E-Mini S&P

With outstanding bullish targets well above these levels, I recently promised that I would keep a close eye on any technical developments that might threaten the rosy outlook. One such warning sign -- one that I mentioned here yesterday -- occurred on Monday when a minor corrective pattern exceeded its Hidden Pivot target (see inset).  The pattern that produced it is sufficiently clear that there 'should have' been a tradable bounce.  The fact that there was none has bearish implications for the near-term, at least, but we shouldn't dismiss the possibility that it could mark the beginning of a far more serious decline.  The next test will come at 2067.50, a Hidden Pivot support of slightly greater importance than the one breached on Monday. If it too gives way easily, take this as a sign that the selling is gaining in urgency and could start to snowball.  The coordinates for the pattern, on the 120-minute chart, are as follows if you want to draw it yourself: a=2116.75 (6/9 at 4:00 p.m. EDT); b=2086.26; and c=2098.25. The equivalent target, basis the September futures, is 2058.50. _______ UPDATE (June 14, 7:39 p.m. EDT): Both contracts overshot their respective correction targets by a few points, implying that more weakness is coming. The decline would start to look serious if it were to breach 2012.25 (basis June) or 2004.50 (basis September).  Both of those numbers represent important 'external' lows recorded on March 24. Alternatively, an upthrust touching 2082.00 (June) or 2073.00 (September) would suggest bulls are sufficiently rested and re-energized to halt the so-far four-day decline. _______ UPDATE (June 15, 9:09 p.m): If the futures trash the 2068.75 midpoint Hidden Pivot support shown, expect them to fall to exactly 2060.00, where we might look for a tradable bounce. If they go any lower, D=2051.25

Although the Dow and S&P 500 are within easy distance of new record highs, two of the best technicians we know doubt they will be achieved. In a lengthy analysis that considered various technical indicators, including the Coppock Curve, key advance/decline lines and the VIX Index, Stockmarket Cycles' Peter Eliades recently concluded as follows: "We continue to believe that the highs reached in May of last year will continue to mark all-time highs for years to come." He notes, however, that the Coppock, a tool designed to provide long-term buy signals, lay within a hair of generating a buy signal last week. Our friend Larry Amernick, a past president of the Technical Securities Analysts Association of San Francisco, similarly concludes that technical negatives outweigh positives at the moment, making new all-time highs unlikely. For our part, we see new record highs within the next 2-3 weeks. Specifically, Rick's Picks has an outstanding projection of 2169.25 for the E-Mini S&P futures, or 2250.00 if any higher. The lower target, a Hidden Pivot resistance, would surpass the record  2134.00 achieved in May 2015 by 35 points. The accompanying chart shows why we are convinced that new all-time highs await. What persuades most is the power of the impulsive A-B rally that unfolded between mid-May and early June. Although it added just 96 points to the value of the index, it surpassed two major peaks -- an 'internal' and and 'external' -- that I've labeled. Now, as long as the current pullback does not exceed mid-May's 2022.00 low, current weakness should be regarded as corrective and therefore a buying opportunity. We would have to rethink our bullish stance, however, if the decline, now a week old, were to breach not only the 2022.00 low, but a second 'external' low that occurred at 2012.25

Another day of tired price action has not significantly altered the odds of a short-term finishing stroke to p2=2131.31, or to D=2147.50 if any higher. Both of these Hidden Pivot resistance points are derived from the pattern shown. It's a wacky one but compelling nonetheless, since it's the only rally pattern that can be derived from the three-week period covered by the chart. The minor ups and downs that we typically use to get aboard are too gnarly for me to suggest an entry strategy overnight, but you can tune to the chat room 24/7 for potentially tradable ideas in real time. Please note that there are two bigger-picture rally targets above 2147.50 that remain viable: 2169.25 and 2250.00. _______ UPDATE (June 9, 7:41 p.m. EDT): Zzzzzzzzzzz. No change.

Buyers struggled at the 2115.13 midpoint resistance more than they should have if they're intent on reaching the 2147.50 target shown by week's end. Paradoxically, any weakness that brings the futures down to the green line at 2098.94 should be regarded as a 'mechanical' buying opportunity, stop 2082.50.  Given the $800 theoretical entry risk, you should consider using 'camouflage' to whittle it down to more like $80. The rally target is one of three that I've aired lately. The other two, based on larger, bullish patterns, lie at 2069.25 and 2250.00. A key resistance associated with the latter lies at 2136.00.

We've been using a 2169.25 target which, at the time it was introduced a couple of weeks ago, implied that the Dow Industrials were about to tack on 700-points. That has yet to pan out -- the futures have come about 20% of the way so far -- but the new chart accompanying today's E-Mini S&P tout shows what could happen if the rally goes out of control. The 2250.00 target, which lies about 153 points above Friday's settlement price, is equivalent to a 1200-pointer in the Dow that would hit 19,000.  Keep in mind that you are hearing this crazy prediction not from some wild-eyed bull who thinks stocks are a terrific buy at these levels, but from an inveterate bear who thinks a 10,000-point drop in the Dow would feel right as rain. Who would you rather believe? Against all logic and the law of gravity, how likely is such a move?  I'd need to see a thrust past the 2136.00 'midpoint Hidden Pivot' to become a true believer, but even now it's hard to deny that the futures appear to be consolidating above the green line, where a theoretical 'buy' signal was tripped. Whether or not they eventually make it to 2250.00, the chart dictates that our current bias be unskeptically bullish if we are to make the most of whatever wilding spree might lie ahead.  We'll be looking closely for 'mechanical' and 'counterintuitive' buying opportunities in real time, so stay close to the chat room if you want to be prepared to take advantage of any low-risk opportunities that develop. _______ UPDATE (June 6, 7:48 p.m. EDT): Today's upthrust decisively cleared the 2095.63 midpoint Hidden Pivot associated with the 2169.25 target noted above. The pivot can be used to get long 'mechanically', provided the set-up meets

