E-Mini S&P

It's always exciting to watch the S&Ps steal up on an important Hidden Pivot target that has been months in coming. This time there were two of them, at 2240.25 and 2250.00 respectively. When the dust settled on Thursday, the futures had slightly exceeded the latter with an intraday high at 2251.50. The pullback that followed was barely a retracement, however, and that's why I hesitate to infer that the TrumpSanta rally is over. If not, there is yet one more target of immediate consequence left -- at 2299.00 (see inset). The problem is, if the futures get there, the Dow Industrials would be trading at 20,000, which is 273 points above the very highest target I'd allowed for this run-up. How do I reconcile the discrepancy? My instinct is to assume that the Dow is headed to 20,000, and the E-Mini S&Ps to 2299.00. That would put them back in synch of a sort -- i.e., at round-number resistance with the heft to stop a bull that has been charging hard since 2009.  And what if the Dow blithely blows past 20,000? I'd have to side, at least until my technical indicators tell me otherwise, with lunatic-fringe bulls who seem to think 20,000 will provide just another launching pad rather than daunting resistance. My E-Mini S&P target at that point would be 2417.50 --equivalent to around Dow 21000. And above that? More than likely, we'd be looking at four more years of the Trumpster. (Trading note: Our tracking position still holds one of four contracts originally acquired for 2185.75. Imputing partial profits booked on the way up yields a cost basis of 2087.25 and a theoretical gain on the trade of about $8000 so far.)

We hold two contracts with a profit-adjusted cost basis of 2149.25. That's what remains of a four-contract tracking position established Sunday evening when moderate weakness permitted a 'mechanical' buy at 2185.75. I subsequently recommended closing out half of the position if the futures hit 2223.75.  Yesterday's powerful surge to 2241.25 provided an easy opportunity to do so, yielding a paper gain on the position of a little more than $7000 so far.  We're using  a 2299.50 target, but I'll recommend exiting a third contract if the futures hit 2248.00, just below a lesser but still significant Hidden Pivot target (see inset) that has the potential to reverse the bullish tide, if only temporarily. If it doesn't, we'll still have one contract left to swing for the fences -- in this case 2299.50. I have yet to hear from any subscribers who did the trade, but I created a tracking position nevertheless so that I could be on-record with a position that looked like a high-odds bet.  I also wanted to provide specific Hidden Pivot levels and a target that would allow subscribers to get long belatedly at any point along the way. ________ UPDATE (Dec 8, 1:30 p.m.): A rally to 2250.25 this morning has allowed us to exit the third contract for 2248.00, as suggested above. Imputing the theoretical, $3100 gain to the remaining contractor will effectively lower its cost basis to 2087.25. At current levels, the total paper profit on the position works out to $8012

Last week ended with a whimper, but not before generating a 'mechanical' buy signal at 2185.75 on the intraday charts. Although no subscribers reported having done the trade, I'm going to establish a four-contract tracking position anyway just to have it on the record.  Since the 2147.50 stop-loss this gambit requires implies theoretical entry risk of $1913 per contract, I'll recommend doing the trade belatedly only if using a 'camouflage' or 'counterintuitive' set-up on the 15-minute chart or lower. There's no rush, since, presumably, there will be myriad opportunities to get on board between here and the target at 2299.75 with far less risk.  If it is achieved and partial profits are taken according to our rules at p and p2, the position would produce a total profit of $13,300. The target is significantly higher than the one at 2250 that has served as a bullish lodestar in recent weeks. I've used the higher target anyway because the underlying ABC pattern is a personal favorite. Specifically, although the ABC part of it happens quickly, C-D is so elongated that chartists who use ABC or Gartley 1-2-3 patterns tend to lose sight of the finish line. We, on the other hand, will see the pattern and its target confirmed if the rally stalls precisely at p (assuming the futures get there). This is a damn-the-torpedoes 'mechanical' trade, since my gut feeling is that the S&Ps are very vulnerable to a swoon-or-worse. Which is to say, the target is a lot more bullish than I am.  But if the same set-up were to take shape on the five-minute chart, and if it entailed, say, $250 of entry risk, I'd be in love with this trade. _______ UPDATE (Dec 5, 6:50 p.m.): Offer two contracts g-t-c to close at 2223.75, the midpoint Hidden

