E-Mini S&P

The futures made scant progress toward our 2439.00 target on what turned out to be a remarkably slow Friday, but they remain on track nonetheless for a push to that number shortly after Memorial Day.  The decisive move past the pink line, a secondary 'hidden' resistance, could set up a 'mechanical' bid there, stop 2398.50, but there would need to be an interval first that allows for a few more bars of 'hovering' before the futures can trip a proper buy signal via a pullback to the line. Since, on the 480-minute bar chart, this could take a few more days, you should consider using a 'camouflage' trigger to avoid missing a possible breakaway move on Sunday night or Monday. This wouldn't necessarily change our odds, but it would guard against missing the trade if the futures take off with a lurch after barely correcting.  _______ UPDATE (May 30, 11:58 p.m. ET): The futures have rolled down to the pink line, tripping a theoretical 'mechanical' buy signal at 2408.50, stop 2398.25. I'm not enthused about the trade, however, because it looks more weakness is needed to correct the steep run-up from the 2344.50 low of the Trump-is-failing dive of May 18. Under the circumstances, if you're looking to get on board for the next rally, I'd suggest crafting a 'camouflage' entry trigger with the 5-minute chart or less to avoid the implied initial risk of about $500 per contract. _______ UPDATE (May 31, 7:36 p.m.): The mechanical trade mentioned above is working, but not in the easy way we should prefer. We'll move to the sidelines until the nutty price action subsides. At the close, shorts were getting squeezed hard enough to provide at least a little carryover into Thursday.

Tuesday's tight spasms turned a secondary pivot at 2392.50 from resistance to apparent support, presumably for an imminent thrust to the 2408.50 target shown (see inset). Any higher would indicate 2417.75, an alternative target that also was flagged here yesterday. Night owls looking for a belated entry opportunity can use a 'mechanical' bid placed at the pink line (2392.50). But with such a modest profit objective as 2408.50 in mind, the initial stop-loss would have to be a relative tight 2387.00. Exit most of the position if 2408.50 is achieved, but keep a small piece of it for a shot at 2417.75 or higher. _______ UPDATE (May 24, 7:47 p.m. ET): This chart stretches the immediate rally threshold to 2439.00, but you should be prepared for a stall or possibly even a reversal from either of the Hidden Pivot resistance points note above in green. _______ UPDATE (May26, 1:10 a.m.): I still like the 24339.00 target -- not just as a minimum upside target for the near term, but as a place to get short with a stop-loss as tight as 2340.25 if it's hit near the end of Friday's session. You should do so without trepidation if you've been long for at least a part of the implied 28-point rally. A 'mechanical' bid at p2=2408.50 can be used to get aboard, assuming you are comfortable with the tactic. Be prepared for a stall at the 2417.75 pivot noted above.

The bullish pattern shown may not win any beauty contests, but it'll do just fine for projecting a minimum rally target at 2406.50 with 95% confidence. Using the lower point 'A' shown would yield a somewhat higher target at 2417.75, but in either case the trend has already pushed past the midpoint pivot with such force that a run-up to the respective D target is not in doubt. The lower number would be a new all-time high, but we shouldn't expect it or the other pivot to contain this rampage merely because they are such clear Hidden Pivot resistance points. Night owls looking to get long could try a 'mechanical' bid at 2376.50, stop 2365.75, but I doubt we'll see such a generous pullback ahead of the next surge.

I posted a 2390.25 rally target in the chat room Friday midway through the session, but the futures never quite got there. At the closing bell, they had failed in this relatively modest task by 2.25 points. In retrospect, as the chart makes clear, buyers felt no urgency about taking on the 2388.75 peak where Wednesday's refreshing but unfortunately short-lived dive commenced. Looking just ahead, I'll go out on a limb with a prediction that because short-covering bears have been temporarily squeezed for all they're worth, they will be unable to furnish sufficient buying power on Monday to push the broad averages into new record territory. But don't expect stocks to fall apart -- only to screw the pooch for a couple of days until bears have recouped enough confidence to be ready for another ass-whooping. Bears forced to cover short positions continue to be the main source of buying power in this bull market, but even they need a rest now and then.

