E-Mini S&P

Tuesday's downdraft crushed the 2342.50 Hidden Pivot support, implying that more weakness is coming. Bulls are unlikely to go down without a nasty fight, however, so expect some wild swings. The gyrations cannot but be tradable, but I would suggest executing your orders using 'camouflage' entry signals generated on charts of five-minute degree or less.  The selloff was bearishly impulsive on the daily chart, since it exceeded the required internal and external lows without a correction. If the downtrend were to continue on Wednesday, surpassing an 'external' low at 2332.00 recorded on February 17, it would increase sellers' imputed power. ________ UPDATE (Mar 22, 8:38 p.m. EDT): If that was the most energetic bounce bulls can muster, then lower prices are coming.  Buyers would have to hit 2382.50, and soon, to turn things around._______ UPDATE (Mar 23, 8:09 p.m.):  The will-they-or-won't-they news on the healthcare front may have lost its power to drive this vehicle significantly higher, so look for the organic weakness that has prevailed in recent weeks to continue. If shorts can keep their cool -- by no means a foregone conclusion, they'll be in good shape. Click here for a fresh chart.

We're dealing with many crosscurrents, including a major rally target at 2403.00 that the futures came within six points of achieving three weeks ago. It's not possible to say with confidence right now whether this feint will prove to have been the elusive Mother of All Tops. However, there is no question that the S&Ps are showing signs of fatigue.  Today's chart shows this in the form of a minor rally pattern whose target coincides with the big-picture target. The E-Minis have struggled to reach it, but until such time as they  dip beneath the pattern's point 'C' low at 2351.00, the target will remain viable in theory.  The futures would become a 'mechanical' buy, stop 2350.75, if they come down to 2364.00, but I'll instead suggest watching from the sidelines and -- if you're a permabear -- cheering the futures on if the stop-loss is hit.

Today's chart (click on inset) is persuasive on the matter of whether the S&Ps are likely to move higher. This seems probable, although not necessarily right away. The June E-Mini contract has pushed past a clear Hidden Pivot target at 2381.75, implying under our rules that it is being acted on by a pattern of larger degree. The rally target of that larger pattern lies at 2469.75, a 94-point thrust that would equate to a Dow move of about 800 points. Even so, we bought DIA puts at these levels because a target of even larger degree had been reached within two points. I like the odds, because the raging bull has been acting tired lately and even a few days of moderate selling could double the value of puts that subscribers acquired for an average 92 cents. Putting aside the technical ephemera of the Hidden Pivot Method, you can simply look at the chart and sense that it is saying "Short me if you dare!"  Of  course, its glowering menace would vanish if next week the broad averages were to collapse. That will always be a possibility. But when you bet on it as we have, the wager should be small. I am no seer, just a technician and trader with a firm handle on the odds. Even so, I cannot make the claim that this market is incapable of surprising me. The scary fact is that it is well capable of surprising us all.  Still more scary is that that's exactly what it is fixing to do.

Thursday's gratuitous ups and downs did not alter my forecast of a rally to the 2403.00 target shown. However, because the peak of the intraday swings failed to reach the pink line  (a secondary Hidden Pivot at 2390.00), and also failed to exceed the 'external' peak at 2394.25 labeled in the chart, the short-term bearish case deserves a little more deference than it did at Wednesday's close. Regardless, a move to the target on Friday should be shorted with a stop at 2405.25, since it closely coincides with a nearly-achieved target of much greater magnitude that I'd noted here earlier.