Judge for yourself the weight of today's decline relative to the 2169.25 rally target (see inset). Of course, a small loss in momentum could always snowball into a rout. For now, though, I'll stick with my forecast of a run-up to the target within the next 5-8 days. Alternatively, it would take a 74-point drop, to below 2022.00, to invalidate it. Tuesday's moderate selloff did generate a weakly bearish impulse leg on the hourly chart; however, it would take a further fall to 2082.25 for bears to inject a note of menace into the immediate outlook. Please note as well that the E-Minis have been moving in lock-step with crude oil prices, and that my forecast for the latter remains bullish up to a 51.49 target, basis the July NYMEX contract. That's 2.56 above the last settlement price, implying there's still plenty of upside -- not just for crude, but for its current bitch, the U.S. stock market. _______ UPDATE (June 1, 10:08 p.m. EDT): Wednesday's gratuitous swoon changed nothing in the immediate picture. As noted above, a 2082.25 print would be needed to hint of trouble. The day's low occurred at 2083.25, instructing us that the machine traders are looking at the same support. As such, with a fan club of sorts, it has become even more important.  _______ UPDATE (June 2, 11:32 p.m.): DaBoyz sprung a nasty trap on bears in the early going, goosing this vehicle for a nearly 20-point gain with little in the way of pullbacks. All of this changed nothing in my very bullis, short-term outlook, which is given above. Non-farm payroll numbers are due out today, and although the stock market is likely to act as though it cares, it's almost inconceivable to me that anyone actually does.

As always, the strongest rallies are being driven entirely by short-covering. Even so, it can sometimes take a few days to goad bears into stampeding anew. Usually, the latest drivel from the Fed will suffice to trigger a panic that sends stocks into wild spasms. Something has changed, however; for it has become clear over the last few months that it no longer matters whether the news is ostensibly bullish or bearish. Whatever the headline, the resulting movement of shares has invariably been upward. Which brings us to the chart accompanying this tout. Although two days of dithering have failed to push the futures past the red line, a crucial resistance that I refer to as a midpoint Hidden Pivot, there should be little doubt that buyers will punch through it either today or Monday. If and when that happens, I'd lay 4-to-1 odds that the futures will hit the D target at 2169.25 within the next 5-8 days, if not sooner. That would be equivalent to a Dow rally of about 650-700 points. Traders who are familiar with my Hidden Pivot Method may have noticed that the stall the last two days has occurred just shy of the red line at 2095.63 rather than precisely at the line as we might have expected. This is probably because of the 'twin peaks' resistance posed by a double top near 2094 in late April that began a month-long decline. That makes these tops a relatively important obstacle. Once they are exceeded, however, it will be clear sailing all the way to 2169.25. If the rally smashes through the pink line, a 'secondary Hidden Pivot at 2132.44, within the next 3-4 days, it would likely be steep enough to suggest that a blowoff top is in progress. Whatever the case, we should

The quirky rally pattern shown is the one I'm suggesting you use for now, since it allows sufficient room for more frivolity like Tuesday's. If the 2115.00 target is achieved by Thursday or Friday as I expect, it would equate to an approximately 300-point Dow rally. Judging from the way buyers impaled the red line, a midpoint Hidden Pivot at 2068.50, I'd say the odds of a follow-through to the target by week's end are around 80%. That means x, p and/or p2 can all be used to get long 'mechanically'.  If you do so at p, a 2053.00 stop-loss would be required; if at p2, the stop would be at 2084.00; and if at x, then 2021.75. You should attempt this trade only if you completely understand the rules governing 'mechanical' entries. One further note: 2115.00 is by no means a likely terminus for this rally. Using the 1958.00 low recorded on March 10 as an alternative point 'A' low yields a rally target of 2169.25, with midpoint resistance at 2095.63 and a secondary pivot at 2132.44. This lower point A is far more compelling visually than the one at 2012.25 shown in the chart. _______UPDATE (May 25, 7:06 p.m. EDT): Today's Whoopee Cushion rally left my analysis and forecast (see above) unchanged.

We can dispense with Hidden Pivot targets for the moment, since the trendline in the chart (see inset) looks good enough to guide us.  Looking just ahead, although the nasty short-squeeze off Thursday's lows ran out of steam on Friday, look for it to get second wind for a thrust to the trendline. It will make itself felt at around 2059 if the futures get there by mid-day, and I'd be surprised if it gives way the first time it's touched. If it does, however, take it as a sign that DaBoyz mean business and that they are fixing to torture bears for at least a few more days. _______ UPDATE (May 23, 7:08 p.m. EDT): Zzzzzzzz. The trendline noted above will be felt at around 2057.50 midday if this brick should somehow rally. If not and it falls, look for a precise test, potentially tradable, of the midpoint pivot, 2032.48. An easy breach of the support would imply more slippage over the near term to at least p2=2020.38, or, worst case, to D=2008.50.  Use these coordinates on the 15-minute chart to recreate the pattern: A=2069.50 (5/17); B=2022.00 (5/19); and C=2056 (5/23). _______ UPDATE (May 24, 9:35 a.m.): The short-squeeze rally begun in the middle of the night stalled initially at 1258.00, which I would surmise is exactly where the trendline has come in at this hour of the day. At the moment, a second-wind thrust to 1259.25 has occurred.  Let's wait and see by how much the trendline is exceeded intraday; and whether the futures can close above it, which would be undeniably bullish.