It was of course unthinkable that the stock market would decline for two consecutive days. But bears shouldn't despair, since the short-squeeze rally was noticeably lacking in vigor and could fade quickly. We should respect the minor bullish impulse leg that ended the day nonetheless, but if it should fail to reach its 2379.00 target (see inset) overnight, that would add to the evidence that Wednesday's lows are likely to be revisited. Night owls can use the green line to trigger a bull trade, but be prepared to take at least a partial profit if the implied rally reaches p=2370.50, since that could be it for the night. A relapse to below c=2362.00 would change my parameters, so please take note. This seems probable, since DaBoyz will probably need to bring the futures down a bit more to exhaust sellers and set up a second-wind short-squeeze.

Use the chart shown to get a precise handle on this wicked move. The pattern is pretty gnarly, but the precise bounce from the midpoint pivot at 2358.00 justifies using it. The implication is that the futures will fall to at least 2341.50 before they find enough traction for a bounce. Night owls should trade the futures from the short side, but please note that a 'mechanical' sell signal at the red line has yet to trigger. Ordinarily I'd suggest waiting for a rally to the green line to initiate, but this looks dangerous to me because a rally to the green line would be strongly impulsive.  If you attempt bottom-fishing at D=2341.50, I'll recommend a very tight stop-loss at 2340.75.

Index futures were getting whacked Tuesday night for a rare change, with the E-Mini S&Ps down as much as 16 points and the Mini-Dow off by 120. There is nothing obvious in the news at the moment to indicate why this is happening, although it seems likely that something has unsettled Asian markets. Regardless, DaBoyz will try to hold this gas-bag above last week's 2379.00 low (see inset), and to sufficiently deplete sellers by Wednesday's opening to set up the obligatory short squeeze.  But if the overnight bottom should take out a second previous low -- i.e., 2376.00 recorded on May 4 --  bulls could find themselves on the run in the early going. We'll move to the sidelines for the time being, but you should tune to the chat room for intraday guidance, since the swing highs and lows created when things get a little nutty wind up being easier to predict than the tiresome oscillations we've experienced for the last several weeks.

Today's chart yields a somewhat higher target than the one at 2454.50 we've been using for a near-term perspective. It is not necessarily more bullish, however, since the stall exactly at the midpoint Hidden Pivot supports either of two sobering interpretations: 1) that the bull market is over; or, 2) that a significant correction is under way. We shall see. But it would be perfectly logical for the futures to take a breather for perhaps 3-5 weeks, given the importance of the 2405.13 midpoint resistance where they topped last week. If they instead rampage higher with barely a pause, that would lend weight to the case for a quick run-up to 2492.50. The Dow Industrials, currently at 20896, would be trading just below 22,000 at that point.

The SPX hasn't moved more than 0.5% intraday for 14 straight days -- the longest such streak since 1971, a subscriber noted in the chat room toward the end of Wednesday's sleep-inducing session. Short-squeeze rallies, nearly all of them sprung at the opening bell, have failed to get legs, and the declines invariably have been shallow and short-lived.  We must assume even so that the E-Mini S&Ps are bound for the 2454.50 target shown. For the record, they are currently on a 'mechanical' buy signal at 2386.13, stop 2363.00, but I've recommended using a 'camouflage' entry trigger instead if you want to cut the implied initial risk of $1150 per contract down to perhaps a tenth of that. _______ UPDATE (May 11, 5:10 p.m.): It's always brightest before the dusk, and so we shouldn't despair over sellers' inability on Thursday to put this hoax down after thrashing bulls in the early going. The futures recouped most of their losses by day's end after having been down 16 points at the opening. Despite this, there was no particular enthusiasm or energy in the buying. This suggests DaBoyz will have an even more difficult time trying to levitate the broad averages as the week draws to a close.