E-Mini S&P

Hidden Pivot voodoo nailed El Diablo's most diabolical swings last week almost to-the-tick, allowing subscribers who were tuned to this vehicle to crush it on trades from either side of the market. The week ended with a key support at p=4324.25 holding precisely, so any predictions about what, exactly, will come next would be premature. As always, a decisive breach of p would portend more downside to the 'D' target -- in this case 4062.50, the number we've been using to avoid getting suckered by bear rallies.  Meanwhile, we should not fear the inevitable short squeeze unless it pushes this hoax above the 4512.75 'external' peak recorded on February 12. ______ UPDATE (Feb 23, 6:06 p.m.): Even the village idiot could see that all rallies are short sales these days and that they are occurring mostly in the dead of night. This is when the Master of the Universe (a.k.a., DaBoyz) are most easily able to manipulate stocks higher for distribution on extremely thin, short-squeezed volume. Bears should be careful as the selloff approaches the 4190 'secondary' pivot of the large, bearish pattern that projects to 4062.50. Here's another view: the presumably fragile neckline of a big head-and-shoulders formation. _______ UPDATE (Feb 24, 11:17 p.m. ):  A dead-cat trampoline bounce rocketed off a low 40 points from D=4062.50. The low occurred about midway between p2 and D, a 'discomfort zone' that is too unreliable to leverage. A run-up to the green line would trigger a 'mechanical' short, but only a one-level ride should be attempted; any more would be greedy. Here's the chart.

Because the steep selloff that ended the week was driven by news from Kiev, we should view it as corrective. I've implied as much in the current Morning Line commentary, which notes that no one ever went broke buying stocks as they plummeted on some distressing headline. Friday's dive terminated precisely at the 'D' target of the small pattern shown in the chart, but still lower prices seem likely before the 'rumor' of a Ukraine invasion is actualized by Russian tanks and troops. We should therefore focus on p=4323.25 of the larger, bearish pattern, since that is where the futures are most likely to head on Monday.  Bottom-fish there in the usual ways, but let's remain open-minded to the possibility the midpoint support will give way. Depending on how badly, this could portend a test of January 24's bombed-out low at 4212.75. _______ UPDATE (Feb 14, 5:15): Candy-ass bears evidently were so unnerved today by rumors that Putin might be willing to negotiate that they failed to follow through on Friday's promising selloff. Add in the divergent, 'green' finish of AAPL and Bertie (bitcoin), and it is hard to imagine stocks going anywhere but sideways-to-higher this week. _______ UPDATE (Feb 15, 10:47 p.m.):  DaSleazeballs are still in charge, and they mean to take this hoax higher whether there are buyers or not. All of yesterday's gains occurred on zero volume around 4:00 a.m.  What more do you need to know? _______ UPDATE (Feb 17, 10:35 a.m.): See my recent Trading Room posts for an actionable idea that I aired yesterday and slightly revised a moment ago. _______ UPDATE (Feb 17, 5:55 p.m.): Barring a bounce from p2=4359.63, the futures appear headed down to the 4318.00 target of this pattern. Any profits booked on the way down should be applied to bottom-fishing there

Short-covering extended the stock market's bounce for a second week, but without generating any impulse legs on the daily chart. On balance, bears still appear to hold the edge, mainly because of the steep pitch and power of January's sell-off.  We should give bulls wide berth nonetheless, since the week ended with an earnings blowout at Amazon and a 20-1 stock split for Google shares that will enable the riff-raff to own the stock just like the big boys. Let's greet the new week from the sidelines, until we get a clear sign of where things are headed. _______ UPDATE (Feb 9, 8:24 p.m. EST): Signs this week have been clearly bullish, which suggests that the bear rally, if that's all it is, is doing its job effectively.  If the move achieves new record highs, which looks like no worse than an even bet at the moment, we may be pondering the same question even then: is it for real, or not? Instead of worrying about it or trying to guess how and where a top might occur, we should simply trade with the trend. Nudge me in the chat room if you want further guidance during regular hours.

