E-Mini S&P

Early Wednesday evening, the futures stabbed above a key high recorded Tuesday on the way down, creating a bullish impulse leg on the 15-minute chart in the process.  Assuming the rally does not take out Tuesdays's peak as well, it could conceviably create a camouflage opportunity for night owls.  I've sketched out a possibility in the accompanying chart to help guide you. ______ UPDATE (12:52 a.m. ET): The trade was triggered a little after 9 p.m. at 1233.25, and although it took the rally an hour-and-a-half to get airborne and theoretically profitable, it reached its primary target, 1236.75, around 12:45 a.m.   The so-far high is 1237.50, but there is room to at least 1239.25, and thence 1241.00, before the weight of Hidden Pivot resistances will be felt. 

There is nothing here to even remotely engage our interest at the moment, and I'm not going to force targets, even for night owls.  Yesterday's decline breached no external lows, so our bias should be bullish coming in this morning. That would of course change if the futures were to penetrate even one of the three lows on the hourly chart going back to Friday.

Yesterday's rally, such as it was, died 1.00 point below the 1225.75 Hidden Pivot midpoint shown in the chart, but if it gets past the resistance today look for the futures to hit a minimum 1238.25. That's slightly below the target of a larger pattern we've been using to keep us properly bullish, but it's close enough to describe a cluster of targets that could show some stopping power.  Even so, because of the pernicious nature of the rally, I'd suggest using camouflage to get short rather than simply hanging out an offer at a 'D' pivot.  Officially, though, and to make it easier, we'll offer two contracts short at 1238.25, stop 1239.25.

A 1240.00 rally target billboarded here earlier remains viable, although catching a ride north could prove exceedingly difficult, since the futures have gone into spasms of hysteria upon encountering two resistance peaks near 1224.00 that were recorded earlier in the month. Sunday night, they were playing toe-sies with Friday's 1227.25 high, waiting for a mote of news that could be used to put the squeeze on bears. Apparently, Heli-Ben's emetic interview on "60 Minutes" was not it.

DaBoyz kept bears on the run for a second straight day, presumably locking in their edge for the remainder of the year.  Look at the accompanying chart and see if you don't agree that a minimum 1240.00 is in-the-bag. It's hard to predict what kind of cat-and-mouse price action will obtain once the futures top early November's key structural highs near 1225.00, but any attempts at boarding via camouflage will be more perilous than usual -- though perhaps less so if attempted prior to the breakout.

We should like to see the futures push higher today and tomorrow if bulls are to remain in charge at least until New Year's. Although I gave permabears little to hope for in today's commentary, what I did not mention is that even though yesterday's rally reached a 1207.25 rally target with two ticks to spare, it manifestly lacked the guts to tack on the extra five ticks it would have taken to surpass the look-to-the-left peak labeled in the chart. This won't necessarily be fatal, but it does hint ever so slightly of cowardice on the part of buyers.  Let's see how things go for the rest of the week before we make any crucial judgments.

A Hidden Pivot support at 1152.25 is equivalent to the Mini-Dow target at 10760 that I've recommending bottom-fishing in today's touts.  It will remain valid as long as 1206.00, the point 'c' of the pattern, is not exceeded to the upside. It should also be regarded as a minimum downside objective for the near term. _____ UPDATE (12:31 p.m. ET):  Stocks are on a bloody rampage today, short-squeezed dementedly from the opening bar on news that 93,000 "jobs" supposedly were added in November (about 160,000 shy of the monthly number needed over the next two years merely to recoup jobs lost during the Great Recession).  The squeeze has pushed the futures to a so-far high just above 1206.00, with bullish implications for perhaps the remainder of the year.  If the rally goes just a little higher today, exceeding the 1208.75 peak from November 12, bears should throw in the towel till 2011.

The painfully constipated price action of the last two weeks argues against our trying to swing-trade this vehicle. It's for day traders only at the moment, and my bias from a Hidden Pivot perspective is mildly bullish, since no "external" lows on the daily chart have been breached in the pullback from the 1224.50 high recorded on November 5.  Night owls should check out a very minor corrective pattern on the 5-minute chart that could conceivably allow tightly stopped bottom-fishing at an 1183.00 pivot. _______ UPDATE (3:14 a.m. ET): The futures dipped to 1181.25 before the bounce we were expecting happened, but the best you could have done was grin and bear a five-tick ($62.50) loss if you'd traded this one without camouflage.  The countertrend rally is perfectly clear on the five-minute chart and should be assumed headed for at least 1194.75 once midpoint resistance at 1188.00 has been surmounted. 

The futures are entering their third week of tedious consolidation after having created a potent bullish impulse leg of daily-chart degree. If there seems to be a contradiction in this, there is:  It is like revving a dragster to the redline, only to have it smoke rubber for a full minute.  My hunch is that the futures will feint lower this week to resolve the standoff, then rally moderately into early December, though probably not till year's end. Most immediately, there are no juicy trading opportunities that I can discern, only the prospect of a herky-jerky move lower in the days ahead.  Night owls looking for a camouflage entry spot Sunday night will not have found much as of around 9 p.m., since price action thus far has added up to no more than meaningless noise. Nevertheless, the futures can be bottom-fished at 1180.25, stop 1178.75, provided the low is reached by no later than 1 .m. Eastern. ______ UPDATE (12:21 p.m.): The recommended trade was a non-starter, since the futures didn't make it down to 1180.25 until 5:30 a.m. The decline reversed Sunday night's overcooked short-squeeze, putting the futures on course to reach an 1175.75 downside target that was easily visible on the 5-minute chart (a=1200.50).  The fact that the target was overshot by 3.50 points in the opening hour suggests more weakness ahead, even though the futures are rallying at the moment.