E-Mini S&P

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.

We have unfulfilled targets as high as 2492.50, but the 2455.50 Hidden Pivot shown in the chart can serve for now. I like the 120-minute graph here because it shows the rally for what it is: a labored, grunting affair whose progress has been wholly dependent on short-covering rather than steady buying. Moreover, virtually all of the gains since mid-April have come via gaps at the opening bell, and even then it has taken as long as three weeks to consolidate for the next push, all of which have been relatively modest. Another reason for skepticism is that the short-covering binges have been triggered by news, most of it unsurprising and already well discounted. The distance between where the futures are trading now and the 2455.50 target is equivalent to about 500 Dow points, yardage that bulls could easily have traversed in two or three days in the not-so-distant past. But you can see in the chart that a push to the target could take several weeks if things continue as they've been. We'll maintain our bullish trading bias for the time being nonetheless, but we should be ready to reverse polarity if an intraday downtrend generates a bearish impulse leg on this chart. That hasn't happened for seven weeks, but the next time could be warning of real trouble.

The futures finally broke out of a consolidation pattern Friday following seven days' of constipated price action.  Although we've been using 2492.50 as a big-picture rally target, the 2429.75 target shown, a minor Hidden Pivot Hidden resistance, can serve as a precise benchmark for the near term. Since we never assume the midpoint resistance will be exceeded on the first try, or even that it will be exceeded at all, it can be used for now as a minimum upside objective on Monday. If it gives way easily, that would be a clear sign that 2429.75 is likely to be reached soon thereafter. In the meantime, a pullback to the green line can be bought 'mechanically,' stop 2375.50. Once the futures have held decisively above the red line (p=2402.63) for the required several bars, it too can be used to set up a 'mechanical' entry bid, stop 2393.50. _______ UPDATE (May 8, 6:56 p.m. ET): The futures spiked above the red line at 2402.63 (see above) on the opening bar, but only by 1.00 point. The bull trap this thimble-rigging maneuver created is likely to weigh on Tuesday's opening, but buyers should be sufficiently refreshed by mid-morning to attempt a run at Monday's 2403.75 high.

Price action became tedious and labored last week in the days following Monday's ferocious short-squeeze, but there should be little doubt that our minimum rally target for the near term, 2405.13, will be achieved. It's what happens after that that will matter most, since a decisive push above the pivot within 2-3 days of its first being touched would signal a likely follow-through to as high as 2492.50.  Odds of reaching the target would shorten somewhat if index futures open with a lurch higher Sunday night at or above a minor bullish tripwire at 2385.50. Still more encouraging would be a close above 2392.75, the midpoint Hidden Pivot resistance of a minor bullish pattern on the 15-minute chart (A=2365.75 on 4/24). _______ UPDATE (May 4, 4:28 p.m.): Yet again, there is no change in the immediate outlook. Zzzzzzzzzzz.

Wednesday's agitated price action made it seem like there was a mysterious force holding back the bullish herd. Although it felt like stocks were eager to move higher, every time they tried they got slapped down.  This generated a bearish impulse leg of minor degree by day's end, but on the bigger charts it looked like nothing of importance had happened.  We'll treat it that way, sticking with the very bullish, big-picture pattern shown. It implies minimum upside to the 2405.13 midpoint Hidden Pivot over the near term, with an odds-on shot at 2492.50 over the next 3-4 weeks if the lower resistance is easily surpassed. For trading purposes, a pullback to the green line would offer an enticing 'mechanical' entry opportunity, stop 2317.50. That would imply initial risk of about $1700 per contract, but there are other, far less stressful ways to get aboard. For guidance on this in real time, tune to the chat room if and when the futures get within 10 points of the green line. ______ UPDATE (Apr 27, 11:49 p.m. ET): Click here for an alternative rally pattern that tripped a mechanical buy signal today at 2378.38, stop 2358.00. Notice that it projects a slightly higher minimum target (i.e., p2=2408.69) than the one at 2405.13 given above.

Bears did what was expected of them Tuesday, driving the futures sharply higher with a spate of short-covering that should have caused DaBoyz to smile. The stock market is now entering day three of a global rally triggered by perceptions that voters will ultimately reject Marine LePen's bid for the French presidency. It would seem to matter little, particularly on Wall Street, that Macron, her opponent and likely victor in a runoff scheduled for May 7, will have no mandate to govern.  Still, as the thinking goes, at least he won't deny France its proper role in presiding over the inevitable collapse of the euro and the EU. In the investment world, that would seem to count as good news these days. Looking  ahead, we should expect the futures to continue their heedless ascent to the 2439.00 target shown. This Hidden Pivot has served as a lodestone since late March. Judging from the way buyers blew past the 2378.38 midpoint pivot on Wednesday, there should be little doubt that 2439.00 will be reached. A pullback to the red line before Thursday would not meet our criterion for a 'mechanical' entry, but there will be other ways to get aboard, so stay tuned to the chat room if you care.