E-Mini S&P

The bull market has gone vertical, suggesting stocks are in a blowoff. Where will it end?  We'll hazard a guess simply because it's irresistible fun, and because one of these days we're bound to get it right. Let me therefore offer 2953.50 for the June contract, or 2974.25 if any higher. Both of these Hidden Pivots seem likely to show stopping power, even if equally compelling rally targets got bulldozed on Tuesday.  The lower number is especially appealing because of the precise stall at the midpoint pivot with which it is associated (see inset), and the perfection of the 'mechanical' buy signal 40 points below these levels a week ago. ______ UPDATE (May 2, 9:58 p.m. ET): A just-missed rally target at 2969.50 was an important enough failure to imply a small chance that a major top is in. I mentioned this target earlier but did not drum-roll it because I did not want to queer its usefulness as a place to get short. For now, though, use the 2892.20 target shown in this chart as a minimum downside projection. An overshoot could be telegraphing an acceleration of the downtrend.

The bull market has gone vertical, suggesting stocks are in a blowoff phase. Where will it end?  We'll hazard a guess simply because it's irresistible fun, and because one of these days we're going to get it right. Let me therefore offer 2953.50 for the June contract, or 2974.25 if any higher. Both seem likely to show stopping power, even if equally compelling rally targets got bulldozed on Tuesday.  The lower number is especially appealing because of the precise stall at the midpoint Hidden Pivot with which it is associated (see inset), and the perfection of a 'mechanical' buy signal 40 points below these levels a week ago. ______ UPDATE (Apr 28, 2019): A very major, 3095 target for the cash S&P Index introduced in today's The Morning Line sits above these targets, although it hasn't pre-empted them. How much stopping power they show remains to be seen. _______ UPDATE (May 1, 10:09 p.m.): Let's ignore today's freakish reaction to non-news from the Fed. It was not bearishly impulsive, although a print today at 2914.00 would change that in a small way.

A 2929.00 rally target disseminated here a while back remains in force despite Wednesday's plunge into an air pocket. The futures had climbed steadily overnight, only to give it all back and then some in less than an hour when health insurance stocks came under heavy selling pressure. The biggest of them, UnitedHealth Group, the second most heavily weighted stock in the Dow, plummeted 7% in a blink as Crazy Bernie talked up Medicare-for-All. Although he is certain to persist as an irritant, it's unlikely to affect the broad averages for more than a few days, if that long. Meanwhile, even though the 2929.00 target still looks like a lock-up, that doesn't make it any easier to profit by trading with the uptrend. The chart shows how a lesser target at 2924.50 was missed by an inch, denying Rick's Picks subscribers a chance to get short with risk tightly under control. Assuming the futures reverse and continue higher, it won't be much easier to get long for the ride.  Buy-and-hold positions are simply not possible when marginally higher daily peaks are separated by 20-point dives.

A longstanding rally target at 2929.00 has served  us well, keeping us confidently on the right side of the trend. It now looks extremely likely to be reached, but the question is whether it will be decisively exceeded. I expect the Hidden Pivot to show stopping power, probably tradeably so, but I would recommend going short there only if you have made at least 3-4 points of profit on the way up.  You'll need all of it to provide an ample stop-loss on entry. I say this because the C-D rally leg begun on March 25 provided no opportunities to get long 'mechanically'. This attests to the power of the move, and it raises the odds of a thrust to even higher levels regardless of whether a correction is needed first to get a running start. Even a slight breach of 2929.00 would make a run-up to new record highs all but inevitable. That would not negate my skepticism that the powerful move begun on December 26 has been a bear rally. Too many agree with this judgment, however, to make a move to new highs an easy short.

