E-Mini S&P

We'll use the bullish pattern shown, with a 2101.75 target, to trade this vehicle in the days ahead. If the target is achieved, it would be equivalent to a Dow rally of about 500 points. Keep in mind that, along the way, trendline resistance flagged here yesterday is likely to make itself felt at 2083.75. You can short there aggressively if you've caught a piece of the rally.  One way to do so would be via a 'mechanical' bid at 2057.00, the midpoint Hidden Pivot. Although the futures have traded decisively above it, the rally has lacked sufficient buoyancy so far to trip a buy signal. For your further guidance, I've hypothetically sketched a series of bars that would change this.

We closed out a short tracking position moments after the close, when the futures upticked to new recovery highs. The trade would have produced a gain of $1350 per contract for anyone who followed the original recommendation exactly. Betting against a bull market that has been moving blithely higher for most of the last seven years is always going to be a longshot. However, the fact that we can get away with it -- get short at key targets and make a few bucks even when we are wrong -- is reason to keep trying. The futures now lie within 2.4% of the record high achieved back in November, but it is by no means a foregone conclusion that they will get there. For now, we can use the trendline shown (see inset) as a minimum upside objective, since there are no valid impulse legs at this level to permit a precise Hidden Pivot calculation. (Note: A target at 2054.00 has come into view. Night owls can try shorting there with a 2055.25 stop.) The resistance comes in at around 2068.00, and wouldn't it be shocking if the futures were sitting there at the closing bell, daring us to make their day.  We won't take the bait, however -- just watch and learn. If you absolutely must get short, I'd suggest using 'camouflage' when 2068 is very closely approached. That implies jumping on the first downtrending abc pattern that crops up on the 5-minute chart or lower. _______ UPDATE (March 30 2:27 p.m. ET): I've revised the trendline so that a 2083.75 target obtains for this week. It looks like a promising place to anticipate a tradable top, as well as to target a long position from current levels. The slope is about -0.75 points per week.

We hold a tracking position consisting of a single contract shorted one tick beneath last week's high, 2047.50. Subsequent profit-taking on three-quarters of the initial position has raised its effective cost basis to 2074.75, indicating a paper profit of about $2500 per contract at current prices.  We'll let the position run for now, using the 2047.75 stop-loss advised here earlier.  That means we are 'locked in' unless the futures recover to new highs. If that should occur, we'll book a profit and look forward to getting short yet again, presumably with the futures at heights at or above the record levels achieved last summer. More immediately, the 2015.38 corrective target is an play -- a minor Hidden Pivot support whose decisive breach would portend still more downside to d=2007.25. Alternatively, a print above 2039.75 would reignite last Thursday's short-squeeze, opening a path to as high as 2054.00 over the near term.

In the chat room, several subscribers reported using the 2047.25 target I'd been drum-rolling here for a week to get short a single tick off the intraday high. The futures fell nine points thereafter, allowing us to cover half of the position for a profit of as much as $450 per contract. For purposes of establishing a tracking position, I've used 2040.00 as the exit price, 1.75 points off the retracement low. That leaves us short two contracts whose cost basis I've adjusted to 2054.50. For now, use a stop-loss at 2051.25. We should entertain no illusions about having nailed a major peak in a bull market that has been blithely chugging along for more than seven years. The purpose of the trade, besides satisfying the urge that each of us permabears has to get short at an important top, is to do so with relatively little stress, and to have a chance of turning a profit even if it turns out that we've been wrong. Of course, this has been true in each and every instance where we've tried this gambit. But that hasn't stopped us from making a few bucks in the process, as seems very likely to become the case here, while having good fun. _______ UPDATE (March 23, 10:55 a.m. ET): The trade has continued to go our way, with a so-far low today at 2031.50 that would have produced an $800 profit per contract for anyone who got short as advised.  Cover a third contract at 2034.25. _______ UPDATE (March 23, 6:53 p.m. ET): The futures traded down to 2026.75, allowing us to easily cover for 2034.25 a third contract of four shorted a day earlier at 2047.25.  Imputing the gain thus far to our tracking position leaves us with a single contract whose effective

I'll stick with the 2047.25 rally target shown to give us a tradable and potentially important top. The ABC pattern from which it is derived has picked up some precise hits at the midpoint and secondary Hidden Pivots (i.e., p and p2), confirming that it is indeed working. Actually that would be an understatement, since a trader could have used either of those price points last week to get long easily with a 'mechanical' bid that was good for a ride of as much as 40 points. If you caught a piece of the move, I'll suggest shorting 2047.25 aggressively with a stop-loss as wide as 2050.25.  As always, a 'camouflage' entry can be used to shrink the initial risk to as little as 3-4 ticks. I'd have felt better if the short had triggered toward the end of Friday's session, since headlines over the weekend are seldom going to be felicitous.  In any event, we are stuck with an unachieved target that could remain so, at least for a while, if stocks fall from the get-go on Monday. In all such instances, the obvious way to avoid getting shut out of a trade that depends on a price reversal from a target that may or may not be reached -- is to use a 'camouflage' entry trigger. ________ UPDATE (March 21, 8:12 p.m. ET):  Zzzzzzzz.  Price action has waxed hypnotic, making the task of getting short from 2047.25 about as appealing as a cheese grater on the shins. The target still looks likely to produce a tradable top, but I cannot come up with a low-stress way to leverage it. At best, the process is going to be laborious, tedious and frustrating. ______ UPDATE (March 22, 4:02 p.m.):  The futures have sold off nine points so far after topping

