E-Mini S&P

A minor rally target at 2811.25 has kept us steadfastly on the right side of the trend -- profitably so for subscribers who stuck with a 'mechanical' trade detailed here Thursday morning. (It triggered at 2770.25 but was too slow to develop to be called an easy winner.) If the target is decisively exceeded, that would shorten the odds of more upside to 2851.75, a Hidden Pivot of larger degree that first appeared here on February 10. The futures have taken an ambitious leap Sunday night to 2803.25, but it's not possible to say at the moment whether this may have exhausted short-covering for the time being. _______ UPDATE (Feb 25, 5:53 p.m.): Buyers slightly exceeded the 2811.25 target. The 2.75-point overshoot will add slightly to the bullishness of the chart, since a pattern this clean ought to have topped within no more than a tick or two of our objective. First, though, a correction. It could come down to as low as 2763.00 without negatively impacting the picture. _______ UPDATE (Feb 27, 9:54 p.m.): If the engineered swoon to 2775.00 today was the correction, then the futures are headed up to 2818.50 on Thursday.  Short there only if you've made at least a small profit on the rally. _______ UPDATE (Feb 28, 9:29 p.m.): Zzzzzz. No change.

We've been using an ambitious, 2851.75 rally target to keep our minds off reality, but more immediately there is 2789.25, a Hidden Pivot that I expect to produce a tradeable pullback. My recommendation is to get short there only if you've profited from the uptrend. Elsewhere on the home page, I've reproduced a graph that shows how the Dow is nearing levels where, from a visual standpoint, a rally to new record highs will begin to look inevitable. As much could be said of the E-Mini S&Ps, which lie just shy of a series of three peaks made just before December's steep plunge. It's more than a little tempting to think an ascent to new all-time highs would set up a devastating bull trap. This is something to ponder as the stock market does the seemingly impossible, climbing a mile-high wall of worry. ______ UPDATE (Feb 19, 6:02 p.m.): Feeble buying pushed the futures to 2787.50, less than two points from the target flagged above. It remains valid, but any progress above it would likely encounter resistance at 2795.91. That Hidden Pivot should be the end of the uptrend, at least for a short while._______ UPDATE Feb 21, 8:39 a.m. ET): Upthrusts have continued to exceed minor Hidden Pivot targets, suggesting the futures want to go higher. The rally has been untradeable if keeping risk:reward at 1:3, since each new marginal high has given way to a pullback greatly exceeding the incremental gain from peak-to-peak. Here's a way around it, a mechanical set-up that would allow entry via a limit bid and a single stop-loss. Be aware, however, that the initial risk on a four-contract position would be $2800, for a potential gain of as much as $8200 if D=2811.25 is reached. As always, you could cut this down significantly

The pattern shown, with a 2851.75 rally target, is unappealing because of the 'sausage-y' impulse leg. However, because there are no good alternatives, we'll use it for now to calculate a minimum upside objective and some buying levels. The set-up so far is not conducive to a mechanical bid, and things are unlikely to improve sufficiently to provide an easy entry point. Our bias should remain bullish for now nonetheless, with a focus on intraday opportunities. _____ UPDATE (Feb 12, 7:43 p.m. ET): Just to get ahead of any possible "surprises," let me mention that a plunge to 2672.35 from these levels would trigger a 'mechanical buy', stop 2612.25. _______ UPDATE (Feb 15, 9:06 a.m.): Here's a fresh rally target at 2789.25. It is derived from shifting to a lower and more compelling point 'A'.

Like many of you, I've been eagerly awaiting the day when this powerful bear rally drops dead. Instead, AAPL has rallied with a vengeance, drawing a thousand doomed stocks into its vortex. Yes, the rally is a hoax. And yes, the Masters of the Universe have used it to distribute as much stock as possible into the hands of rubes, pensioners and widows. Under the circumstances, I've been a reluctant bull all the way up, duty bound to follow the mechanical logic of my charts. However, the effort has worn me out, and that's why I've selected the thumbnail chart today that I did (click on inset). It gives me the wherewithal to say that maybe, just maybe, the insidious promoters of the Big Bounce have breathed their last. That Ominous Cough? This is a logical inference, given that the E-Mini S&Ps have begun to roll down from a midpoint Hidden Pivot at 2732 where buyers were likely to cough ominously, if cough they have. The pattern itself is unfortunately not of the highest quality, and so I am prepared to see stocks come roaring back next week -- led, of course, by AAPL, whose iPhone troubles have suspiciously melted away in recent weeks. If that is what happens, I hope you will pardon this digression. Think of it as a fleeting moment of sanity in a crazy world.

