069.25 stop-loss implies $1700 of theoretical entry risk per contract, but there are alternative entry strategies in the Hidden Pivot arsenal that could cut that by as much as 90%. Stay tuned to the trading room for real-time tips. ______ UPDATE (Dec 12, 9:05 p.m.): Nothing has changed, but a dip below 3106.75 would darken the outlook in proportion to the size of the breach. FYI, 3106.75 is a midpoint pivot, on the hourly chart, tied to A= 3158.00 on 12/2. _______ UPDATE (Dec 11, 10:41 p.m.): The futures are taking their sweet old time, but that has not changed the bullish outlook for the near term. Even so, I am no longer recommending a 'mechanical' buy at 3103. _______ UPDATE (Dec
The feisty, 50-point bounce off Tuesday's fear-stricken lows allowed subscribers who followed the simple 'counterintuitive' buying strategy sent out Tuesday evening to book profits of as much as $4200 Wednesday morning on a four-contract position. The futures ended the day above the 3103.00 midpoint Hidden Pivot, implying they are likely to reach the 'reverse ABC' pattern's 3136.25 target at least. If this Hidden Pivot resistance is easily breached, or if the December contract close above it, that would portend a test of the all-time high recorded last week at 3158.00 and, presumably, a decisive move past it.
I didn't contemplate putting out a bullish trade in this vehicle when I sat down late Tuesday night to update touts for Wednesday, but there it was, hanging like ripe fruit from a low branch: a textbook 'counterintuitive' buy signal at the green line (3093.25), stop 3069.25. The trade is predicated on a rally to at least p=3117.00, and I am unable to find anything seriously wrong with the pattern itself. Even the position of the point 'C' low in relation to the cliffhanger 'A' is heavy on fear factor -- the key ingredient of the CI set-up. Entry risk could be reduced a tad by converting this to an rABC trade where A= 3097.75 (11/22 at 10:30 a.m.), but please note that this gambit is already live as of 3:00 p.m.
Monday's dive was a sample of what we should expect when the still hibernating bear finally emerges. Mr Market not only delivered a swift kick in the balls, he did it while we were sleeping. I'd sent out a 3160.25 rally target last week and stuck to it even after a rally died just five points shy of it. Lo, short-covering bears got second wind Monday morning, pushing this gas-bag to a 3158.00 top that would have been easily shortable using an rABC set-up. Trouble is, the high occurred at 4 a.m. when most of us were sleeping. We shouldn't hope for great opportunities to come at convenient hours, because that's not how the game works. But we will need to be aggressive if we are going to seize whatever crumbs come our way. For now, I have no new targets to offer, nor even a confident sense of where the futures might be headed next. _______ UPDATE Dec 3, 7:55 a.m. EST): The opening is nearly 90 minutes away, but the futures are not getting much bounce off the gnarly Hidden Pivot pattern shown here, with a 'D' target at 3098.75. This is not a healthy sign. DaScumballs will valiantly keep trying to exhaust sellers, groping for a bottom in order to short squeeze the opening. We shouldn't bet against their success at rigging the game in this way, but it behooves us to treat whatever rally is coming with care and skepticism.
The 3160.25 rally target we've been using to keep us properly bullish remains to be achieved. Even though Wednesday's push to 3155.00 came close, it wasn't as close as we should expect, given the way buyers took out the 3125.50 midpoint resistance earlier in the week. All that aside, the futures are trading above a major trendline after impaling it last week, presumably adding to the euphoria, so extra caution is warranted. That means monitoring price action at 3138.00 for now, a minor Hidden Pivot support that should be expected to produce a tradeable bounce (15-minute, a=1555.00 at 6:15 pm. EST on 11/27). A 3138.25 bid for a single contract, stop 3136.25, is suggested. You'll be on your own if the order fills. _______ UPDATE (Dec 1, 11:31 p.m.): Cancel the bid, since the futures have rocketed skyward after having gone no lower than 3139.50. _______ UPDATE (Dec 2, 10:14 a.m.): And now stocks are plummeting. It would appear that 'trade hopes' have faded just a smidgen this morning.
I've presented the 3147.50 target shown in the chart as a challenge to bulls, but based on ten years of price history, we shouldn't doubt that they will make short work of it. I would nonetheless encourage you to consider rABC shorts that utilize the target, provided you know what you are doing. If the trade sets up and triggers in the wee hours, it will enjoy good odds of at least a small payoff; after the opening bell, perhaps not so much. An easy move past 3147.50 would put in play a 3160.25 target, calculated by sliding the point 'A' low down to Nov 6's 3063.00 bottom. _______ UPDATE (Nov 29): The rABC trade triggered around 6:30 a.m. Wednesday at 1348.25, producing a theoretical gain of $100 to $400 per contract, depending on whether you covered the short at p or d. The futures subsequently went nowhere after breaking above the intraday high (aka our point 'C' high). They were continuing to screw the pooch on a very dead Friday.
