E-Mini S&P

In the chat room on Thursday, we used 2090.25 as a lodestone and it served us well, not only keeping us on the right side of the session's 28-point rally, but also providing a very predictable target. How predictable?  Here is my post in the chat room from 12:18, when the futures were closely approaching 2090.25:  "[The E-Minis are] slithering up to a key 'external' peak at 2090.25 recorded last Thursday on the way down. There WILL be a pullback from just beneath it that could be tradable. However, a pullback [following a move ] exceeding 2090.25 by even a tick would almost surely be tradable -- from the long side, of course."  In the actual event, the E-Minis topped at 2088.75 ten minutes later, then spent the next hour-and-a-half screwing the pooch. Whether this entirely gratuitous chop was tradable or not is open to discussion, since the three pullbacks that occurred over the 90-minute pooch-screwing interval amounted to no more than five points each.  Thereafter, however, and precisely on cue, shorts panicked in the final minutes of the session, driving the future up to -- you guessed it! -- an intraday high at 2091.25. Night owls may have an opportunity to get long via a 'counterintuitive' entry if the futures go no lower than 2084.25. I've sketched this tactic for your guidance, using the current low, 2085.00, to set up a possible entry trigger at 2086.81. (Note: This would change if a lower point 'C' occurs.)  The key to the trade, and to maintaining a bullish bias here, is that the AB leg of the ABC pattern shown, in strongly impulsive fashion, exceeded the 2090.25 peak from a week ago.

Here's a homework assignment for those of you who took the Hidden Pivot Course Tuesday night: Call up a one-minute chart of the E-Mini S&Ps, then compare price action to my posts in the chat room on Wednesday beginning at 15:27. It is at that time that I initially expressed skepticism about getting short just beneath a key peak at 2064.75 created on the bounce from the low of the Brexit selloff last week. I did so anyway, using a camouflage pattern; covered it minutes later near an important low; then reversed the position and went long for the so-far 14-point rally that has ensued. This went against a chat-room consensus that seemed, in my estimation, too eager to get short in too obvious a place. My reasoning behind each step is minutely detailed in the chat room posts, so you'll be able to deconstruct the trade in order to learn from it. I have often made the claim that the Hidden Pivot Method is well suited to jumping into a trade when fear, greed and uncertainty are at a crescendo, as was certainly the case here; and to do so with risk very tightly controlled. Take the time to retrace my steps and you will understand why this is so. The initial theoretical risk on the trade was just 1.00 point, but it put us in good position to exploit nearly 20 points of ostensibly wild, inscrutable price swings thereupon.

If you're keeping score, the 'camouflage' trading strategy that I detailed here for night owls Monday evening could have produced a profit of as much as $1400 per contract. The signal triggered at around 1:00 a.m. EDT, with entry coming at exactly 2002.00. Cashing in on the trade required patience, however, since it took more than five hours for the futures to take flight, and another six for a second leg to unfold near the end of what had been a very tedious, choppy day. Looking ahead, chat-room punters seemed eager to fade the trend, but their attempts to pick a top got shredded serially as the futures rose in the final hour to finish near the intraday high. Looking ahead, the rally would begin to look like more than a perfunctory bounce from Thursday's bombed-out lows if and when it exceeds the #2 'external' peak at 2064.75 shown in the chart (see inset).  That's a fairly speculative outcome at this point, and bears have ample reason to bet against it, albeit cautiously with tight stops above well-defined, minor-rally targets.  The bigger picture requires a two-day close above 2065.38 to suggest that the bulls have regained control. That's a midpoint Hidden Pivot resistance on the daily chart, and it comes from these coordinates: A=1951.75 (3/10); B= 2119.50 (6/24); and C= 1981.50.

The futures have turned upward Monday night for who-knows-what-reason, and the fact that they've done so without having quite reached a clear correction target at 1973.50 is promisingly bullish. It would be even more bullish if the rally now goes on to exceed the two labeled 'external' peaks, the higher of which lies at 2016.75. Night owls should take note of the tiny look-to-the-left peak at 2003.75, since it has already provided a handhold for a potential 'camouflage' entry created from the very small abc pattern at the right-hand edge of the chart. (Note: The point 'c' low of this pattern does not show up on the 5-minute chart, but it's there -- and potentially quite usable -- on charts of lesser degree.)