The 2047.25 rally target shown in the chart (inset) doesn't square precisely with a comparable target that I've furnished for DIA, but it should be close enough to attempting shorting there with risk under very tight control. The ABC rally pattern has worked quite well so far, most recently by way of a p2 pivot at 2024.94 that nailed the intraday high within a single point. It also provided an easy 'mechanical' entry for longs at the 2002.63 midpoint Hidden Pivot. There are two possible trades remaining here: a mechanical buy on a pullback to p2 after it has been exceeded by perhaps 6 or 7 points for a few bars; and a short/exit at 2047.25. As always, you can step up your position size and widen the stop-loss on the short if you've been long on the way up. _______ UPDATE (3:00 a.m.): See the chat room discussion starting at 2:53 a.m. for my thoughts on an alternative target at 2045.50. _______ UPDATE (March 17, 6:41 p.m.): No change, since Thursday's rally, masterfully staged by DaBoyz off a very low-volume bottom overnight, continued to track the Hidden Pivot levels shown in the chart (see inset). If you are long if and when the futures reach the alternative target at 2045.50, short there with a stop-loss at 2048.25 (or perhaps somewhat higher, depending on your appetite for risk). I will update if the futures appear to be settling at the target toward the end of the day, since that would increase the risk of the trade.

The bullish pattern shown points to 2076.25, a target subject to crucial resistance at the secondary pivot, 2035.13.  Regarding its legitimacy and authority, the pattern has two important things going for it: 1) its AB 'booster-stage' rally surpassed the required internal and external peaks, which I've labeled; and 2) the 1994.00 midpoint pivot has picked up two precise hits -- first as resistance, then as support. Notice that if the higher target were to be hit, the rally would still fall shy of the record 2095.75 achieved last November. You can bet bulls and bears would skirmish up there, and that the former would not likely give up until they'd achieved at least a marginal new record high. By then, bears' patience, if not to say their trading capital, would be completely depleted. At that point only bulls would still have something to lose, and that's the argument for at least a nominal move above last year's peaks before DaBoyz pull the plug. In the meantime, swing traders should look for a 'mechanical' buying opportunity on a pullback to p that meets our criteria for this type of entry. Since the implied stop-loss would be at 1980.25 (predicated on ride to at least p2), I'd suggest crafting a more cautious entry trigger using 'camouflage'.  This would entail using the entry trigger on an ABC pattern of sub-5 minute degree once the 'mechanical' buy signal has taken effect.

Yesterday's constipated price action will not have significantly diminished the odds of the 2026.75 rally target (see inset) being achieved. Moreover, p2=2009.56 would become a 'mechanical' buy, stop 2003.75, if it's exceeded by at least five points for three consecutive bars on the hourly chart (and assuming there's some white space beneath those bars). If 2026.75 is easily exceeded, that would presage a further rally to as high as 2042.50, a target derived from using the somewhat lower 'A' at 1913.50.  Alternatively, bears would register a pulse if the futures were to fall below 1995.00 in the early going without having exceeded 2015.00 overnight.

Much as I hate to be the bearer of bad tidings for those of you who have been oh-so-eager to get short -- or perhaps to stay short -- this hoax is headed higher.  Long-time subscribers will have noticed by now that it's no great trick using the Hidden Pivot Method to nail the E-Mini's swing highs and lows within a few ticks each and every day, all day long. What's difficult sometimes is trading the moves. On Thursday, with the futures falling hard on their way to a 1958.00 low, I reminded you that a rally target at 2016.00 was still viable. The next day, I suggested leveraging that target by getting long 'counterintuitively' if the June contract hit 1969.00.  It did, around 2:30 in the afternoon, and anyone who heeded my advice never looked back. That trade proved to be the relatively easy one of the day, since it precisely achieved its 2001.75 target (albeit at 3:15 a.m.) But for those not already aboard, getting a piece of the presumptive next phase of the rally to 2016.00 was like enduring the Chinese water torture. Short-covering ratcheted the futures, one millimeter at a time, toward the 2016.00 target, which I had flagged as a juicy spot to get short. By day's end, however, after rallying 33 points from the previous day's criminally engineered low, the futures had gone no higher than 2012.75. Under the circumstances, it was not possible to get short using my target. Nor should any of you have wanted to, since the intraday high was about to occur minutes ahead of the final bell -- which is to say, ahead of whatever potentially world-rattling news might develop over the weekend. (Note: All bets are off if this does in fact happen.) Which bring us to my