E-Mini S&P

Apologies.  With anticipation of a shortable rally top at 1146.50 building to an orgiastic frenzy, I failed to see another, even more succulent, opportunity just above it at 1149.75.  There's always the possibility the downturn will come from the lower target and we'll miss the trade, but in this case I don't think so.  Take a gander at the chart if you want to see what perfection looks like (and notice the multibar pause precisely at the 'p' midpoint).  An 1151.25 stop-loss is advised on the trade, presumably on Monday -- and let's keep this one in the family, please, since the more widely disseminated and anticipated a target, the less likely it is to do what it ought. ______ UPDATE (2:01 p.m. EST):  Ha-ha. The futures topped at 1148.00 -- at an hour of the night when no one was watching anyway.  This is one of those times when we must view the game with a sense of humor -- so grin and bear it!  And yes, the futures will return to the scene of the crime, but the 1149.75 pivot will no longer have that virginal quality that made it so appealing in the first place.  If you had the initiative and imagination to have shorted in the topping range, profit-taking on half the position was/is in order, since the pullback has amounted to ten points so far.  A 1048.25 stop would be logical for the rest.

Knowing that this phase of the bear rally will end at 1146.50, or very near there, has taken the fun out of watching.  Still, I like the idea of shorting at that price with a stop loss as tight as three ticks.  As always, I would encourage improvisation, especially since the target has been drum-rolled so loudly and for so long.

The micro-spasms that have been inching this brick toward 1146.50 have proven too difficult to trade, even applying the most deftly leveraged camouflage. The 1146.50 target -- pronounced "eleven-forty-six-point-five-oh" by South Jersey natives -- seems about as certain as the next high tide at Fundy, but you'll probably do better shorting there with a three-tick stop-loss than attempting to jump aboard at these levels.  One daring way to do this would be to hang out an 1146.50 offer on the opening and hope for a short squeeze in the first 10-15 minutes of the session.

The 1132.50 rally target posted here last week nailed yesterday's top, providing an opportunity to get short a tick off the top ahead of a piddling, 6.50-point pullback.  The futures got second wind enough to go nowhere, making a secondary high at day's end that exceeded the opening-hour spike by a single tick.  This action has become far too tiresome and coy for me,  but before it puts me to sleep let me reiterate an 1146.50 target that seems only slight less likely to be achieved than the sun is to rise yet again in the East.  This number is of course short-able with the most daringly tight stop-loss you can abide, but if you have designs on catching the perhaps more lucrative ride north, you'll have to supply the patience and the camouflage.

The gratuitous, unmitigated nuttiness of the final 30 minutes of the New Year’s Eve session is being somewhat recanted Sunday night via a timid, five-point rally to entice shorts. Night owls can test the water bottom-fishing at 1112.50, stop 1111.75, but if the stop is hit we could see a subsequent fall to at least 1101.25. On the 5-minute chart. Hidden Pivot aficionados will find the possibility of a camouflaged “buy” on a pullback from a tick or two above 1120.50.

The 1146.50 target proffered here last week implies the futures will rally at least 26 points between now and New Year's Eve. A lesser target at 1132.50 is still short-able with a stop-loss as tight as 1.00 point. However, trading the rally to that number is preferable, even if it will not likely br possible to do so with risk:reward fixed in the 1:3 ratio that guides all of our trades. Another way to look at it is that the rally is likely to continue pulling back by at least several points following each new marginal high of 1.00 point or so.

The futures are bound for at least 1146.50, presumably by New Year's Eve.  Another Hidden Pivot that will be playable when the futures take out yesterday's high is 1132.50.  That will be my minimum upside objective on a breakout, and it is shortable with a stop-loss as tight as 1.00 point. Longs from these levels therefore have a potential 14-point ride, but camouflage will be tough to come by with the bear rally now scraping highs.

This soporific excuse for a rally has been paradoxically fascinating to watch over the six weeks during which it has metastasized.  The observable fact is that there are practically zero died-in-the-wool bulls buying shares. Instead, even if an inch shy of brain death, the stock market remains oh-so-coy, impelled higher mainly by two factors:  too much financial liquidity chasing too few investment alternatives; and, short-squeeze opportunism driven by whatever shred of economic news could conceivably be spun as even faintly positive.   And what of the sell side?  Actually, there are no sellers.  Would you short this market? Neither would I.  Is there a speculator even financially able to short this market?  Probably not. Anyone with the brains and the guts to do so aggressively would have been beggared by the rally months ago.  Considering the foregoing, we shouldn't be surprised to see the broad averages continue to climb even as the U.S. edges toward the next, presumably spectacular, economic cliff.  To wrap up today's analysis, let me mention that it is for a reason that I would not short the E-Mini S&P at these levels: to wit, every pattern save the one associated with the long-term bear market is pointing higher.  I now see no end to the rally till at (the very) least 1146.50. We can short there till our heads cave in -- of course with a stop-loss as tight as a miser's squint in the noonday sun.

Yesterday's gap-up opening pointedly took out a midpoint resistance at 1104.50, all but guaranteeing a follow-through to the Hidden Pivot's 'D' sibling at 1120.25.  It can serve as our minimum upside objective for the near-term, but boarding the uptrend will have to be catch-as-catch-can, since the opportunity may be past by dawn.  If you miss the ride, shorts from 1120.25 are encouraged, stopped as tight as you can handle.