E-Mini S&P

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.

The sinuous beauty of the pattern shown should make the E-Minis very predictable in the days ahead. Specifically, if the futures pop decisively above the red line, a midpoint Hidden Pivot at 2728.38; or better yet, close for two consecutive days above it, they would become a very strong bet to reach the 2809.75 target. Moreover, we could expect a pullback from within a point or two of that number -- one that aggressive traders could use to get short with a stop-loss as tight as six ticks. The foregoing is based on Monday's precise stall at the red line. Let's see how it plays out. I will advise if any low-risk trade set-ups occur along the way. For now, be aware that a retracement to the green line (2687) would trip a 'mechanical' buy signal, stop 2646.75. I am not specifically recommending this tactic, however, because of the $2000-per-contract entry risk. Stay tuned to the chat room if the opportunity to substitute a low-risk alternative entry method such as 'camouflage' should arise. _______ UPDATE (March 6, 7:15): The futures have fallen somewhat beneath the 2687 threshold where' I'd suggested that traders place a mechanical' bid, stop 2646.75. In practice, I am still advising you to substitute a 'camouflage' entry set-up that would use an uptrending abc pattern on the 3- or 5-minute chart. This is the least risky way I can advise to get aboard, but it will require the diligent attention of, presumably, night owls. The buying pattern is a pretty good one, and that means if our 'mechanical' trade fails to produce a profit, we should grow more cautious toward stocks. Click here for the chart.

The futures generated a robustly bullish impulse leg before the final bell on Friday, although the pattern shown looks like it will need a somewhat lower point 'C' to become tradeable. For the time being we can use the A-B leg shown to project a rally target in the early going on Monday. If the futures should pull back by a few points to start the day, my gut feeling is that a conventional entry at the subsequent 'x' will produce a winning trade. _______ UPDATE (Mar 5, 10:14 EST): The futures opened on a gap down Sunday afternoon, but the lower point 'C'  this produced did little for us. If you entered 'conventionally' at X, the subsequent rally to p=2687.50 would have allowed you to take a partial profit there and lower your break-even to 2674.00. When ES dipped below that price you'd have been stopped out five hours after initiating the trade with a loss of perhaps a tick or two on each of two contracts. As of the moment, my short-term bias is bearish, based on the 15-minute chart where A =2721.75 on 3/1.

Monday's maniacal leap brought the futures to within 29 points of the 2809.75 target drum-rolled here earlier.  There is little doubt this Hidden Pivot resistance will be reached, although I expect a potentially tradeable pullback from within a point or so of it. That's because the pattern I've used to calculate the target is so clear and compelling. However, if the March E-mini S&P were to push past the target with ease, that would imply there is significant buying power remaining to be spent.  Regardless, I will be monitoring the lesser charts closely once stocks are again in record-high territory, since anything above the old highs would create ideal conditions for a wicked trap designed by Mr. Market to snare bulls and bear alike. Putting my heightened cautiousness aside, the futures already look like a good bet to reach the 2988.75 target shown. That would equate to a Dow rally to 28245. ______ UPDATE (Feb 27, 7:22 p.m.): The selloff generated a bearish impulse leg on the hourly chart with the futures 20 points shy of a 2809.75 target that had looked like a lock-up. The yellow flag is out and would turn red if the selloff takes out last week's 2682.00 low. ________ UPDATE (Mar 1, 10:04 p.m.): The breach of the green line is now decisive, implying the futures are bound for a minimum 2615.00, the midpoint Hidden Pivot support of a bearish pattern projecting to as low as 2440.25.

Bulls carried the day on Friday, clearing a path to a least 2809.75. Although the upside penetration of the 2745.88 'midpoint pivot' was slight, it should be sufficient to keep the buying momentum going in the days ahead.  There are many ways to get long for the ride, but the one-size fits all recommendation would be to buy a pullback to the green line (2714.00), stop 2680.75.  This implies entry risk of about $1700 per contract, and so I am not recommending the trade to the faint of heart or those with accounts under $25,000. But the initial risk can be reduced to perhaps $50-$75 theoretical using alternative entry set-ups such as 'camouflage' or 'counterintuitive'.  Stay close to the chat room if you're interested, since many who frequent the room are familiar with these tactics. They can be useful for circumventing the possibility that the futures will move higher without pulling back to the green line.

Although the Dow fell 254 points on Tuesday, you can see that the selling inflicted precious little damage on the E-Mini S&Ps. They would need to fall to the green line to trigger a 'counterintuitive' short, and that is what I expect to happen. I usually wait for Hidden Pivot levels to get hit before I hazard such predictions, but I am so cautious most of the time that I hope you'll pardon me just this once for going out on a limb, even if I'm wrong.  Actually, I am prepared to turn hell-of-bullish if the futures surprise by rallying above the 'external' peak at 2763.00 (see inset), especially within the next two or three days.  Since getting short with a sell-top at 2695.66 would imply entry risk of nearly $3000 per contract, I would suggest doing so only with a 'camouflage' set-up. Stay close to the chat room for guidance on this in real time, assuming the signal hasn't been triggered in the dead of night. Once decisively below the green line, the March contract would become an odds-on bet to reach 2637.16, a midpoint Hidden Pivot support associated with a target at 2520.16. If that last target is achieved, the Dow, currently trading for around 24,964, would be nearer 23,000.  There's a bigger, bearish pattern that could conceivably be in play if the futures close beneath 2579.41 for two consecutive days. Its target is 2404.66, which would equate to a drop in the Dow of around 3000 points. _______ UPDATE (Feb 21, 6:04 p.m.): Today's FOMC-induced selloff tripped a 'counterintuitive' short at the green line (2695.66) with immediate downside potential to at least 2637.16, the Hidden Pivot midpoint. Seasoned Pivoteers will notice, however, that the futures ended the day in a good position to set up a 'counterintuitive'