The 2929.00 target shown has served as a minimum upside objective for the last two weeks (notwithstanding some micro-adjustments I made that I am now withdrawing for simplicity's sake). Although there is nothing in the chart that should cause us to think the target won't be reached, the labored hovering at the secondary pivot this week suggests the futures might have to pull back to get a running start at D. The correction could come all the way  down to 2824.18 (the green line) without affecting the bullish look of the daily chart. In fact, that would trip a buy signal that I'd view as opportune. A fall merely to 2859.25 would trigger an "old-style" mechanical buy that we'll consider if and when that number is hit. For now, though, I'd suggest staying out of harm's way as the futures nervously bide their time.

The futures slightly exceeded the secondary pivot of the pattern shown, implying odds are good for a follow-through to the pattern's 2927.25 target. This is slightly lower than the 2929.00 target given here earlier and comes from using one-off A=2727.50 rather than the original 'marquee' A at 2726.50. The adjustment is small, but I wanted to provide a very accurate target in case you want to reverse a long position and go short there with an extremely tight stop-loss. I am recommending this only if you've made money on the way up, since the pattern looks too obvious to offer an easy-money reversal._______ UPDATE (Apr 8, 5:06 p.m. ET): Since this is The Bull Market That Wouldn't Die, we should always keep a higher target in mind in case the one we're using gets creamed. In this case, I'll suggest using the 2969.25 Hidden Pivot shown in this chart.  I am also revising the target flagged above back to 2929.00 for reasons that I won't bore you with.

The 2866.25 target where the futures topped recently has the potential to be a show-stopper for reasons noted here earlier, including the perhaps too-obvious enticement of the powerful impulse leg it created. But because this bull market has been chugging along for ten years, defying expectations, we should be prepared for the next record-breaking upthrust. In that regard, a decisive thrust exceeding the 2859.25 midpoint pivot shown would have very bullish implications, since it would put the pattern's 2929.00 target theoretically in play. We'll watch cautiously from the sidelines in the meantime, trading this vehicle with a mildly bullish bias until such time as p is reached.______ UPDATE (April 1, 10:14 p.m. ET): Buyers easily exceeded p, putting p2=2894.13 in play as our minimum upside objective for the near term.

It's tempting to think last week's high at 2866.00 (click on inset) will mark the final gasp of an exceptionally powerful bear rally.  If so, it will have occurred in a place where we might have expected Mr. Market to spring a nasty trap on bulls and bears alike. The latter would have thrown in the towel and covered short positions when the S&Ps broke out over the last two weeks above three descending peaks recorded last autumn.  As for bulls, they are probably still drooling at the prospect of new all-time highs, since the 2866 peak that preceded Friday's selloff came within 3% of that threshold. Both could be proven wrong, although it might take a few more weeks before we know for sure. Friday's cascade on Wall Street felt particularly scary because it came amidst an onslaught of downbeat news concerning the dramatic slowdown in the global economy.  Growth in Europe and China seems ready to plummet and take the U.S. economy with it.  There was also an unsettling development in the financial sector as borrowing rates on 90-day T-bills exceeded those on the Ten-Year Note. The last time the yield curve inverted was in 2007, just before the financial system and stock market crashed. A rate inversion has preceded every recession since 1975. A further concern was that yields on German bonds swung negative, begging the question of whether it's too late in the game for so urgent and desperate an attempt at stimulus to work. AAPL a Dead Duck Even if the global economy were to miraculously rebound, U.S. stocks still look like an insane bet at these levels. The geniuses who are paid absurd sums to throw Other People's Money at a small handful of stocks must be thinking the same thing -- that the

Urgent short-covering catapulted the future to within a single tick of the 2866.25 target shown in the chart (click on inset). Odds that this Hidden Pivot resistance will turn out to be the top of a bull market that just entered its 11th year seem remote, so we should assume that even if there's a pause or tradeable pullback from it, buyers will be back again soon and presumably bound for D2=2924.50 (also shown in chart). The pattern from which I've extrapolated these numbers meets my strictest criteria, so you should consider the targets and the various Hidden Pivot levels precise, reliable and useful.  A further implication is that a swoon to the green line (2776.00), however unlikely, should be regarded as a buying opportunity.