E-Mini S&P

If you could smell distribution, yesterday's price action reeked worse than dead trout after it has been basking in the sun for a few days. There was no cleverness about it either, let alone something to admire. DaBoyz simply popped the futures the obligatory few ticks above the previous day's high in the dead of night, stopping out any bears lacking in either cunning or daring. From that point on it was all downhill, ostensibly because there were few bears left to cover short positions. From a technical standpoint, I still like the bearish pattern shown, with an easy-as-pie target at 2016.75 that we've been using for a week. For your information, a 'mechanical' short from the green line would be showing a thousand-dollar profit on initial risk of $800. Additional gains of $1400 per contract are possible if the 2016.75 target is achieved, as I expect it will be. Traders can use a 'mechanical' tripwire at p or p2 to get short, but only if you understand how such trades work.  Tune to the chat room for guidance in real time, since there are usually at least a dozen traders in the room who really know what they're doing.

Monday's short-squeeze rally would turn menacing with a print at 2093.75, a tick above the peak labeled in the chart. That would be equivalent to a 250-point Dow rally, which is well within the realm of possibility for a stock market that should probably be trading 10,000 points lower. The bearish Hidden Pivot target at 2016.75 will remain theoretically viable until such time as the point 'C' high at 2079.75 is surpassed, but you should have a damned good technical reason for getting short if you plan to leverage the pivot. There's no point in my going out on a limb here with an overnight trading 'tout', since it would be like trying to predict which way a cockroach will scuddle when the lights are turned on.

The quite-bearish, 2016.75 target that I sent out Thursday night still looks good, as does the punitive ABC pattern from which it was derived (see inset).  The futures fell Friday by only 40% as much as I'd projected, but they looked so bad in the process that we can be confident sellers will finish the job when trading resumes next week.  For the record, my guidance missed the best trading opportunity of the day, since, just to be extra cautious on a Friday, I suggested a 'mechanical' short from any Hidden Pivot level other than 'x'.  When the dust settled on Friday, however, it turned out that a short from 'x' was the only 'mechanical' entry that would have worked -- perfectly -- based on the current pattern. In any case, p2 remains as a potential spot to get short belatedly provided you know how these trades work. Let me emphasize yet again that the decision concerning whether to initiate a mechanical trade rests on one judgment and one judgment alone: the confidence that a trading vehicle will reach its D target come hell or high water.  Yes, the decision is therefore subjective. But if you just 'know' in your gut that a D target is going to be achieved, then you will make money on mechanical trades as often as that gut feeling is correct. A learned instinct, to be sure. Fortuitously, some patterns, to me at least, have 'D' written all over them. The more such opportune patterns you are able to recognize, the more remunerative your time spent trading will become.  The salient advantage of the mechanical trade is that once you have committed to it, there are no more decisions to make, since stops and risk management are automated and strictly by-the-numbers from the entry point

The bounce precisely from the red line has confirmed the pattern and its bearish target at 2016.75. If it's achieved, the implied 35-point drop would be equivalent to about 300 Dow points.  The futures have relapsed to the red line so quickly following yesterday afternoon's rally that the line's decisive breach seems likely. If it happens, subscribers could attempt to get short 'mechanically' at either p or d (but not x this time) on an upward retracement to either of those Hidden Pivots once they've been exceeded decisively for three consecutive bars. If you're not sure how these trades work, stay tuned to the chat room, where there are many subscribers who qualify as experts on the tactic.

All's well that end's well. I noted here yesterday that there was plenty of supply between 2080 and 2090 to put the kibosh on the short-squeeze rally begun the day before. Sure enough, this little piggy poked its snout just above 2078 an hour into the regular session, evidently didn't like what  it saw, then dove 20 points to finish on the low of the day.  From a Hidden Pivot perspective, the futures simply double topped at the 2078.75 target shown (see inset). Do they appear just a wee bit tired up here? It would certainly appear that way. In any event, I'm going to suggest moving to the sidelines and spectating on Thursday, since this vehicle looks like it's fixing to cripple and maim. A couple of subscribers reported using the 2078.75 target to get short, but I won't be establishing a tracking position because both of these guys appear to know what they're doing.

This latest, charmless short-squeeze began its incessant ratcheting on the opening bell, eventually negating a downtrend that had projected to 2019. In the process, it generated a bullish impulse leg on the intraday charts that suggests bears will be mildly on the ropes when regular-session trading resumes Wednesday morning. Look for DaBoyz to take the futures lower overnight, just as they did early Tuesday morning, in order to dry up selling.  There is quite a bit of supply in the range 2080-2090, however, so don't expect buyers to make much headway, even with help from on high.

A day of grueling chop looks like consolidation on the 15-minute chart (inset), but all of it occurred beneath last Thursday's 2060.00 peak. This casts doubt on bulls' enthusiasm, but it won't likely impede further, upward progress if there are no disturbing headlines to greet the day. A 2019.25 downside target remains valid in theory nonetheless and will remain so as long as 2077.50 is not surpassed. But a move to at least 2070.50 would become likely if the red line (p) is exceeded by more than a couple of points. All of this should be of concern only to the most agile traders, however, since frustrating intraday swings seem to be habitual at the moment.

Friday's feeble short-squeeze left me unpersuaded that the broad averages are about to embark on another bullish tear.  Although the rally generated a weak impulse leg on the 15-minute chart, it failed to surpass any significant prior peaks on the hourly chart (see inset).  Bears, it must be conceded, have not fared much better recently. Indeed, they spent the entire week struggling to achieve a modest downside target at 2029.75 that I'd drum-rolled last Tuesday.  The expected bounce came an hour before Friday's regular session began, off a low that was three ticks above our target. As a result, subscribers were denied an easy opportunity to get on board what could have been a $1200 ride. Even as the futures headed higher, I put out a lower target in the chat room at 2019.25. It remains viable, offering not only a precise price objective for traders who want to short this rally with risk under tight control, but a place to try bottom-fishing with the usual tight stop-loss.

Today's weakness was palpable, and yet bears couldn't put this gaseous hoax away. In the early going, the futures dipped for a couple of hours beneath a Hidden Pivot support at 2053.63 (see inset), implying they would eventually fall to D=2029.75.  But 'eventually' never came. Instead, a weak short-squeeze held this cagey vehicle buoyant until the close, leaving a graphic picture (see inset) that begs for the other shoe to drop. The 2029.75 target will remain viable in any case, provided the point 'C' high of the pattern, 2077.50, is not exceeded to the upside. Traders with the patience to hunker down on the 3-minute bar chart may find opportunity in this, but certainly no easy pickings. ______ UPDATE (May 5, 1:47 a.m. ET): The bearish 2029.75 target flagged above remains valid in theory and can be bottom-fished with a very  tight stop-loss. However, bears struggled so hard on Wednesday to hold this hoax down that we should give the benefit of the doubt to any bullish impulse legs that gestate on the lesser charts. At the moment -- 1:44 a.m. -- this appear to be happening on sub-30 minute charts. _______ UPDATE (7:37 p.m.): Zzzzzzzz. No change: 2029.75 is still my minimum downside target.