DaBoyz are nothing if not risk averse, and so there will always be days like Wednesday, when the short-squeeze thrusts they use to force stocks higher will pack barely enough energy to lift a feather. That describes the session's soporific price action, an inside day that left a 2760.25 target unchanged as our minimum upside objective. (Note: That's slightly higher than the number given here earlier because I've moved an erroneous coordinate.)

The 2728.25 rally target we've been using remains viable and has kept us on the right side of the move -- which is to say, in a profitable groove and out of trouble. Buyers stalled very precisely Friday at a lesser Hidden Pivot at 2715.50 (see chart inset), but the subsequent pullback has been shallow and implies they'll be back at it when the new week begins. Although I'd suggested earlier that you consider shorting 2728.25 with a tight stop if you've made at least $1000 on the way up, I have no great enthusiasm for the trade. Moreover, I'll suggest raising your sights to 2759.00, the 'D' target of this pattern, which was created by sliding the point 'A' low down a level. I am confident the target will be reached because the point 'B' high of the pattern decisively exceeded the imposing 'external' peak at 2592.00 recorded in mid-December, as a good impulse leg should.

The futures ended on a promising note after spending most of the week tracing out a 60-point swoon. The 2612.50 low of the move narrowly missed tripping a 'mechanical' buy at 2607.31. This suggests there was too much buying power for the futures to fall all the way to the green line where such bids become active. Correspondingly, the 2727.50 target is an better bet to be reached than it would have been following a touch-and-go takeoff. Pivoteers who recall the old-style rules for setting up a mechanical trade at the red line can try it, but you'll be on your own if you do. _______ UPDATE (Jan 28, 9:43 a.m.): Bullish as things looked at Friday's close, stocks are getting whomped today, reminding us yet again that the market develops a fresh case of amnesia each and every night, especially over weekends. The futures would trip a 'mechanical' buy signal at 2607.25 (stop 2567.00), but I'm recommending the trade only to those who know how to convert the set-up to a camouflage one. ________ UPDATE (Jan 28, 4:12 p.m.): I'd recommend canceling the mechanical bid because price action looks so feeble. However, you can still attempt the trade via camouflage if you can identify a 'camo' set-up that brings entry risk down to six ticks or less per contract. _______ UPDATE (Jan 29, 9:27 p.m.): Index futures have gotten less lift from tonight's short-squeeze in AAPL than I might have expected. Regardless, the 2727.50 target (2728.25 when corrected) given above will remain viable unless 2567.25 is exceeded to the downside. _______ UPDATE (Jan 30, 7:06 p.m.): Today's stall precisely at the D target shown is unlikely to keep the futures from reaching the 2728.25 target given above. ______ UPDATE (Jan 31, 5:26 p.m.): The futures were steaming toward the

Buyers shredded a key resistance on Friday, leaving little doubt about whether they'll achieve the 2728.25 target shown in the chart. It lies 57 points above, and if and when the futures get there, the Dow Industrials, which settled at 24,706, will be trading for around 25,200. In an update sent out Thursday night I'd suggested getting short if stocks rallied strongly to end the week but pulled back in the final hour. The fact that they barely pulled back at all will have left bears badly on the ropes, where they will remain unless some horrific headline over the weekend bails them out. In the chat room before the close, I mentioned taking a small short position, but this was just a token contrarian bet based on the rally's unstoppable look.______ UPDATE (Jan 22, 10:46 p.m. ET): Tuesday's plunge brought a tinge of doubt to the 2728.25 projection, but it will remain valid in theory until such time as sellers exceed the point 'C' low at 2567.25. Actually, ES would become a mechanical buy in theory if it comes down to 2607.50 (the green line in the chart)._______ UPDATE (Jan 23, 5:09 p.m.): The futures bounced from 2612.50, five points above our tripwire for a mechanical buy. It remains viable, although I'll suggest paper trading this one unless you know how to convert the set-up to 'camouflage' in order  to cut the initial risk of about $2000 per contract down to as little as $60.

Buyers blew past a promising rally target at 2636.50 on Thursday, implying they’re spoiling for more.  In fact, the effort exceeded virtually every Hidden Pivot resistance identifiable on the intraday charts, including one at 2642.50 shown in today's chart (see inset). Although the pullback from the intraday high was sharp, bulls had recovered most of it by early evening, leaving shorts badly on the ropes for Friday. All of this makes a move to new recovery highs seem inevitable — so much so that a trader might well have asked at Thursday's close, “How can I go wrong taking a long position overnight?” It is when we start thinking this way that a bell should go off warning us to consider the opposite — i.e., a punitive selloff from out-of-the-blue.  Bottom line: We’ll be hell-of-bullish at the opening, but ready to unfurl the yellow flag at the first sign of a stall.