E-Mini S&P

An old target at 1233.75 is still valid in theory, although it surprised me that DaBoyz could not reach it in the heavily manipulated opening minutes of yesterday's session.  The downturn that ensued instead projects to 1201.50, subject to a possible bounce from the midpoint at 1206.75.  Night owls can try bottom-fishing that last number with a three-tick stop-loss, but it looks too close to a structural support formed by yesterday's 1206.25 low to be considered opportune.  _______ UPDATE (8:14 a.m. ET):  The futures spent the night screwing the pooch, a pursuit they seem likely to continue on Wednesday. Since the upward feint marginally exceeded the point 'C' of the pattern used to project the two correction targets, we'll scrap the trading plans detailed above.

We caught a small but theoretically profitable upthrust yesterday using the 'd' target of an abcd correction that unfolded during a pre-opening briefing.  Price  action was especially flat -- more like a slither than a trend -- but we can only infer it is a consolidation for the next all-but-inevitable QE2 push higher. A well-discussed rally target at 1233.75 still obtains, but I am reluctant as yet to tout another at 1259.75 that implies a rally of much steeper pitch  (although I'd consider it a done deal if the futures were to gap above 1226.00 on the opening)  That is the point 'X' entry trigger of the pattern that projects to 1269.75.)   The provenance of both targets is shown in the accompanying hourly chart.

So far, Sunday night's five-point selloff in the E-Mini S&P looks almost as unconvincing as the one in Gold.  The futures are at the low end of an extremely tedious, seven-point range they 've been plying since early Friday morning.  The result is a sine-wave-of-a-snoozefest that has generated no impulse legs worth noting even on the lowly five-minute chart. My gut feeling is that the futures will need to hack and wheeze for another 2-3 days before they attempt to replicate the hysterical steepness of Thursday's QEII thrust.

I'm going to interpret this vehicle's immediate prospects as conservatively as Hidden Pivot rules will allow, paying close attention not to the big picture, but to the small one as defined by impulse legs on the daily and hourly charts.  Right now, on the daily, the futures are in the process of forming an impulse leg that could eventually generate a follow-through C-D leg of as much as 26 points.  It could be far more powerful, however, if buyers vault 1208 today, since that would open a path to a 40-point rally after this one has corrected.  The accompanying chart shows the narrow segment of price bars that are relevant at the moment.  By applying the rules rigorously, I aim to avoid getting fooled at this very crucial threshold, and to never be "wrong" about the trend for more than an hour or two.  The accompanying chart shows subtleties that can only be explained with a very lengthy text that would bore you to tears.  I have reproduced it nonetheless so that experienced Pivoteers can get immersed in the logic of it.  I warned here earlier that bears had better prepare to hibernate if 1196.50 is exceeded, as has occurred. However, I am unwilling to give bulls the benefit of the doubt unless they earn it, and even though QEII may turn out to be a catalyst for Dow 20,000, however implausible that may seem.

Shortly after 8 p.m. Eastern, election-night silliness has pushed the future as high as...1196.50, the precise number above which I'd implied it would be open hunting-season on bears. The hourly chart suggests the rally will hit a minimum 1205.25, which would roughly equal the 175-point opening I've projected for the Dow Industrials.  I'll recommend shorting the target with a stop-loss at 1206.25, but be particularly careful if the trade triggers in the dead of night.

That's twice now that the little s.o.b. has played peek-a-boo with the 1196.50 peak spotlighted in today's commentary. My gut feeling is that DaBoyz will eventually drop kick the futures through the goal posts, further hallowing this the Mother of All Bear Rallies in the record books.  In the meantime, although the constipated price action is theoretically tradable, I'll leave the devilish details to you, dear subscribers. Keep in mind that churlish, stupid, gratuitous price action such as we are seeing is ideal for camouflage day-trading, provided you are satisfied with bunting and hitting singles all day long.

The futures are up nine point Sunday evening -- for whatever dumb reason -- but it's not all innocent play, since the move has exceeded Friday's high, 1187.50, and thus sets up this vehicle for an even nastier short-squeeze at the opening.  The (very) crucial number is 1196.50, equal to an important peak made last April on the way down. If it's exceeded,  it seems likely the visually obvious peak at 1208.00 just to the left of it will be exceeded as well.

The futures are breaking down in a minor and uninteresting way at the moment, dropping out of a narrow sideways scuddle that began just after the bell. There are two pairs of targets: one of them with a 'p' midpoint at 1176.75 that is precisely where the futures are trading right now, and an 1171.25 point 'd';  and another with 1175.75 and 1169.25, respectively as points 'p' and 'd'.  A glut of small opportunities, you could say, but the most conservative of them would be to bottom-fish that last number with a three-tick stop-loss.  If you'd rather play for a bounce at the midpoints, camouflage tactics are advised.

It's discouraging to see the broad averages down so little when it appeared that the forces of sanity, decency and logic had bulls nicely on the run early in the session. Oh well. This vehicle ended the day with the creation of a strong impulse leg on the 30-minute chart (if not quite on the hourly), so we should brace for higher prices. If so, a midpoint resistance at 1180.75 should be considered "pivotal," since a breakout above it would portend more upside to as high as 1193.50. So far, however, the midpoint has with withstood the charge, turning the futures back from 1180.50.  Night owls looking for a way in should seek it on the one-minute chart, where subtlety and sideways tedium will have caused more than a few other traders to throw in the towel -- or doze off. ______ UPDATE (1:33 p.m. EDT):  Liftoff to a so-far high at 1187.50 came in the hour leading up to the opening, but the best time to have gotten aboard via camouflage on the one-minute chart was at exactly 4:50 a.m.  The pattern that took shape at that time is subtle perfection, including B and C coordinates formed from a single bar.