E-Mini S&P

The market's failure to fall yesterday came as a surprise to me, but perhaps because there are no sellers around who still have their genitals, stocks simply needed a day to work off a mildly oversold condition. In any case, heavier-than-usual selling Monday night was creating numerous Hidden Pivot targets below.  My favorite is the 1051.00 target of the pattern shown in the chart.  The sibling resemblance between k-A and B-C is what drew my eye, and we may get confirmation of this relationship when ES hits the 1077.00 midpoint -- my minimum downside target for the near term.  Night owls are advised to try bottom-fishing there with a very tight stop-loss, since DaBoyz only rarely take stocks down more than that overnight unless they are expecting a selling avalanche at the opening bell. Keep in mind that the oh-so-coy strategy of the klismaphiliacs who work the night shift is to find a level at which selling dries up, and then to hold stocks at that level or above until the opening bell.  Occasionally they guess wrong, however, and they get buried by the unanticipated onslaught of sell-at-the-market orders that have built up just prior to the opening.  (Note to Harry and other eagle-eyed pivoteers:  Yes, I know the k-A segment I've notated in the chart ignores the true point 'A'.  However, when I speak of a sibling resemblance between k-A and B-C, it is the length and breadth of the overall patterns that I am comparing.)

The hog traders, having short-squeezed as much of a rally as they can get away with on an eventless Sunday night, have leveled off the futures at +5.00 points around 1 a.m. EST.  Presumably, they are waiting for the microspeck of good news that would allow them to double the power of the squeeze; but if none comes, expect to see the futures ease lower between now and Monday's opening. There are too many downside targets to choose from for high-odds bottom-fishing, but I'd pick 1074.25 if someone held a gun to  my head. FYI, pivoteers: A=1138.25 (15m, Jan 21); B=1101.00,C=1111.50. Shorting with the trend looks like it will be very difficult, since bears are already mildly on the ropes of the minor (up)trend. _______ UPDATE (3:13 a.m.): Drop down to the two-minute chart to find the 1099.75 target that has coaxed the futures still higher. (A=1090.50, from Friday.) The futures have gotten with a tick of it, but there are no handholds on the lesser charts for forecasting anything higher, so I won't try.

This is the nastiest break we've seen in two months, and we should treat it as though it were a possible resumption of the Mother of All Bears.  The low of yesterday's plunge slightly exceeded a 0.618 retracement of the rally leg begun in mid-December, creating a bearish impulse leg on the 240-minute chart in the process. This is doubly bearish and suggests the selling has yet to even warm up. There are no useful Hidden Pivot targets that I can offer you at the moment, but I'd suggest using 1139.25 on the 240-minute chart for a point 'A' when the down-pattern now evolving develops a usable corrective rally.

The pattern shown in the chart leads nowhere no matter how you slice it.  That's two weeks' worth of paint drying that you see, and far be it from me to guess when something is going to change.  A semblance of a rally reappears if you take a few steps back, and it even produces a rally target of sorts:  1163.50, a tad below an earlier target at 1166.00 (same pattern lower point 'C'). I'd infer the futures are on their way there if they can close above the 1144.50 midpoint for two consecutive days.  More immediately, traders can try bottom-fishing at 1129.25, stop 1128.50, provided  1138.25 is not exceeded to the upside first.  If the stop-loss is hit, consider it a warning of more slippage to as low as 1120.50. _______ UPDATE (9:17 a.m. EST): A thrust to 1138.25 overnight invalidated the trade as given, although not the downtrend. The futures would now have to pop to 1143.25 for bulls to take charge.

My expectation of a big stock-market rally in the wake of a Coakley loss appears to have been a step behind Wall Street.  Index futures are down slightly at 10:35 p.m., even though Scott Brown has been declared the winner.  It's a clear case of  "buy the rumor, sell the news," although I can't imagine the selling accelerating overnight, since the news itself, with its implication that a do-nothing balance has been restored to Congress, could not possibly be construed by investors as any worse for America than a filibuster-proof Democratic majority.   In any event, the path of least resistance is bound to be higher, which would put in play an 1164.50 rally target. It's midpoint sibling, a Hidden Pivot resistance at 1145.50, is putting up a fight at the moment, but I doubt that it will be able to resist the bullish tide come morning.

Friday's New Moon plunge turned a boring 180-minute chart a smidgen less so;  moreover, the MLK-Day rally Monday night was threatening to make the picture interesting, even. The pattern shown in the chart, sloppy  'A'   and all, yields a Hidden Pivot midpoint support at 1128.50, and that's where I'd suggest that you try bottom-fishing, stop 1127.90, if the opportunity should arise. This plan will remain viable as long as the point 'C' of the pattern, 1137.75, is not breached by some puny spoiler-of-a-rally. ______ UPDATE (10:17 a.m. EST):   The overnight correction to 1126.25 took out any midpoint support we might have identified, stopping us out in the process for a trading loss of three ticks (i.e., $37.50).  Although this hinted of more weakness to come, the futures have instead whipped around and rallied 15 points, presumably for some news-driven reason. Could prospects of a Brown victory in Massachusetts be driving stocks this early in the day?

All signs point higher, but boringly.  The nearest rally target where you might attempt to get short with a laughably tight stop-loss is 1149.50.  There are other, middling targets below it, but 1149.50 is the last shortable number before ES must be presumed bound for 1166.00, a Hidden Pivot resistance broached here earlier. ________ UPDATE (9:13 a.m.):   Overnight weakness was sufficient to create a bearish impulse leg on the hourly chart.  As of this moment, the follow-through projected to at least 1139.00, but potentially to 1135.50 if that Hidden Pivot midpoint is breached. Both targets will remain valid as long as 1142.50 is not exceeded to the upside.

It took two months for a well advertised Hidden Pivot target at 1149.50  to be reached,  and so we ought to be impressed by the fact that the futures appear to be getting second wind just three days later. If and when they break out above 1149.50,  a Hidden Pivot at 1166.00 will make a logical target. It would be subject to confirmation by a possible stall at its sibling midpoint, 1147.00.

With punk earnings from Alcoa as an excuse, it should have been a piece of cake for DaBoyz to execute a vicious shakedown yesterday. Instead, valiant sellers struggled for yardage with the Dow down barely 100 points but gained only tough inches.  With nowhere else to go, the averages swung around, recouping more than half  the day's losses by the bell.  They were presumably in good position to  put the squeeze on bears yet one more time on Wednesday.  If that happens and you hanker to play, I've sketched out a path of excellent camouflage for you to follow in the accompanying chart.