E-Mini S&P

To properly judge the staying power of the rally, we should put aside its spectacular nature and focus, simply, on impulse legs. If you didn't know that today's surge was one for the record books, and if someone had told you the chart shown consists of one-minute rather than hourly bars, you'd be less intimidated by what has occurred.  We'd also know to hold the applause until such time as the surge exceeds a couple more external peaks, especially without pausing for breath. If we should see buyers exceed peaks #2 and #3 as effortlessly as they got past #1 today, we'd have more reason to infer that this bear rally is just getting started. Let's kick back for now and see what the next couple of days brings.

The 2327.50 target shown is a slender reed to lean on, but it's all bulls have at the moment. It coincides with a downside target in AAPL that lies just beneath Monday's close, so we might look for the the two to sync up in the early going on Wednesday. A three-tick stop-loss is all it's worth if you bottom-fish, but the opportunity to do so will depend on how this vehicle greets the day. If the support is easily exceeded I have no alternative target to offer you at the moment -- only the inference that sellers could be ready to romp once again.

I can offer a 2431.50 downside target for now, but it is a minor one, more suited to the needs of scalpers than to long-range forecasters. Regarding the latter, the chart shown is hardly a picture of good health. The breach of an important Hidden Pivot support at 2476.25 Thursday was modest, but it was still sufficient to imply that another big down-leg is coming once the futures have corrected current excesses. If 2431.50 evinces no tradeable bounce, take it as a sign that DaBoyz are not be eager to take a bullish stand as the week draws to a close. If shares are getting whomped and there is no short-squeeze rally in the final hour, my guess is that the Dow will finish down a thousand points or more. ______ UPDATE (Dec 23, 6:15 p.m.): Considering how badly the 2431.25 target (see above) and a 2432.75 midpoint support from a lesser pattern got crushed on Friday, odds of more slippage to at least 2357.50 are high. You can bottom-fish there aggressively if you've been short for at least a part of the ride south. Here's the chart.

The pattern shown is well-formed and compelling, with a 2480.75 target that lies 3.3% below these levels. It was not possible to project an equally high-quality target for the expiring December contract because its point 'B' low did not exceed a prior low as this one did. The visual differences are slight but nonetheless significant with regard to their respective accuracy and usefulness. Initial downside penetration of the 2652.63 midpoint support was weak, so we should be alert to the possibility of a significant upturn from somewhere north of D -- perhaps even from this morning's 2553.50 low. Odds of this would shorten if the futures are able to push above 2616.75 today.  That is where a minor but technically important 'external' peak lies, and its breach to the upside would signal a trend reversal capable of getting legs. If it happens, take it as a sign that the FOMC announcement due out Wednesday will be perceived as very bullish -- sufficiently so to trigger off the well-anticipated Santa rally -- or if you will, a Santa dead-cat bounce.______ UPDATE (Dec 18, 8:51 p.m.): See my comments in today's The Morning Line for a detailed outlook for Wednesday and beyond. Most immediately, downside targets at 2504.25, then at 2480.75, will remain in force unless a rally exceeds, respectively, 2576.25, and thence 2824.50 (yes, you read that last figure correctly)._______ UPDATE (Dec 19, 8:56 p.m.): A so-far modest bounce has occurred from a 2489.50 low that missed my 2480.75 target by 9.25 points. Ordinarily the failure of a downtrend to hit its mark would be mildly bullish, but only when the subsequent bounce starts exceeding external peaks on the intraday charts. A small one sits just above at 2519.00, but I'll want to see a more important one at 2568.00 exceeded

Traders thumbed their noses at G7 on Monday, pushing stocks higher even as G7 headlines made the threat of a global trade war seem palpable. Their indifference was so blatant that I am taking a contrarian view looking looking out 3-5 days. Specifically, the September contract would trip a 'counterintuitive' short if it falls to 2730.00, the green line. (Note: the trigger could migrate upward if the futures rally from here.) The signal would be especially enticing if this were to occur by Thursday or sooner. Because the trade would risk more than $3000 per contract initially, you should be thinking of an alternative entry tactic if the opportunity arises -- meaning either a 'mechanical' short or a 'camouflage' trade. Ask in the chat room at the appropriate time if you are uncertain about how to do this. ______ UPDATE (June 13, 4:21 p.m.): The week's price action thus far has slightly raised the short trigger to 2731.75. If you're game to try using camouflage to get short way ahead of the signal, I'd suggest using a camouflage set-up on the 5-minute chart or less, since the end-of-day selloff generated a robustly bearish impulse leg on the intraday charts. ________ UPDATE (June 14, 10:32 a.m.): With the futures in vertical mode this morning, there have been no set-ups for initiating a camouflage short of any consequence.The trade recommended above will remain viable, subject to possible adjustment if a somewhat higher high is recorded. _______ UPDATE (June 14, 9:21 p.m.): Traders spent most of the day giving back half of the modest gains short-covering had gifted them with in the first hour. The move was bullishly impulsive on the intraday charts nonetheless, so by all means  greet the day with a smile in your heart. If the futures move lower early in

