E-Mini S&P

Intraday highs and lows are tending to occur in the opening hour of each day, a pattern that has become so predictable that it's bound to change. My guess is that one of these days, stocks will open weak and simply head lower. If so, the first place we might look for the E-Mini S&Ps to fall is to 2094.00. This would follow from Friday's headless-chicken spasms having come close enough to the green line (see inset) to trip a 'mechanical' short there, stop 2150.00. The subsequent breach, by nine points, of the midpoint support also points lower. If this does not come to pass, we could infer that the futures are really, really confused, conflicted and unable to get out of their own way. Heaven forbid the election brings clarity to the markets.

Seven trading days have failed to push this flying sow to the 2152.25 target we've been using for a while. A print this morning at 2149.75 is as high as it's gotten, meaning the target is still valid in theory. In practice, however, we'll focus on a larger and presumably more meaningful pattern that is bearish and projects to 2093.75. I recognize that the impulse leg here is a mongrel because its point 'B' low failed to exceed mid-September's 2107.75 as we generally require. It looks good enough for government work, though, and that's why we should use p=2121.63 as a minimum downside objective for Tuesday. This midpoint Hidden Pivot should produce a tradable bounce, but I would risk no more than 1.00 point on the stop-loss, since it's the downtrend we are favoring at the moment. Notice that the 2093.75 target is close to another at 2090.25 that we've been using for more than a month as stocks have jerked around meaninglessly. Taken together, these two Hidden Pivot supports should exert a magnetic downward pull on the futures. They will tend to reach their destination if and when short-covering bears exhaust themselves, but the Catch-22 is that this is more likely to occur precipitously with the broad averages trading at new record highs. _______ UPDATE (Oct 26, 6:57 p.m. ET): Today's pointless spasms signified nothing in particular. I could give you a 2142.50 rally target and a fresh chart for trading purposes, but better that you should spend Thursday enjoying life's simple pleasures._______ UPDATE (Oct 27, 8:29 p.m.): The snoozefest continues, a Rip Van Winkle experience by now for many traders.

The E-Mini S&Ps were a 'mechanical' buy Friday on the pullback to the green line, assuming entry was by-the-book. That is not what I recommended, however, nor am I suggesting it now, since we should use this tactic only when we are confident the 'D' target of a pattern will be reached. In this case, no such confidence could exist, since the C-D 'follow-through' leg of the pattern has taken so long to play out. However, neither is there strong reason to think stocks are about to collapse, since trading has been in such a tight range for weeks. Shares could collapse anyway, of course. But deliberately betting against what we expect, in contrarian fashion, can be very costly if we buy put options and stocks continue to scuddle sideways for an extended period. Realize that they have been doing so in the first place because so many traders are expecting a collapse. No matter. We'll stick with our plan, shorting only at Hidden Pivot rally targets, not in the midst of mindless tedium. _______ UPDATE (October 24, 8:57 p.m. ET): Well shut my mouth! The futures faked lower on the opening bar, pulling back to the green bar before taking off like the proverbial bat out of hell. The intraday high at 2149.00 fell a smidgen shy of my aging target at 2152.25, but it remains valid nonetheless. I'm wary of shorting there, but you can attempt it in small size anyway, using a stop-loss no wider than 2153.25.

What an ordeal these last few weeks have been, even for the most patient bears. Whereas we might have expected the stock market to continue plummeting after its promising swan dive on September 9, what we've seen instead is the broad averages thrashing around like a hot air balloon being dragged to the ground in a windstorm. I'm still on board with the longstanding, bearish target at 2090.75 shown in the inset, but this comes with the acknowledgment that the futures have been bullishly impulsive on the hourly chart since Friday. I will therefore predict nothing in particular for tomorrow, while noting that a push above 2134.50 would be reason for short-happy bears to back away, at least for an hour or two. A short from 2152.25 might be attempted thereupon, but your stop-loss should allow no more than 1.00 point of adversity.  These numbers will apply only if the bullish pattern's point 'c' low at 2116.75 remains intact. _______ UPDATE (Oct 18, 6:35 p.m. ET): Zzzzzzzzzzzzzzz. _______ UPDATE (Oct 19, 1:34 p.m.): Still no change, although I am advising the short from 2152.25 only for those who have been long for at least a part of the ride up. ________ UPDATE (Oct 20, 6:46 p.m.): There's nothing we can do to alleviate this incredibly boring stretch of days stuck in an absurdly  tight trading range.  It has not changed my outlook or analysis.