The Maniacs of Wall Street seem to have mellowed, taking Wednesday's 25-basis-point rate hike by the Fed literally in stride. Stocks moved steadily higher during the day, accelerating on the news. It's not as though the Maniacs were unprepared for it. As one talking head noted on MSNBC, Yellen had all but marched the central bank's intentions down Main Street, brass band in tow, to alert the faithful and the gullible. Now, expect the halfwits who turn press releases into front-page "news" to effuse over how brilliantly our expectations have been managed by Yellen & Co., while saying nothing about the epic, transparent fraud of the central bank's decade-long attempt to grow an economy with money rained down from the sky.  And grow it has, assuming you consider runaway asset inflation to be growth.  There's a debt side to all of this, by the way -- but hey, who cares with the Dow trading at record highs?  As for the E-Mini S&Ps and the broad averages, we'll continue to forecast their crazed behavior one lurch at a time. The former recently topped at a potentially very important target, and that's why we bought some DIA put options while the Maniacs were celebrating the 25-basis-point tightening. We've got a bid in for a few more puts if stocks should go just a smidgen higher.  Meanwhile, the June E-Mini looks like a great bet to reach the 2403.00 target shown (see inset). That's slightly above the record high recorded on March 1, but still within the bounds of a possible double-top bull trap.

Switching to the June contract, we discover a short-term rally target at 2403.00. There are no significant differences relative to the March contract -- other than that Friday's upthrust did not quite touch June's 2377.00 midpoint pivot. However, it came close enough for us to infer that pattern and its four Hidden Pivot levels -- x, , p, p2 and D -- can be used to trade this vehicle and precisely gauge the trend strength. Presently the futures are on a 'mechanical' buy signal from 2364.00 that triggered Friday on the pullback to the  green line. If the line should be hit again, I would not recommend trying to get long there belatedly. For those who are patient, the next such opportunity could conceivably come on a pullback to the red line, a midpoint pivot, but only after it has been decisively exceeded for at least a few bars. Looking at a much bigger picture, note that a rally could hit 2403.00 without exceeding the potentially very important target at 2404.30 that is billboarded above in The Morning Line. It was missed by two points on the last run-up two weeks ago, and I still believe it has strong potential to mark the top of the bull market begun exactly eight years ago. ________ UPDATE (Mar 14, 5:15 p.m.): Today's soporific price action left the forecast and guidance above unchanged.

Friday's fleeting, fake-out surge to nowhere peaked precisely at the 2379.75 midpoint Hidden Pivot shown, implying the pattern can serve as a useful template for trading and forecasting this vehicle as the new weeks begins. The pullback to the green line was a 'mechanical' buy in theory, but we passed up the opportunity because it seemed unlikely that DaBoyz were going to press their luck with a strong close as the week ended.  Sunday night-owls can attempt a mechanical entry nonetheless, stop 2353.75, since this evening's price action looks too gentle to set up a dive to our stop. If the futures forge higher, pushing decisively past 2379.75 intraday, especially in the early going, expect the rally to continue to the 2405.50 target.  That's a potentially important number, since it closely matches a long-term target that I've reproduced in the chat room as an 'epiphany'.  You'll want to get short up there, especially if reversing a long position, but it may also be possible to accomplish this using the put-buying strategy I've advised in the latest DIA tout. I'll be switching to the June contract in any event, but I've stayed with the March for an extra day because of the precise hit at the midpoint pivot.

My gut feeling is that the short squeeze that DaBoyz popped off yesterday's low won't get very far. The chart shown allows for this with a "reverse" ABC pattern (aka 'rABC' in the chat room) where the D target is lower than than point B high. I've never presented such a picture before, and I'll be interested myself to see whether the unambitious pattern's midpoint pivot, 2375.75, contains the move. If not, we might expect the rally to continue to the 2397.50 target. If that number is reached or closely approached, I'll be tempted to take home a short position over the weekend. If you're game but not keen on using a futures position, you could substitute DIA puts with perhaps two weeks left on them. The trade would still look tempting if the futures fall short of D=2397.50.

DaBoyz used an ostensibly bullish payroll number to distribute stock in the opening hour; then, the mild weakness that has prevailed over the last four days resumed. It did no technical damage to the intraday charts, but the immediate picture would darken if the two lows labeled in the chart (see inset) are exceeded on Thursday. Were that to occur, it would add to the evidence that the Trump Rally is feeling more than just minor fatigue. A breach of the lows seems likely, given that the futures went nowhere after tripping a seemingly promising 'counterintuitive' buy signal when they hit the green line early in the session.