A moderate, two-day decline has disconcerted the bullish picture somewhat, as a glance at the hourly chart makes clear (see inset). The extremely tedious, albeit relentless uptrend that has persisted for three weeks has begun to roll down from record highs.  Virtually all bull markets end this way: with an innocuous-looking  abcd downtrend that is discernible only on the lesser charts.  The selling could easily start to snowball, since there are only two prior lows of significance to break the fall of the E-Minis. Most immediately, there is 2147.75, the bottom of a shallow, post-election retracement whence the ratcheting, November dirge began.  And then there is the 2078.25 election-night low itself, a 110-point fall from these levels that would be equivalent to a 1000-point drop in the Dow.  There is nothing in particular to suggest that such a plunge is imminent, but we'll want to keep a close eye on this vehicle nonetheless if it exceeds the 2183.50 target of the so-far minor downtrend shown. Perceptions can change quickly when it is institutional lunatics and their vaunted algorithms doing the trading. Under the circumstances, the huge expanse of white space beneath the frail Hidden Pivot support at 2183.50 could start to look perilous in a relative blink of an eye.

Even with a running start and light volume in the early going, the futures were unable to reach the very modest rally target at 2216.00 that I'd flagged for Wednesday. After seven days of flailing around, it's tempting to say that something's gotta give, and soon. Trying to imagine exactly what might happen is another matter.  Clearly, the election shock that briefly energized the stock market has ceased to be a factor. It is headed higher anyway, however, according to some very clear evidence on the charts.  Hidden Pivot analysis suggests this vehicle should reach a minimum 2240.50, or perhaps 2250.00, by year's end. Notice how the ballistic bounce from election night's panic-stricken low went on to demolish the 2134.50 'midpoint' pivot with ease. Typically, this kind of price action indicates that the target is very likely to be achieved. For trading purposes, it also implies that a pullback to the pink line, a secondary Hidden Pivot at 2187.50, would generate a buy signal requiring a stop-loss at 2169.75. There are ways to cut the implied $900 entry risk by as much as 90%, and we can apply them if and when the time comes. In the meantime there is no point in trying to guess what might re-activate buyers.  That they believe in Santa Claus is clear enough from the historical record.

I've flagged two rally targets well above these levels, but buyers seem in no hurry to get there. Tuesday's constipated price action did in fact generate a 'mechanical' buy signal, stop 2196.00, on the pullback at day's end to the green line. However, I'd suggest waiting for a better opportunity -- preferably one that doesn't require babysitting the position overnight as is the case here. If the futures waft higher in the dead of night, exceeding the midpoint pivot at 2206.13 by more than a couple of points, look for more buoyancy and a push to the very modest 2216.00 target shown.

The previous chart showed a rally target of moderate importance at 2250.00 derived from a low recorded on November 9. Here's an alternative target at 2240.50 that comes from a larger pattern (see inset). There is yet one more target at 2299.00 that is also in play from an even bigger bullish pattern. The important thing to note here is that the uptrend has demolished midpoint Hidden Pivot resistances associated with each of the targets, implying there is still quite a bit of power pushing the 'Trump rally.' Swing traders are therefore advised to position from the long side, especially those of you who plan to go short against the trend - tightly stopped, as always -- at any of the three benchmarks noted above. We'll be looking intraday for more-nuanced opportunities, presumably with risk held to a minimum, so stay close to the chat room if you want to stay apprised in real time. _______ UPDATE (Nov 28, 4:30 p.m.): Monday's little sturm und drang did nothing to alter the outlook given above. Day trading opportunities will remain catch-as-catch-can.

We started the day with an aging, 2205.25 rally target that has eluded bulls for nearly a week. The futures rose moderately to 2203.00 early in the session, but repeated attempts to cover the last inch were unsuccessful. Assuming buyers get there today, two targets I've aired here before that come from larger patterns will be in play. The first lies at 2240.50; the second, at 2250.00. Either would be a logical place for the bull to catch its breath, but if neither shows much stopping power, that would imply significantly higher prices are likely.  In the meantime, the green, red and pink lines can be used to generate 'mechanical' entry signals. This entails placing bids at each line after it has been comfortably exceeded for a few bars.  The entry risk for these trades is relatively high in comparison to other types of penny-pinching entry tactics we use, such a 'counterintuitive' and 'camouflage' entries, but it is the 'mechanical' signal itself that is valuable for purposes of timing entries for optimal ease.

The futures are on their way to at least 2205.25, the rally target of the pattern shown. It's the most conservative price objective that can be inferred from the hourly chart, with ABC coordinates that have been confirmed by some very precise hits at the midpoint pivot, 2187.00.  The pullback on Friday to the green line was a 'mechanical' buy, as would be a pullback to the red line now.  A 2181.00 stop-loss would be required for this trade, but you can eliminate as much as 95% of the implied $300 initial risk per contract by using a 'camouflage' entry trigger.  Ask in the chat room when appropriate if you'd like to know more about this.