Friday's rally extended the previous day's short squeeze to higher heights, but without producing a net gain on the day. Considering how the futures relapsed after topping an hour into the session, the longstanding, bearish target at 2090.25 looks better than ever.  I have little doubt that it will be reached. What I'm looking for, however, is for this Hidden Pivot support to give way easily, implying it will hold for no more than a couple of hours. Better yet -- for bears, at least -- would be a breach of the support the first time it is touched. That would suggest that the selling is about to pick up steam. Presumably, that would put bears in command for the remainder of the week. What was especially bearish about Friday's price action was that the stock market was unable to make headway even though Yellen was giving her most dovish speech in years.  Far from talking about imminent tightening, she told eggheads, policy wonks and banking bureaucrats at a Boston luncheon that the Fed may need to run a 'high pressure economy' to reverse damage from the 2008-09 crisis.  That sounds more like she is trying to manage expectations for a new round of QE than for a hike in the federal funds rate. Under the circumstances, I cannot overstate the bearishness of the stock market's punk reaction on Friday.

With the Dow down nearly 200 points in the early going Thursday, it looked like bears had the bad guys on the run. Alas, the broad averages turned up with a vengeance and forged steeply higher for the remainder of the session. Not coincidentally, the bounce came from a 'secondary' Hidden Pivot support I'd flagged the night before. The support was a relatively minor one, but that didn't make it any less likely to produce a humdinger of a rally. The menace of the short squeeze became apparent when it began to exceed some prior peaks on the lesser charts. I posted a mild warning in the chat room when this occurred.  Although the squeeze left intact a longstanding downside target at 2090.25, it will have taxed the patience of bears, who must be starting to wonder whether two straight days of favorable breezes is even possible any more. It is, of course, but the wished-for days are unlikely to come when we are wishing for them. The tradable pattern for the moment is the one shown, presumably after the futures have frustrated bulls with a second point 'c' low.

Trading activity slowed to a crawl on Wednesday as Jews around the world observed the Yom Kippur holiday. With stocks in a holding pattern, a bearish technical picture remained unchanged. We've been using the 2090.25 downside target of  pattern larger than the one shown, but for trading purposes it will probably be more useful to focus on the little stuff, since the lesser intraday charts provide the best tool we have for fashioning entry points with risk under tight control. That implies p=2124.75 should be used as a minimum downside objective for now. If it's smashed, however, D=2108.75 would be in play, and thence 2090.25. Alternatively, the very short-term picture would turn bullish if DaBoyz can generate enough short-covering to take out the 2140.75 point 'C'. ________ UPDATE (Oct 13, 1:51 p.m. ET): Bears continue to be their own worst enemy, as well as the only source of buying power strong to heft this brick past resistance. This morning's bullish, trampoline reversal came from 1.00 point below the 2108.75 Hidden Pivot support noted above. The more important downside target at 2090.25 is still valid in theory and will remain so unless this short squeeze hits 2141.00. However, we shouldn't discount bears' well-proven ability not merely to shoot themselves in the foot, but to do so repeatedly with a semiautomatic weapon.

How exhilarating! Just when bears were ready to throw in the towel after nearly three weeks of asphyxiating tedium, stocks swan-dived Tuesday into what we can only hope is an unfathomable abyss.  The S&PS were down almost 35 points at their lows, and although a short-covering rally in the final 90 minutes recouped nearly a third of the days losses, there was reason to think buyers might do the right thing and drop-the-hell-dead before the Yom Kippur holiday ends at sunset on Wednesday.  The old adage to "buy Rosh Hashanah, sell Yom Kippur" seems to be getting a nice play this year in any case, and we can only hope that it continues to hold true with a vengeance. For how else will the stock market and the economy ever return to sanity?  The current mania is nothing that a 10,000-point plunge in the Dow wouldn't cure, of course. But if that's what we are seeing the beginning of, it's going to take some time, and not just a little pain, before investors come to understand that $100 million homes, and $60 billion valuations for such as Uber, are not only not normal, but downright nutty. From a technical standpoint, the E-Mini S&Ps looked primed to fall a further 42 points, equivalent to a drop in the Dow Industrials of about 350 points. That would bring the futures down to the 2090.25 target shown.  It was first broached here several weeks ago, and although the gratuitous ups and downs since then may have caused chartists to lose sight of the targeted support, its attainment was never seriously in doubt. Interestingly -- or perhaps not, since even quants often rely on obvious technical patterns -- it was a lowly trendline, shown in the chart as a descending brown line, that contained

The futures' conflicted, tightly impacted spasms of late have meaning only if we focus on well-formed ABC patterns like the one shown (using the coordinates labeled in green). It predicted today's 1263.50 top to the exact tick, so we'll infer that the next move, if higher, would reach the 2171.50 target shown. That's not saying much, since a rally to that price wouldn't even surpass the September 22 high at 2172.75 that has served as the very modest number for bulls to beat for three very tedious weeks. It's all we've got to trade for now, though, with an alternative micro-target at 2174.00 if it's exceeded. Both of these Hidden Pivots are going to be useful mainly to scalpers, but we'll wait for 2197.75 before we get serious again about shorting this hoax-of-a-bull-market. Pivoteers can locate that target on the hourly chart using the following coordinates: A=2107.75 (9/14); B=2172.75 (9/22); and C=2132.75. I won't drum-roll this one, though, since it has enough things going for it that it could prove especially useful.