Last week's elongated bars imply bulls and bears were more or less evenly divided as they fought for their respective lives near the bottom of January's plunge.  You can use the 4500.75 'D' target of the reverse pattern shown as an upside target as the week begins, but I am not recommending shorting there unless with 'camouflage' cover limiting your risk to no more than relative pocket change.  The pattern worked well for 'mechanical' bids at the green line, but using it again will likely be pushing your luck. ______ UPDATE (Jan 31, 7:43 p.m.): ES poked its snout above the 4500 target for a few minutes, then pulled back to cruising altitude so that DaBoyz can await further instruction. It will come via the desertion of sellers, short-covering bears uncomfortable with the recalcitrance of the pullback or, most likely, a combination of both.  ______ UPDATE (Feb 1, 5:40 p.m.): The way bears have obligingly placed their testicles in Mr. Market's vise could make one wonder how on earth the bull market will ever end. DaBoyz twiddled their thumbs for most of the session, effortlessly holding stocks aloft until shorts capitulated in the final hour. The latter now look like dead ducks -- worse than dead ducks, actually, since they are probably hoping tomorrow will somehow be different. _______ UPDATE (Feb 2, 8:56 p.m.): Use this sumptuously gnarly pattern for all purposes -- and yes, it does imply a 'mechanical' bid at x=4503.25 is warranted if you know how to 'camo' your way aboard for no more than $800 of theoretical entry risk (on four contracts). ______ UPDATE (Feb 3, 9:35 p.m.): The futures are in a steep short-squeeze following after-hours news that business is just hunky-dory at Amazon. Wall Street is crazy for companies that show sufficient pricing power to sodomize their

Bears were probably more frightened than bulls when Monday's carnage ended. The final half-hour of the session featured an 80-point rally so steep that it would have left shorts too dazed to stand their ground. However, the bigger picture suggests cyclical forces may finally be on their side. It features an 11% drop in the S&Ps over the last eight days that exceeded no fewer than five prior lows. This is a quite powerful impulse leg, and it is how we might expect a bear market to begin.  For now, though, it seems highly unlikely to be quickly undone by short covering, let alone by bulls eager to buy the dip. This time, many of them will doubtless be praying for an opportunity to exit at at least somewhat higher prices rather than salivating over the prospect of going all-in on further weakness. This doesn't mean things will get any easier for bears, who may be sensing a chance, finally, to make some real money. Regardless, whatever opportunities arise will be reducible to the common denominator of the Hidden Pivot Method: impulse legs. Stay tuned if you want to see how we make sense of them and trade them, no matter how nutty stocks get. _______ UPDATE (Jan 25, 10:23 p.m.): 'Mechanical' trades work best in violent markets, especially when the entry looks scary. Check out this evening's chat room gambit involving a bet against a nasty after-hours sell-off. It produced a quick winner worth at least $1,700 per contract. _______ UPDATE (Jan 26, 9:10 p.m.): The night shift dirtballs can't always steal with impunity. Tonight, for instance, although they have pulled their bids in order to see where sellers exhaust themselves, they must still be on their guard for an onslaught of market orders at the opening. Use p2=4240.50 in

Buyers caved after failing to get much boost from a rigged opening. Sellers were played to exhaustion an hour into the session, but when the obligatory short squeeze sputtered out before lunch, the game was over for bulls. The surprise was that the downtrend in the final hour failed to hold a promising Hidden Pivot support. This put the futures on track to hit the 4372.50 target shown in the chart.  This would ordinarily be a can't-lose place to try bottom-fishing intraday, but not on a Sunday evening if the futures open weak.  That would waste an especially opportune 'gnarly' pattern, but as we know, there will always be another.  Following a decisive breach of 'D', the next logical stop on the southbound express would be 4305.25, derived from converting point 'C' on the chart into 'A' of the new pattern.

