E-Mini S&P

The crucial buying power of shorts was mostly spent by mid-session, leaving the futures to fend for themselves. They gave up relatively little ground thereafter, though, presumably because reality tends to lag wilding sprees such as yesterday's by an exasperating day or two.  There is probably enough uncertainty and confusion in the E-Minis' price action to make nearly any camouflage pattern work, but I'll leave the discovery and exploitation of such opportunities up to you. The question of up or down today looks like a coin toss to me.

The futures came within a hair of a resistance peak recorded last Thursday before chickening out yesterday (see chart). This was a less-than-subtle foreshadowing of the 15-point selloff that followed. If it were a gold chart, I'd suggest watching the 5-minute bars for the very first sign of a bullish turn. But this is a stock index, and I feel no compulsion to give it the benefit of the doubt, at least not now. Buyers are showing no enthusiasm whatsoever, and shorts seem more difficult than usual to spook. My minimum downside objective for the moment is 1039.75, a Hidden Pivot support that is better used as a bearish objective than as a place to bottom-fish.  It can be fished  nonetheless, stop 1038.75. ________ UPDATE (8:51 a.m. EST):  Apparently unembarrassed by the yellow stripe we'd painted on their back, DaBoyz have squeezed the futures sufficiently, probably, to give shorts palpitations on the opening. I'd like to see a print at 1092.00 today, however, before we lend our begrudging respect to their characteristically unseemly, and presumably doomed, enterprise.  That  would turn the hourly chart moderately bullish, though no moreso. (Moreso would require at least 1103.75.)

The downside target equivalent to the one I've provided for the Dow in today's commentary lies at 1021.00, and I have trouble imagining that it won't be reached sometime this week.  The midpoint Hidden Pivot with which it is associated is now resistance, and it seems tonight to be containing whatever ebullience may have spilled over from Friday afternoon.  I'd tout 1061.00 as a tightly stopped short if this were happening intraday, but there is too much feral activity on a Sunday night to risk it.  However, pivoteers who can find camouflage enough to whittle the stop-loss down to just a few ticks are encouraged to give it a try, shorting with the microtrend.

Another day spent in conjugal embrace with the pooch, with no previous peaks of any significance surpassed. But notice how DaBoyz did not allow the futures to fall very far either. This suggests they are simply marking time until the conditions are right -- which sooner or later they will be -- to invoke a short squeeze.  Astute pivoteers might notice a succession of closely spaced, descending peaks made yesterday -- a veritable forest of potential camouflage opportunities if an A-B rally should pull back from any of the in-between spaces. Your diligence and patience in monitoring this situation could yield a quick pay-off, since immediate upside potential is to 1107.75.

Yesterday's rally was NOT impulsive on the hourly chart, having turned chicken-hearted just shy of a one-off peak at 1101.75 recorded last Thursday.  It may seem paradoxical to infer that the futures are demonstrating their weakness with each new upthrust, but that's the way it looks to me.  My recommendation is to short this chazzerai  each and every time you get a chance, using micro-tight stops above the respective 'p' midpoints and 'd' rally targets.

We don't want to guffaw too raucously at yesterday's rally, since it could it could clamp its nasty little fangs around our ankle on Tuesday before we've even had time to enjoy a rare moment of skepticism.  But notice in the chart nearby how the rally did not lift the futures above a single prior peak on the hourly chart.  True, it would have taken a pretty powerful move to do so -- but that doesn't mean we should lower the bar.  Let's set it at 1112.00 today to warn when buyers have turned serious, since a print at that price will have exceeded two "external" peaks and a third "along the wall" for good measure.  Nimble practitioners of camouflage needn't be so finicky, however:  You can try getting long on a pullback from above 1093.75, the location of a (very) obscure peak on the three-minute chart (January 28, 9:45 a.m. EST).

The futures have lurched back to pseudo-life early Sunday evening but have offered little evidence otherwise concerning their intentions.  A 1043.75 Hidden Pivot target is one of several vague downside possibilities, and although its sibling midpoint support at 1073.50 did not provide a precise confirmation, the midpoint has been sufficiently brutalized that we can infer lower prices are at least somewhat more likely than higher. Alternatively, the futures would need to rally to 1112.00 by Wednesday to turn the hourly chart unambiguously bullish, but it would require only 1077.75 today to accomplish that on the five-minute chart.

The futures were breaking down around 1 a.m. EST, bound for a Hidden Pivot support at 1061.25 after having trounced a midpoint pivot at 1075.00.  There was one additional, minor support at 1066.50, but it is only  at the lower number where I'd suggest bottom-fishing with a stop-loss at 1060.25.   If DaBoyz are preparing to spring a bear trap, it would clamp shut with a push above 1083.75.

Tiresome as these mini-explosions have become, we can't afford to ignore the possibility that one of them is going to trigger a real short squeeze. That could happen as early as today if a follow-through to yesterday's wilding spree pushes the futures above 1103.00.  The accompanying chart shows how it would convert a garden-variety impulse leg into one with serious power.  From there it would take just another nine points to take out a third external peak, presumably greasing the path upward through week's end. _______ UPDATE (10:40 a.m.):  Ha-ha, very funny. The futures head-faked their way to 1103.50 overnight and then dropped dead.  Go figure.  Perhaps, for our watchful vigil, a nursemaid is called for, not a technician?