The precise stall at p=2750.25 will make this an easy call:  If the 'hidden' resistance is breached, you can bank on a further rally of at least 75 points to D=2825.50. It's always possible, of course, that buyers will chicken out on the first attempt. But if they push past our benchmark by 15-20 points and then pull back to the green line, that would set up a very appealing 'mechanical' buy, stop 2674.75. Notice as well that this latest rally surpassed a key external peak at 2744.00 recorded back in March. That makes the rally very bullishly impulsive -- yet another reason for a strong bullish bias here, even if a correction intercedes for a few days this week. _______ UPDATE (June 6, 10:33 p.m. EDT):  The trade mentioned above could come into play, since today's upthrust exceeded the midpoint pivot by 25 points.  If you trade the E-Mini S&Ps and you're keen on leveraging this set-up, please let me know in the chat room, where real-time guidance is possible. ________ UPDATE (June 7, 11:00 p.m.): The 2825.50 target remains valid, but if the futures go any higher than today's 2779.75 peak, I will cancel the mechanical bid at 2712.50. _______ UPDATE (June 10, 11:10 p.m.): I've raised the possibility in today's commentary that bad news emanating from G7 could cause stocks to reverse the rally of the last two  weeks. If so, here's a chart that shows how far the futures could fall. A decline to the green line (2715.94) would trip a theoretical short to p=2652.13.

There should little that is unfamiliar in today's chart, which we've considered dozens of times since stocks broke sharply lower in February.  Punctuated by occasional, wild price swings, stocks have been grinding along ever since, meting out growing dollops of frustration to any trader, investor or forecaster who would seek to benefit from the ongoing drama (or, mostly, lack thereof).  Today, however, I want to share one simple observation that is as straightforward and free from emotional bias as I can make it. To wit, the S&P 500 (using the E-Mini S&Ps as a vehicle) became a 'mechanical' buy when it fell to the green line on March 22. That is bullish, plain and simple. The 'mechanical' trade implied is a specialty of Rick's Picks because it has worked so consistently for subscribers. Without going into the proprietary details of why the 'mechanical' buy shown is such a beautiful specimen, I'll say only that it leaves little room for doubting bulls, let alone for permabearish skeptics like myself. A key feature of such set-ups is that they excel at handling the scary, second-wave dive that so frequently interrupts otherwise very-bullish-looking charts. In this case, the all-but-obligatory dive took the E-Minis down by nearly 10% in March, narrowly missing a theoretical stop-loss that would have triggered just beneath 2532.50, the pattern's point 'C' low. 'Mechanical' Indicator Unintimidated A very similar pattern has replicated itself many times in other stocks -- all instances where presumably even the most steadfast bulls would have thought twice about sticking around. The most persuasive instances of recent note came in CRISPR Therapeutics, as well as in some of the more popular bitcoin trading vehicles before they went brain-dead. Bottom line: The E-mini S&Ps are not only on a long-term buy signal, they look likely to achieve

Pivoteers may have noticed that today's sell-off tripped a 'counterintuitive' short at the green line (2692.00).  At least one bold subscriber had staked out a position in advance based on my earlier note that the Dow looked as though it was fixing to lay an egg when stocks opened Sunday night.  As indeed it did. Even though the subscriber said he'd cashed out his DIA put position for a quick $7500 profit, it would appear that holding a few puts for a swing at the fences could conceivably produce some additional gains. In any event, based on the CI trade signal, we should expect the weakness to continue down to at least p=2645.75 in the days ahead. If you prefer to trade against the swings, you could try bottom-fishing there with a 'camouflage' set-up.  I'd suggest using an abc reversal pattern on the 5-minute chart or less, if and when the E-Minis get within 2-3 points of p.

There is little point in getting all worked up about technical subtleties at the moment, since the very simple key to the chart shown lies in bulls' conspicuous failure to surpass the 2744.25 peak after three weeks of trying. Even if they are able to get past it in the week(s) ahead, that would not mitigate the obvious weakness they have displayed so far. Presumably, their ability to make headway after doing so would be very limited -- almost certainly falling shy of new record highs.  Bears are wholly enfeebled as well, so get ready for a potentially long, boring stretch that will satisfy no one. If, in a year, the broad averages are trading about where they are now, don't be surprised. _______UPDATE (May 21, 5:39 p.m.): A day of huffing and puffing failed to lift the futures above the key peak noted above. DaBoyz may succeed at this in the days ahead, but don't be impressed with their bluff unless bears lose their cool. Short-covering is what pushes markets through ALL significant resistance, and it can never be ruled out entirely. _________ UPDATE (May 22, 6:43 p.m.): A mildly bearish day changed nothing in the outlook given above. _____UPDATE (May 23, 7:42 p.m.): Zzzzzzzzzz.  Zzzzzzzzzzz.  Zzzzzzzzzzzzzzzzzzz.  Zzzzzzzzzzzz.