I've disdained the brute power of a 1200-point rally to focus on a simple target at 6051.50 that could conceivably stop the charge. Of course, it never feels like the trend is about to die when it has come this far and lies within easy distance of the old highs. Even if they are achieved, however I'm going to reserve some skepticism for the question of whether the breakout will be marginal rather than the start of a significant new leg up. I doubt it will prove to be the latter, but there's no point getting heavily invested in outcomes attributable more to mental illness than to the rational actions of investors. The target can be shorted, but only if you know how to control the entry risk so that it stays theoretically below $225 per contract.
Although I no longer expect the June contract to achieve a new record high, it can still be bought 'mechanically' on a pullback to p=5483.88, the midpoint Hidden Pivot of the pattern shown. The textbook stop would be 5266.75, implying a theoretical entry risk of nearly $11,000 per contract. It should be possible to cut that down to around $250, however, by using a 'camo' trigger fashioned from an intraday chart, so that's how we'll plan on getting aboard if the opportunity arises. Nudge me if I'm in the chat room then and we can plot this one together. _______ UPDATE (May 27, 5:08 p.m.): DaBoyz left shorts badly bleeding and hanging on the ropes with today's short squeeze. They were warned when last week's low on Friday narrowly missed touching a theoretical, major sell signal at 5742.00 (see inset chart).
Although the rally may already have begun to feel the magnetic pull of the old high, that is no assurance a new high will be achieved. It will first have to push past a Hidden Pivot resistance at 6128.25 that has the potential to stop the rally dead. The effect is likely to be precise if it occurs at all, so you won't have to ponder price action for more than an hour or two once the target is hit to figure out what might come next. The target is worth shorting provideddd you have the chops to pare entry risk down to 3.00 points or less per contract.
The futures did nothing last week to allay suspicions that the no-longer-exciting move off early April's low is just a garden-variety bear rally. Although it exceeded my 5736.00 target by five points, the fact that one needs a microscope to see this on the weekly chart means we should treat the resistance as intact. If buyers get decisively past it, I will be the first to guarantee 5867.00 as a minimum price objective. But we'll remain disciplined for now, and that means bulls must prove their case every step of the way. I may put out a trade in the chat room this week because this vehicle's minor swings are so easy to read. Stay close to the room if you're interested. The trade will likely happen too quickly for an email blast to be of much value, but if I see an opportunity developing lazily, I'll notify everyone.
The slimeballs who manipulate this stock for a living made full use of a short-squeeze opportunity when Microsoft announced earnings after Wednesday's close that unsurprisingly surpassed estimates. What could bears have been thinking?? DaBoyz kicked off the celebration with a $40 rally after the close, then worked their criminal magic again on Friday's opening to hoist the stock a further $10. Realize that no stock changed hands during the spectacular first stage of this maneuver, and only a relative handful of shares traded on the second. The result was an approximately $317 billion contribution to the financial realm's gaseous 'wealth effect'. Most of it came in mere nanoseconds, since that's how long it takes to create an enormous gap on a chart. This is a feat that mere bullish buying could never have hoped to achieve. It required mainly the arrant stupidity of shorts, who dependably acted as though the risk of getting blown out of the water was negligible. If I had to guess where MSFT, financialization's chief instrument for adding fake money to the system, is headed, I'd say to xxx.xx. I don't want to queer the bold, Hidden Pivot magic of this number, so I'll post it only in the chat room.
The futures ended the week a hair shy of a 5736.00 target I'd posted in the chat room. This would have merited an aggressive short if the target had been hit, ideally with at least 90 minutes remaining in the session. Alas, we'll have to reserve these ambitions, since it will be a new game when the futures start to trade again ahead of Monday's opening. The target is still shortable, but squeezing off the trade could be harrowing in the thin-volume nervousness of Sunday evenings. If the June contract blows past 5736.00, be prepared to short the next target aggressively, a Hidden Pivot 'd' target at 5867.00.
The futures were bound for the 5787.25 target shown when the closing bell ended Friday's v-shaped rally. The implied 4.2% gain would put the June contract within shooting distance of old record-highs just above 6200. A move to 5787.25 seemed assured when the trading week ended, since the intraday low occurred precisely on a Hidden Pivot midpoint support. Strong uptrends are supposed to produce weak retracements, according to the rules of my system, and that perfectly describes what happened on Friday. There could be an opportunity to scalp a pullback from p2=5623.00 on the way up, but your trading bias should remain bullish otherwise.
As last week began, rates on the Ten-Year Note looked ready to jump to 4.58% from an already uncomfortable 4.40%. Instead, they eased sufficiently to suggest the trend will continue down to 4.09%, the 'd' target shown in the chart. That might be the most we can hope for, but if the weakness penetrates the 'hidden' support at that level, it could portend more slippage to 4.07%, or even 3.90%. These are somewhat different from the potential lows we were tracking earlier, but the graph looks equally capable of giving us an accurate read over the next 3-5 weeks.
The futures spent the entire week fraternizing with three of four Hidden Pivot levels of the pattern shown. It's peculiar that the bounce from p and p2 missed their respective levels by a tick or two, but there's no reason to think the action at d=5156.75 will be any different, especially since it coincides with the too-obvious low' at 5146,75 recorded on April 10. A Mini-Cooperful of clowns is likely to converge there when it is closely approached, so don't bet too heavily on a precise turn, even if a reversal from near there is likely.
Although the futures have rallied nearly 700 points from last Monday's Hidden Pivot low, their failure to surpass the small external peak shown in the inset was timid behavior. It also set up a theoretical 'mechanical' short at 5406.25 (stop 5529.00) that we'll ignore. Instead, let's give bulls the benefit of the doubt for now, meaning we should expect a thrust above the 5528.75 recovery high shortly. Alternatively, a relapse could send the futures down to as low as d=5038.75 in search of traction (60m, a=5322.00 on 4/4). You could bottom-fish there aggressively with a stop-loss as tight as 2-3 points.
