E-Mini S&P

So when is Mr. Market going to wipe the stupid grin from bulls' faces? Soon, would be my guess. Check out the trendline in the chart. A pisher it ain't. It connects the peaks of two major rallies and goes back more than seven months. And here are two more trendlines that are arguably even more daunting.  The first shows the New York Composite Index (NYA) and comes from Peter Eliades.  It first appeared here more than a month ago. The second shows the Industrial Average. If these trendlines fail to stop the bullish wilding spree dead in its tracks, then technical analysis is just toad entrails and tea leaves. All three resistance points lie not far above current levels, implying that the manic rally in U.S. stocks could continue into next week. 'Freaky Friday' is not usually a reversal day, so we should brace for more of the same, at least for now. _______ UPDATE (Nov 7, 10:19 p.m.): DJIA popped through its respective trendline like it wasn't there, hitting a high nearly 200 points above it before settling at the midpoint of the day's range. This is quite impressive, and there is no denying it is very bullish. Let's see how NYA and the E-Mini S&Ps (see below) do.

So-far moderate selling in after-hours trading stalled precisely at p=3070.75, but we should look for a move down to at least d=3063.50 if that Hidden Pivot midpoint support gives way. If you want to bottom-fish against the trend, a stop-loss as tight as 3062.75 should suffice. My bias remains bullish due to the 10-point overshoot of a 3075.75 rally target drum-rolled here earlier.  The target was sufficiently clear and compelling that it should have repelled buyers, and precisely so. The fact that it didn't is evidence that they are still out there, eager to jump aboard but in need of a breather.  Let's see whether a fall to d=3063.50 provides one. If it gets trashed, that would shift the minor trend to bearish. ______ UPDATE (Nov 6, 11:01 p.m.): The futures rallied 15 points after bottoming at 3063.00, two ticks below the target furnished above. The move was worth as much as $750 contract, but only one subscriber has reported acting on it so far.

A potentially important rally target at 3069.75 broached here earlier still looms. However, there is another of even larger degree at 3075.75 (see inset) that has come into focus and which needs to be taken into account. Together these two Hidden Pivots would apppear to pose such daunting resistance as to make an easy move past them improbable. Thus, with a potentially tradeable top slightly above, I'll recommend taking a speculative short position using any means that suits your style. Stay tuned to the trading room for more-detailed guidance, since opportunities to get aboard using put options in SPY or DIA could develop intraday. The latter has rally targets at 274.14/274.44, 276.90 and 280.88, but only the last corresponds to the pattern used to project 3075.75. Recall that we have a corresponding target in AAPL at 283.97 that can be used to bet speculatively on an important market top. _______ UPDATE (Nov 4, 5:26 a.m. EST): The glue-sniffers are running the show, having wafted the futures decisively past 3075.75 in pre-dawn trading. We'll stay out of their way for now, but if you've held a position on the way up, you should be out of 3/4 of it by now. _______ UPDATE (Nov 4, 4:53 p.m.): Buyers didn't exactly shred the 3075.75 resistance, but they did exceed it by a not inconsequential eight points, and the pullback so far has been shallow. Bulls deserve the benefit of the doubt for now, but let's see how they do on 'turnaround Tuesday' before we resort to wishing them ill.

The failure of Friday's short-squeeze to achieve the 3029.25 target we'd set for it is puzzling, especially considering how easily buyers shredded the p2 'secondary' resistance at 3015.69. It still looks like an enticing spot to try shorting, especially if you've made money on the way up. Check the trading room for rABC coordinates, since this vehicle has attracted an active following lately. If the target gets shoved aside, look for more upside to  3056.75, a Hidden Pivot resistance calculated by sliding the point 'A' low down to 2926.25.  The resulting pattern racked up enough precise hits last week to suggest it and its D target will not only work, but work precisely. _______ UPDATE (Oct 28, 8:21 p.m.): Buyers easily exceeded 3029.25, putting the 3056.75 target in play. _______ UPDATE (Oct 29, 4:59 p.m.): The 3056.75 target can be shorted with a stop-loss as tight as 3058.25. If it's hit, however, you should shift your sights upward to the 3069.75 target shown here. The sharp pullback from within a millimeter of p=2962.38 lends authority to the pattern and the target. _______ UPDATE (Oct 30, 8:54 p.m.):  The little wind-bag has  wafted as high as 3055.00 in after-hours trading. Let's see how long it takes for buyers to chew through the 3056.75 target, since that will determine the odds for further upside to 3069.75. Note: If 3056.75 gives way easily, that does not necessarily mean that 3069.75 will be a pushover. _______ UPDATE (Oct 31, 6:06 p.m.): Sellers swarmed the opening, carving out a low at 3020 an hour later that may or may not survive Friday nuttiness. In retrospect, a short from the 3055.00 high that would have been worth as much as $1700 per contract was possible, but only if you were glued to your trading screen an