The pattern shown replicates one that we used Friday to get a precise read on price action in the E-Mini Dow as it worked its way lower. Although the patterns differ somewhat, they suggest that both vehicles still have a ways to fall if they breach their respective red-line supports Sunday night. That's a midpoint Hidden Pivot, and although the E-Mini S&P dipped slightly below it at the close, the breach was not quite sufficient for us to infer that further slippage to p2=1996.31, or 1973.50 if any lower, is a done deal. Both of these levels, as well as the green line, should work for purposes of initiating 'mechanical' shorts or bottom-fishing, but you could cut the entry risk considerably by executing the trades using 'camouflage' on charts of three-minute degree or less. Check out my chat room posts from Friday, beginning at 10:17 a.m., if you want to see how very accurate and useful Hidden Pivot swing points can be, even when stocks are plummeting and a little crazed. _______ UPDATE (June 27, 4:09 p.m. EDT): No change in my analysis. At the intraday low the futures were down 37 points, eight points from achieving the 1973.50 target. It remains valid, and if it is reached overnight I'd infer DaBoyz are trying to put in a bottom there, even if they have no idea the 'hidden' support exists. Any bottom-fishing overnight should be done camouflage-style, meaning you should look for your entry trigger in uptrending abc patterns on charts of five-minute degree or less.

It'll be another six hours before all Brexit ballots are tallied, but Wall Street seems pretty certain at this hour that Britain will vote to remain in the EU.  If so, the 2137.50 rally target sent out last night (see inset) is where the futures are headed. The target could be hit overnight, meaning night owls could get long initially, then reverse their positions and go short at 2137.50.  There have already been precise hits at p and p2, respectively the pattern's midpoint and secondary Hidden Pivots, confirming the target and shortening the odds of a tradable pullback from very near it.  If you are able to get long for the ride, use some of your profits to cushion a wider stop-loss for the short than you might otherwise deploy. Pivoteers may have noticed that the stall at p2, almost to-the-tick, occurred at the closing bell. Judging from the modest progress the futures have made above it in after-hours trading, the 2137.50 target -- 29 points above at the moment -- could be hit overnight, assuming the vote goes as expected.  A caveat:  If Ladbrokes and the world's stock markets have somehow gotten this bet wrong, brace for an epic  avalanche on Friday.

The futures tripped my 'snooze alarm' Wednesday by exceeding 2088.63, but I went back to sleep minutes later as this meaningless effusion evaporated into nothingness.  I don't know how the Brexit vote will turn out, but the chart accompanying this tout is drawn to anticipate how U.S. stocks might react. The upper limit, assuming Britain remains in the EU, is 2137.50, which would be equivalent to a Dow rally of about 400 points. A vote to exit presumably would send the E-Minis down to 2025.50, equivalent to a drop of  about 450 points. This will be a good test of whether even the wildest moves in the stock market are precisely predictable using Hidden Pivots. Place your bets!

Brexitmania is now evidently as potent as LSD. Just a few micrograms' worth of imagined Brexit 'news' is sufficient to trigger crazy hallucinations in securities markets around the world. Yesterday's psychotic leap, which had the Dow up 270 points by mid-morning, was robustly impulsive, since it surpassed two sharp peaks on the hourly chart (see inset). Given the flighty nature of the buying, however, we shouldn't let ourselves become overly confident that the ebullience will linger into Tuesday. But if it does, we'll know buyers are serious when they reach, then exceed, the 2106.00 target shown. Crucial resistance will come, as always, at the midpoint Hidden Pivot (2088.63), and it, as well as the green and pink lines, can be used to create 'mechanical'  entry points on the way up.  You should attempt this only if you are familiar with the rules governing 'mechanical' trades. Otherwise, tune to the chat room for learned discussion and timely tips that could prove tradable. _______ UPDATE (June 21, 8:01 p.m. EDT):  I've set the snooze alarm to wake me if a rally exceeds 2088.63. If you're more ambitious, you could try bottom-fishing at 2059.25, stop 2057.75. That's a tick above the midpoint Hidden Pivot of the following downtrending pattern on the 30-minute chart: a= 2107.75  (6/9 at 4:00 p.m.); b=2040.75.

Put aside your cherished technical indicators and oscillators for a moment and contemplate the long-term chart of the E-Mini S&Ps with visual imagination alone. For me, that means ignoring systemic threats to the global banking system and geopolitical tumult that should have cut the S&P 500 in half by now. Now ask yourself: Do the gratuitous 300-point swings that this vehicle has traced out over the last 20 months look like a major top to you? To my eye, at least, it is far easier to imagine a big leap first to dizzying heights -- a leap that would turn permabulls giddy enough to set the hook while grinding the last surviving permabears into silt. Alternatively, it is just as easy to imagine a frightening dive to 1400 or so that everyone would mistake for a replay of 1929 but which would in fact be a retracement for a running start at 2500 and beyond. Whatever happens, I cannot convince myself that the tedious swings we've experienced since late 2014 are the last hurrah of the most spectacular bull market in U.S. history. Under the circumstances, we'll need to keep an open mind about whether big moves either up or down are meaningful to the big picture. They will be tradable in any case, and without much risk, since no trend move of significance can begin without tipping us off via a very minor trend change on a chart of lesser degree.