E-Mini S&P

The uptrending abc pattern shown has the potential to lift the futures a further 26 points, to 2171.00. Although they paused just shy of p=2145.00, there has not yet been a sufficiently decisive pullback from this midpoint Hidden Pivot to precisely confirm the target.  It lies just shy of a key 'external' peak at 2172.75 recorded on September 22, but the additional two points of upside needed to refresh the impulsiveness of the rally shouldn't pose much of a challenge for buyers, judging from the vigor they've shown for two consecutive days.  If Trump should be leading as Tuesday night wears on and the futures have gone no higher than 2144.25, we might expect a selloff down to at least 2108.75, the midpoint pivot of the bearish ABC pattern shown.

This evening's 'Comey rally' has come from well beneath a key Hidden Pivot support at 2090.25 (see inset), implying it is merely corrective rather than the start of a massive upthrust to new all-time highs.  There are too many variables to predict what might cause this to be so. However, it's safe to say at this point that Wall Street investors seem not merely content to have a felon in the White House, they are positively enthralled by the prospect. As we went to press around 7 p.m., the rally had generated a robustly bullish impulse leg on the hourly chart.  It is too early, though, to hazard a prediction as to whether a follow-through leg of equal magnitude awaits. _______ UPDATE (Nov 7, 7:35 p.m. ET): This morning's energetic short-squeeze exceeded a grand total of zero 'external' peaks on the daily chart.  The nearest lies at 2149.75, exactly 19 points above the intraday high, but it would take a further rally of 13 points to surpass the second 'external' peak we require to signal a proper impulse leg.  The hourly chart is bullish as far as it goes (see inset), but not impressively so, since Monday's high left the futures just shy of at modest, 2135.00 rally target. Let's see whether the futures can blow past it as we might expect from any rally capable of getting legs.

Sellers had such a hard time pushing this erstwhile cinder block down to a modest 'secondary' target on Thursday that I rechecked my calculations to see what the problem was. Sure enough, I'd used an erroneous point 'C' high. The new chart shows the true downtrending pattern that is controlling the futures at the moment. Notice that it has picked up a dead-center-bullseye hit at p2=2079.63. The original Hidden Pivot support was given as 2077.63, but the chart shown is the correct schematic. It provided a very precise 'mechanical' short from the green line (x), and -- night owls take note -- I expect it to do the same from the red line (assuming the futures don't fall straightaway to D=2070.00). That last number can be bottom-fished with a 2070.25 bid, stop 2069.25 (!), but I recommend the trade only to those who have captured at least a few points of profit on the way down. As always, a decisive breach (i.e., more than three ticks here) of D would imply more weakness to come, presumably after a bounce of indeterminate strength.

On Tuesday, the E-Mini S&Ps finally fell to a moderately bearish Hidden Pivot target that had been more than two months in coming. The fact that Wednesday's bounce from this Hidden Pivot support was weak and lasted for less than a day strongly suggests that the selling is the start of something more powerful. We'll know soon enough, since, from our technical perspective, the hallmark of a bear market is downtrending ABCD patterns that consistently exceed their 'D' targets. Conversely, we should also start to see abcd corrective rallies that fail to achieve their 'd' targets. This dynamic should be evident in all time frames, even in patterns that play out in either direction on the lowly 1-minute bar chart. Most immediately, we might look for this in the bearish pattern displayed at the rightmost edge of the chart. It has already been confirmed by the so far slight bounce precisely from the midpoint pivot at 2087.25.  Any further slippage should be expected to hit D=2068.00, and to provide a potentially tradable bounce from within a tick or two of that number. Bottom-fish there with a stop-loss as tight as three ticks, but only if you've been profitably short for at least part of the ride south.

The chart on display today returns us to a 2090.25 downside target that has been in play for five weeks. It still looks like a winner to me, even if it is taking forever to get there. Shorts entering at any point along the way would have survived without too much punishment, but the reward for enduring the stresses this might have entailed works out to about $1.78/hour so far. I have included in this calculation hours spent sleeping, or at least trying to sleep, since night-time offers no respite for those with open positions.  From a technical standpoint, our concern is not so much whether the target will be reached -- it almost certainly will -- but rather, how robustly the futures bounce from it. If they instead smash the target, a Hidden Pivot support, and then close beneath it for two consecutive days, that would imply that the weakness we've seen since early September is more than merely corrective -- that it could be the start of a bear market that has grown increasingly likely ever since this bull began to flout falling corporate earnings early in 2015. _______ UPDATE (Nov 1, 3:48 p.m.): Su-prize su-prize. After plummeting 30 points today, the futures have rallied 16 points so far from a low at 2091.00 that missed my target by less than a point. If bulls can't keep this rally going for another day or two, they will be in big trouble.

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.