E-Mini S&P

Further tankage to the 2495.50 target shown seems a foregone conclusion, although the glacial pace of the descent is at times something to marvel at. Most of the distance will be traversed in mere hours, as we know, with the perhaps many days in-between working ceaselessly to disabuse traders of the notion that they can profit from something so obvious. Or is it? I'd temporarily shelve the bearish case if the futures were to rally above the 2744.00 peak that occurred on March 21. But anything shy of that would be just noise, as far as I'm concerned -- a side show to distract us from the possibility that, yes, maybe the bull market is finally over. However, we know not to let a mere rally to new record highs negate this suspicion.  In fact, and as I've mentioned here before, it would be the perfect way for Mr. Market to set the hook.  No matter what happens, I can assure you we'll never be so distracted that there will be any confusion about the trend.

Monday's low got nowhere near the 2544.00 Hidden Pivot I'd offered as a minimum downside target.  Although the futures dove 40 points, to 2602.00, in the opening hours of the regular session, this was simply to inspire fear in bulls who'd had such an easy waft higher overnight. When the June contract finally reversed upward around 11:30 a.m., it went on a 70-point tear that was virtually unbroken by any significant pullbacks. This tells us that shorts are caught badly and that the rally is likely to continue into the night.  The 15-minute chart shown suggests buyers will reach at least 2695.00 if they can blow past p=2675.25.

Sellers crushed the 2631 midpoint Hidden Pivot support shown in the chart, significantly shortening the odds of a further plunge to as low as 2456.50.  Any worse than that seems unlikely over the near term because the target is so clear, but we should use p2=2544 regardless as our minimum downside objective for the near term. A rally back up to the green line would trigger a 'mechanical' short, stop 2807.50, but it seems unlikely that we'll be gifted with such an opportunity. Under the circumstances, any shorts initiated Sunday evening or Monday morning should be based on downtrending 'camouflage' ABCs of lesser degree.  Start with patterns like this one, then zoom down to a 5-minute-or-less chart to create 'camouflage' entry set-ups with initial risk under very tight control.

The June contract was getting whacked hard Thursday night, down as much as 26 points earlier this evening.  This is bullish as far as it goes, since it suggests DaBoyz are desperate to exhaust sellers ahead of the opening bell.  That would allow them to goose stocks sharply higher in the opening minutes of Friday's session, using whatever short-covering panic they can stir up to push stocks to rich valuations before the bottom drops out again.  My hunch is that any buying will be too feeble to spook shorts and that the broad averages will be trading significantly lower than they are now when the week ends. The biggest short-squeeze rally we are likely to see will come in the final hour on Friday. That's because DaBoyz will not want to press their luck trying to get a major short squeeze going earlier in the day.

The futures finished well off their lows Monday, but that didn't negate the short sale that was triggered at the green line (click on inset).  We'll wait for a 'mechanical' signal before we jump aboard, but we can still use the 2631.88 midpoint pivot shown as a minimum downside target for the near term. This differs by less than a point from a downside target given here last week. We should also remain open-minded to the possibility that shorts will shoot themselves in the foot yet again, chasing this brick above the 2807.25 peak recorded on March 13.  That would be the fourth time they've stopped themselves out by exceeding a high recorded since early February's mini-crash. Otherwise, a plunge to the red line can tell us with a high degree of confidence whether the weakness begun in the final days of 2017 is the start of a bear market or just a garden-variety correction.  The former would become more likely if the initial breach of the red line is decisive. And if the red line were to be exceeded via a selling gap, that would raise the odds that a bear market had begun to about 75%, in my estimation. ________ UPDATE (March 20, 7:21 p.m. EDT):  An inconsequential day, it changed nothing said above. ______ UPDATE (March 21, 7:34 p.m.): And now, yet another.

The flatulence that ended the week rendered the markets too uninteresting, even, to keep us guessing.  We'd have a better chance of detecting excitement putting our ear to the ground at a cemetery. It was that kind of Friday.  I'd suggested here earlier that a dull day could be prelude to a 'Pearl Harbor attack' on Sunday night. Yes, that would be lovely indeed, since it's been a while since the Masters of the Universe have gotten more than slightly bruised, let alone bloodied. But it would probably take a very unsettling headline to start things rolling, since the charts themselves have practically flat-lined.  There's no point in our trying to predict the news, but please note that the usual mayhem -- i.e., "Shooter kills 117, film at 6:00!!" -- is unlikely to cause much of  stir in the heartless precincts of Wall Street.

Ordinarily I wouldn't make too much of the E-Mini's failure on Tuesday to reach the 2816.50 target shown, but it's worth mentioning for two reasons. For one, the pattern that produced the target is so clear and compelling that even a shortfall of two or three ticks should be taken as a warning sign.  And for two, I've gotten so accustomed to predicting higher and higher prices for this vehicle over the years that I am being extra careful about getting sandbagged when the broad averages finally do head sharply lower for more than the usual day or two. I am not predicting that this about to happen, but we'll at least give bears the benefit of the doubt for the moment. To be specific, I'll note that a further decline touching 2720.00 would make the June contract no worse than an even-odds bet to continue down to at least 2632.75. ________ UPDATE (March 14, 6:35 p.m. EDT): So far so good.  If an avalanche is imminent, today's moderate weakness left plenty of room for sellers to develop a full head of steam by week's end or early next. (Of course, a Sunday night 'Pearl Harbor attack' should always be viewed as a significant possibility.)  From a psychological standpoint, I like the fact that shorts betting on the ability of several important peaks recorded since early February's plunge to cap the rally have been stopped out no fewer than three times. _______ UPDATE (March 15, 6:24 p.m.): Today's sleep-inducing price action changed nothing in my outlook, other than somewhat reducing the odds that a serious decline will get under way before the weekend. Even so, if you're going to take a position home over the weekend, I'd suggest a small short rather than a long -- just to make things

The futures made solid progress Friday toward a 2809.75 rally target that has served us well. It was our minimum upside objective when the March contract was trading nearly 100 points lower. It also tripped a 'mechanical' entry signal last week that I noted at the time. The clarity of this pattern, and the way the impulse leg conformed perfectly to our rules, made it an excellent teaching example. If it continues to behave as it should, we should expect a tradeable top to occur precisely at the 2809.75 target or very close to it. _______ UPDATE (March 12, 5:24 p.m. EDT): The futures sold off moderately after topping overnight at 2800.50, just shy of our longstanding target at 2809.75.  It remains viable nonetheless, but the hourly chart would turn impulsively bearish on a print below 2730.00. [Note:  The equivalent target for the June contract is 2816.50.]

The 'mechanical' trade that triggered on Tuesday's dip just beneath 2687 has generated a paper profit of about $2000 per contract while also allowing a partial exit at the 2728 'midpoint pivot' shown. I haven't established a tracking position because subscribers seem to have used varying different tactics to leverage my initial guidance. It went out Monday night as a recommendation to buy the March contract if it plummeted to 2687.  As it happens, this number came within six points of catching the low of the recent selloff.  In theory, merely for having generated a 'mechanical' buy, the E-Minis are an odds-on bet to reach the 2809.75 target of the pattern in the chart.  Odds will further improve if buyers can push the futures above 2743.25 on Thursday.  That is the Hidden Pivot target of a lesser pattern (A=2672.50 on Jan 5), and it can be used for now as a minimum upside objective. As always, an easy move through a p or D Hidden Pivot resistance implies the trend is likely to continue. _______ UPDATE (March 8, 6:26 p.m. EST): Today's weak rally fell just shy of the 2743.25 bullish threshold noted above. Let's see if DaBoyz can hit it before the week ends.