The S&Ps are in a topping pattern, a middling head-and-shoulders formation with the potential to send the mini-futures down to 4300 once the neckline at 4500 is broken. Presumably, that would be just the first installment of a full-blown bear market.  I seldom pay attention to the H&S because it pops up so often on charts of all time frames, but this one is too shapely to ignore.  As noted here earlier, it will take several more weeks to develop a symmetrical right shoulder. This implies there are at least one or two more dramatic swoons to play out, possibly tradeably. I've added a Hidden Pivot pattern to the chart with two immediate trade possibilities: mechanically shorting a rally to the green line (x=4685.63); or bottom-fishing with a 'camo' bid near p2=4577.88. The latter looks somewhat riskier, and that is why I am suggesting that you use a camouflage entry. Nudge me in the chat room if you're interested.  I am somewhat surprised that the last rally did not quite reach the 4752 trendline where we were eager to get short, but there is not enough evidence to suggest we were front-run. Regardless, let's continue to avoid patterns that are obvious, since every Tom, Dick and Harry is trying to get short at these levels. _______ UPDATE (Jan 18, 10:36 a.m.): The futures have bounced robustly from within two ticks of p2 pivot noted above. This provided an opportunity to get aboard for a quick profit on four contracts of as much as $2,700. Review the chat room discussion beginning with my 9:53 a.m. post to see how the trade unfolded in real time. If you want to learn how to do it yourself, as many subscribers have, you should attend the Wednesday tutorial sessions and immerse yourself in the

The supply-and-demand logic of the chart shown predicts a potentially important top at 4752.00. This is not a Hidden Pivot resistance, but rather a price along a trendline that explains itself. The very gentle slope of the line is determined by two peaks where anyone who bought got crushed by what happened next. All of these losers have been praying for the last month or so to get out 'even', and they may just get their wish. But I doubt they'll come away with much of a profit, since there's a dome of copious supply just above the line (which can be shorted with a stop-loss as tight as you can handle.) There is no way buyers will get past the trendline on the first try, and if their efforts continue for a few more weeks, that would eventually create a head-and-shoulders pattern.  It would require perhaps 20-25 days to accomplish this, assuming the right shoulder develops with the symmetry common to H&S formations. The foregoing doesn't negate the 4907.75 bull-market target I've been drum-rolling here for quite a while, but it does give us a more modest objective that could prevent an important downturn from somewhere shy of 4907.75 from catching us unawares. _______ UPDATE (Jan 13, 6:43 p.m.): We got chumped out of an enticing short when buyers failed to push this hoax up to the trendline. The line seems too eclectic to have been front-run, but we'll never know for sure. There's still tons of resistance there in any event, so we'll have to figure out another way to get short if and when the futures rally back up to the line. In the meantime, I expect a tradeable bounce from very close to p=4631.75 in this chart to confirm the pattern and its 4524.00 downside target.

We'll treat last week's stall-n-dive as just an annoying detour on the way to a 4907.75 rally target that still looks likely to be reached. It is odd nonetheless that sellers were unable to put this gas bag down on Friday with a concerted push toward D=4585.25 of the small 'reverse' pattern shown.  Powell had ratcheted up his tapeworm twaddle to the max earlier in the week, and although T-Bonds acted as though they actually believe the guy, stocks evidently know better.  Still, ES is in the throes of a 'Matt's Curse', having peaked almost precisely at the 4803 secondary pivot, When this happens, odds of a corrective crash through the 'C' low -- in this case 4485.75 -- supposedly rise. _______ UPDATE (Jan 10, 5:33 pm.): It took two tries, but a trade I recommended in the chat room at 10:53 got traction just ahead of today's 90-point rally. Several subscribers appeared to have jumped on it, so I tracked the position and provided detailed suggestions for managing the risk as the day wore on.  Check it out and see whether you could have followed my advice. It included the use of a 'dynamic' trailing stop, a concept explained in my running commentary.  I'd suggest moving to the sidelines for now, since the session ended with bears hanging on the ropes.