With a global recession looming, it's tempting to view every selloff as the start of The Big One. And yet, the bullish implication of the sharp upthrust through p ten days ago is undiminished by the mild weakness that ended the week. The futures are still a good bet to reach the 3069.25 target shown, an observation we should keep in mind no matter what the news. Earnings season has been less-than-stellar so far, although the delayed reaction of certain stocks to bad news -- notably NFLX, BA and JNJ -- has been more than a little disconcerting.  This dynamic demonstrates that price fluctuations have less to do with the news than with cyclical mood swings of a mysterious nature. For now, we'll give the December contract wide berth. A pullback to the red line (2962) would trip a weak, theoretical 'mechanical' buy signal, stop 2926.25, but I'd prefer waiting for a better opportunity, even if it fails to materialize, at x=2908.50. ______ UPDATE (Oct 21, 7:04 p.m. EDT): We'll put the 3069 rally target out of mind for a moment in order to short the fetching rABC pattern shown. I'd prefer to do so off a marginally higher point 'C', but if the futures fall to the green line without having exceeded it, the trade will still be a go. Since initial risk is about $1000 per contract, you should consider using the micro-contract if that's too rich. _______ UPDATE (Oct 22, 10:23 p.m.): The short triggered at around 4:00 p.m. and was showing a profit of about $650 per contract at tonight's so-far low, 2982.00. Use a stop-loss at 2994.75, and make it o-c-o with an order to cover the position at 2976.00.  You can keep half at your discretion if you feel up to working the order,

Buyers impaled the 2962.38 midpoint resistance on Friday (see inset), leaving no doubt about whether the futures will achieve the 3069.75 'D' target of the same pattern. It lies 3.36% above, which is roughly commensurate with one in AAPL at 243.68 that is 2.5% higher.  We've been watching AAPL closely because the decade-old bull market is unlikely to end as long as Apple shares are moving higher. Concerning the E-Mini S&Ps, the rally pattern is sufficiently clear and compelling to suggest that a tightly stopped short at D would enjoy success. As always, however, I would recommend shorting aggressively only if you've made a profit on a long position enroute to the target. Stay tuned to the chat room if you would like guidance on this, since trades disseminated in the room in real time have racked up a very impressive track record lately, most recently with a $2400 theoretical winner in ES on Friday.

Subscribers reported getting short a single tick off the high today, reaping what turned out to be a relatively quick and easy bonanza. The E-Minis sold off hard a half-hour after peaking, allowing those who used December futures to leverage the move to rack up gains of as much as $1,250 per contract. Most reported profits ranging between $400 and $750 -- not bad for the 35 minutes of work it took to cash out at that level. Some traders reported using put options, including SPY Oct 11 295s bought for 0.73 that subsequently traded as high as 1.32. Puts offered a cheap way to play, but if you factored in slippage they would have been rather more labor-intensive to manage than futures contracts. So what's next? I view any rally these days as a short-sale opportunity, and I will continue to look for them. The best place to keep apprised in real time is in the Trading Room. I am not quite ready to go all-in on a short, however, because I still expect AAPL, which closed at 227.40, to hit 243.68 before it runs out of steam. _______ UPDATE (Oct 8, 5:31 p.m.): The sharp selloff stopped precisely at the 2890.00 midpoint support of this pattern. Its decisive breach would portend more downside to the 2820.50 target.  Traders should be alert for a reversal from our 'sweet spot' back up to the green line, since that could set up an opportune 'mechanical' short. _______ UPDATE (Oct 10, 10:45 p.m.) Sellers failed for a second straight day to take out the 2890.00 midpoint support. The reaction looks torqued to blow past the 2959.50 point 'C' of the bearish pattern, opening a path to 3000, where a series of tops were recorded in the last week of September.

Given the ease with which the futures sliced through the 2898.13 midpoint pivot shown, there is more selling to come. At a minimum, the presumptive correction should continue to at least p2=2834.31. The justification for bottom-fishing there is that another strong bull leg awaits. If so, p2 is a logical place for a reversal. If the December contract were to instead head down to D=2770.50 -- or, heaven forbid, exceed it -- that would raise the odds that the next rally will produce a very tradeable top at either p or D. ______ UPDATE (Oct 3, 8:39 p.m.): If this short-covering spree hits x=2961.64, that would trigger a mechanical short, stop 3026.00.  The approximately $3200 of entry risk per contract is too steep, so we'll look for another way in if the opportunity should arise.______ UPDATE (Weekend): This chart shows another reason to consider shorting just above with a stop-loss as tight as five ticks.  It's a cheap way to play the 'mechanical' set-up noted above, but I am recommending it only to those who have made at least a few bucks on the way up.

It's no great stretch to imagine the December futures falling all the way to the 2811.00 low shown in the chart (inset) to test its support. More immediately, they seem bound for at least 2924.25, the bearish target of a gnarly pattern on the hourly chart (A= 3024.50 on 9/19; or alternatively D=2936.25, where A=3012.25 on 9/23). I will be observing the Jewish New Year and won't be in the chat room until Tuesday night, but I'd encourage you to use these patterns in the meantime to tame and trade this dervish. I bought a few DIA puts (October 4 265s) on Friday just to have a horse in the race, but I won't be able to add to the position after sunset Sunday evening.  You should consider it yourselves, though, laying in a small inventory of puts on intraday rallies. Don't bet big, since odds will always be against put buyers in a bull market that has endured for more than ten years. ______ UPDATE (Oct 1, 12:40 a.m.): Bears are once again on the run. They had better dive for cover if this gas-bag exceeds 2995.00. _______ UPDATE (Oct 1, 10:02 p.m.):  Today's plunge turned from within two ticks of a 2936.50 target posted by 'Bachus' in the trading room shortly before it occurred. The bounce so far has been feeble, suggesting still lower prices are coming. If so, use 2930.75, and then 2924.25 for targeting and trading against the trend. These pivots were calculated by sliding the point 'A' high to successively higher peaks on the hourly chart.