E-Mini S&P

Friday's short squeeze to new record highs missed the 2455.50 target shown by 10 points, but the futures are still on course to hit it. In fact, they became a theoretical 'mechanical' buy, stop 2409.50, when they pulled back to the pink line, a 'secondary' Hidden Pivot. The trade opportunity is past, but the 'buy' signal is still in effect and can be interpolated via a 'camouflage' entry if you know how to set one up.  I'd suggesting using an ABC pattern on the three-minute chart to do so. As of Friday, however, an 'entry' signal had yet to trigger. The nearest 'external' peak that could be used for this purpose lies at 2433.00 (6/9 at 2:24 p.m).________ UPDATE (Jun 12, 11:23 p.m): Back away for now, since monitoring tedium like Monday's could put one in a death-like trance.  There is no change in my immediate outlook.

Wednesday's selling bottomed three ticks above the 2423.25 target where we'd intended to bottom-fish, denying us an opportunity to catch the 10-point bounce that followed. The bounce was technically unimpressive and inconsequential, but the day ended with a slightly bullish bias for the very near-term. Take a few steps back, however, and you can see a bigger picture (inset) that provides reason for caution. Specifically, last week's record high occurred almost precisely at the 2439.00 Hidden Pivot resistance shown. An upward reversal and stab through it would be very bullish, especially if it were to occur by week's end. However, for the time being we should presume that the futures will need a rest of at least 3-5 days before they can try to muscle their way past a target that took four months to reach. Yes, the recent peak could mark the start of The Big One. But given the fact that the bull has been charging hard for more than eight years, odds are against it.

Eight years-plus into a bull market, I hesitate to say I'm in love with the 2457.75 rally target shown in the chart. But as far as Hidden Pivots go, there's no denying it's a beauty. What this implies is that I consider it unlikely the uptrend will bulldoze its way past this 'hidden' resistance without a tradable pullback from perhaps within a point or two of it. You can attempt shorting there with the usual penny-ante stop-loss, but if you've been long at least part of the ride north, don't be afraid to step up your position size and widen the stop-loss to as much as three points. For purposes of getting long ahead of the prospective move, a 'mechanical' bid at p=2387.75, stop 2364.25, will suffice. However, I'd suggest converting any mechanical entry signal at p2=2422.75 into a 'camouflage' trigger that caps risk at no more than five ticks ($62) theoretical per contract. _______ UPDATE (Jun 6, 5:01 p.m. EDT): The day ended with a bearish impulse leg on the hourly chart. Night owls can use the 2423.25 target shown to bottom-fish with a stop-loss as tight as two ticks. If it's hit, look for more weakness on Wednesday.

A 2439.00 rally target that we'd been using for weeks came within three ticks of nailing Friday's top, but bears shouldn't get their hopes too high. For in fact, the subsequent pullback was too shallow to suggest buyers are the least bit tired, and unless North Korea starts a nuclear war over the weekend, we should expect the broad averages to continue doing what they've been doing for the last 87 months -- i.e., move relentlessly higher.  There's a minor Hidden Pivot resistance at 2440.75 that comes from a pattern gnarly enough to give it some stopping power, but if it is easily brushed aside we'll need to use a new pattern with a 2457.75 minimum target to keep from getting fooled. A proper pullback to the pink line (p2=2422.75) would generate a 'mechanical' buy signal in theory, but to further reduce risk, I'd suggest using this tactic only on a full retracement to the green line (2252.75), stop 2317.50.

Fueled by Trump's rejection of the global climate accord, the futures were closing fast Thursday night on a potentially important target at 2439.00 that has been in play since March 28. It is short-able with a stop-loss as tight as 2340.10 (or via camouflage if you want to better your odds), especially if you've been long for the ride up, but if the stop is demolished we should infer that more upside impends, presumably to at least 2455.50. That target is derived using a lower point 'A' at 2259.50 (2/2). Both targets are sufficiently clear and compelling that I'd be surprised if the uptrend blows past either without at least a scalp-able pullback. _______ UPDATE (June 2, 10:12 a.m. EDT): The futures have fallen 10 points so far after topping at 2437.25 this morning. The 2439.00 target served us well in recent weeks, keeping us on the right side of the trend and providing a precise exit point for any long positions. If you did not get short when this vehicle topped earlier today, I wouldn't recommend trying it on a second pass. Anyone who did get short should let me know in the chat room, since I will establish a tracking position if I hear from two or more subscribers who took positions.

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.