E-Mini S&P

Let's make DaBoyz push this hoax past 1118.00 (1122.75, basis June) before we jump on the bullish bandwagon.  That number corresponds to a peak along the wall of May's decline, and a rally that exceeds it would create a sufficiently robust impulse leg on the hourly chart to warrant our bemused attention if not our respect. Keep in mind that the rally would need to be unbroken on the hourly chart from the time it passes the "starting line" represented by twin peaks #1  at 1102.75.

I'm just about analzyed-out after yesterday's four-hour open house. The E-Mini S&Ps were especially tiresome, since I had miscalculated the rally target by two ticks.  I gave a 1085.50 objective during the session, only to discover near day's end that the actual target should have been given as 1086.00. This made a crucial difference -- at least, initially it did -- since, according to our custom, a 1085.50 objective would have required a 1086.25 stop-loss; whereas a short from 1086.00 would have required 1087.25.  What a relief it was, then, when the futures poked their rabies-infested snout up to 1087.75 in the closing seconds of the day, hypothetically stopping out any shorts from the higher number.  I don't think I could have gone on living if the futures had plummeted on Friday's opening without ever having gotten above 1087.  That would mean I'd have missed shorting the top we've been looking for so obsessively because of a calculator error (whose cause remains undetermined). And now, what can we expect for Friday?  As I mentioned in today's commentary, the futures looked too feisty at day's end to suggest they've exhausted buyers at 1087.75.  Also, the pattern from which the 1086.00 target was derived was so absolutely picture-perfect (see chart) that I doubt the target would have been exceeded, even by a tick, unless the futures were indeed headed higher.  For that reason, we should use the 1092.50 target shown in the chart to get short with a 1093.25 stop. ("If at first you don't succeed..."). One final note:  It is of course more lucrative to get long ahead of the rallies than to continually and serially try to impede the speeding freight train.  In the context of the current rally, which, in nearly-untradable fashion, has been gathering momentum overnight and gapping higher on the opening, the best way to get aboard is to simply jump on

My apologies for yesterday's lapse, since I had Wednesday's intraday high, 1077.75, nailed within two ticks during the weekly tutorial session. In the future, I would encourage those who attend these hour-long sessions to spread the word in the chat room if any tradable opportunities emerge.  A goal of the classes, besides teaching, is to  send participants out the door with a tradable idea for that day. That was especially true yesterday, since we'd been itching to get short by hook or by crook. To borrow from Rahm Emanuel, no opportunity to short this 15-month-old bear rally should go to waste.  So where does that leave us, now that the downtrend has progressed 25 points from Wednesday's high? Essentially, competing with a zillion other traders who are itching to get short.  Yesterday's whipsaw was as much as  telling us it won't be easy, so we'll work harder at it today, staying close to the lesser charts intraday rather than hanging on a one-size-fits-all number disseminated the night before.

Shortly before 2 a.m.,the futures had tripped an entry signal at 1057.50, implying they're bound for its sibling midpoint at 1062.50, or perhaps to 1072.50 if any higher. I'll suggest passing this one up, since latecomers are being given far too much time to get long.  The trade might have been a go intraday using a "time stop" designed to take you out of the position if the move from the 'X' entry price to the 'p' midpoint did not materialize in, say, two or three minutes.

DaBoyz have joined forces with nervous shorts and sundry other whack-jobs this evening to recoup (so far) 7 points of Monday's loss on the usual, almost non-existent, volume. This doesn't much affect the bearish targets we identified here yesterday -- 1022, 1014 and 997 in succession -- but it could set up a good opportunity to short this hog into illusory strength on Tuesday.  Night owls can try a more delicate maneuver, shorting 1057.00 with a 1057.75 stop-loss.  This  very speculative trade is based on the pattern shown in the chart._______ UPDATE (1:26 a.m. EDT):  This trade has been an easy winner so far, since the futures head-faked to our number exactly, 1057.00, stopping out the 1056.75 high made two hours earlier before dropping back to 1054.00.  Cover half the position between 1054.00 and 1055.00, using a fixed stop at 1056.75 for what remains. (I'll assume two contracts for your further guidance.) If the futures fall to 1052.00, cover another contract and swing for the fences with the short contract that's left.  _______ UPDATE (3:33 a.m. EDT): A  spike to 1061.00 stopped us out overnight for a theoretical gain of about $300.

The futures have been down as much as 14 points Sunday night. This would be just a routine shakedown if not for the fact that the so-far low exceeded  the key bottom at 1055.50 recorded ten days ago.   A subsequent rally has generated a little short covering, but the action looks so feeble that one might infer bears are not very nervous about starting the week with big stacks of chips on the "Don't Pass" line.  I've drum-rolled a target at 1022 in today's commentary, and you can nibble there with a tight top-loss, but keep in mind that a breach of that Hidden Pivot by more than 1.50 points would imply more downside to at least 1014, or possibly even to as low as 997 (a back-up-the-truck number for bottom-fishing).  FYI, bulls would need to hoist this cinder block above 1088 today to mount a credible threat.

A modest rally target at 1118.50 still awaits the short squeeze that alone can carry the day for nitrous-sniffing bulls.  It's obvious that ordinary, bullish buying -- Kudlow and perhaps his aunt from Minneapolis -- was not nearly sufficient to push the futures through Monday's ephemeral highs. More such supply awaits near 1122 and will give DaBoyz an incentive to milk the Friday Effect for all it's worth, so be prepared for a possible eruption of silliness in the final 30 or so minutes of the trading week. _______ UPDATE: With the Dow trading just above 10,000, I posted a minimum downside target of 9775 in the chat room.  The equivalent for this vehicle 1052.25.

I had thought the 1093.00 rally target furnished here yesterday would handle whatever silliness bub-bub-bubbled up.  Apparently not.  The number was the Hidden Pivot midpoint of the bullish pattern shown, and its breach portends more buying to its 'D' sibling at 1118.50. That number can be chiseled in stone, incidentally, since, as far as I can surmise, nothing short of a collision between Earth and an asteroid will prevent it from being reached. Since the trajectory of the rally is unlikely to be a straight line -- especially with Monday's highs in the way -- turning the move into opportunity will be your task. I'd suggest betting the pass line in any case, since waiting to short the trend at 1118.50 with our customary three-tick stop-loss sounds so pat that I'd be heartbroken if it didn't work perfectly.

Discussing the flotilla episode tonight with a friend who puts out his own market letter, he asserted that the force of events these days has completely overshadowed the markets. I agree, and so no matter what I am forecasting for a given day, you should understand that it is all within the context of  securities markets that in recent months have done little more than screw the pooch perhaps 95 percent of the time.  That said, let me note nonetheless that the E-Mini futures should be presumed capable of  1093.00 if they launch overnight without having breached 1067.25, the low as of around 12:20 a.m. EDT.  Looking at a bigger picture, the 1022.75 downside target first broached here eons ago is still valid in theory, but one cannot help noticing that the futures are having a devil of a time correcting down to that threshold.  I'm tempted to assume a bullish bias for the next few days as a result, but one also cannot ignore the fact that the imbeciles charged with deploying OPM have been somewhat restrained in their enthusiasm for buying, given fresh evidence each day that the whole bloody friggin' world is indeed falling apart.