E-Mini S&P

The composite weekly chart (see inset) allows us the interpretation that January's low surpassed not only the August 2015 bottom, but the key low recorded in October 2014.  Thus was the sharp selloff last month powerfully impulsive. Moreover, it portends another leg down, presumably within the next 2-4 weeks, to as low as 1669.25.  From a visual standpoint, it is hard to imagine a second leg down as steep as January's. But even allowing for a couple of sideways bars for the next week or two, the futures are unlikely to avoid a test of the midpoint Hidden Pivot support at 1804.63. My gut feeling is that this number will be decisively exceeded the first time the downtrend encounters it, implying further slippage to at least 1736.94, the pattern's 'secondary' pivot.  Regardless, the fact that last month's plunge took out two prior lows of weekly-chart degree all but guarantees that any rally from these levels will fail.  The big moves will be to the downside in the months and possibly years ahead, and we should therefore take greater risks to get short. We did so during Wednesday's weekly tutorial session with a 'forced' short that failed by a tick to catch the high of the 26-point plunge that ensued. We'll keep trying, so stay tuned to the chat room for guidance in real time.

The futures spent nearly six hours yesterday spasming their way to the modest 1860.75 rally target shown. As it happened, the move was tradable using the pattern I'd disseminated Monday night, although the wacky swings generated a point C low that put the trade in the 'counterintuitive' category rather than in the 'camouflage' category I'd originally intended. The futures ended the day on a bullish note, with an impulsive point B high at 1863.75. Because price action was so flaky, however, I'll suggest sorting out entry opportunities in real time rather than according to my best crystal-ball guess. Up or down is a coin-toss at the moment, although I expect the Big Moves to be down and the rallies to be sucker bait for the foreseeable future.

Even with a strong downhill start at the opening, bears failed to hit their mark yesterday -- a Hidden Pivot target at 1817.50 that I'd posted in the chat room Monday shortly before the opening bell, when the futures were trading about 35 points higher.  The actual low occurred at 1821.75 -- a 51-point plunge from Friday's close. Some subscribers reported getting short for at least a part of the ride, however, on a rally to an 1884.75 correction target that came within a single tick of nailing the overnight high.  At Monday's close, the futures were in a mild short-squeeze that had yet to exceed the second prior peak we require to signal a proper impulse leg. But if buyers push this brick the few extra inches needed to get past the 1855.50 peak labeled in the chart, bears had better give them wide berth, since it would signal the likely imminent resurgence of buyers.  Traders take note: A 'bc'-type pullback from anywhere between 1855.75 and 1856.75 could provide a no-brainer entry opportunity for night owls looking to get long with minimal risk. I've sketched this hypothetically for your explicit guidance.______ UPDATE (10:57 a.m. EST): The futures have flounced around for the last 14 hours, negating the trade I'd suggested. They remain too squirrelly to care about at the moment.

Friday's bounce precisely from a secondary Hidden Pivot at 1866.00 has validated the pattern shown, along with its 1847.25 target.  A 'mechanical' short from p=1884.75, stop 1897.25, is theoretically in range, but I'll suggest substituting a 'camouflage' entry instead, since Sunday nights will always be a little too unpredictable to put a trade on autopilot.  A decisive push past 1884.75 would not kill the appeal of getting short, but doing so from X (the green line) would require just as much caution as I am suggesting this evening. Note: At the moment, the 5-minute chart is 'go' for a bull trade to d=1883.50, where a=1867.25.  Night owls can get long for a short (i.e., 5-point) ride to the target via a mechanical bid at p=1878.63.  If you catch a profitable ride north, use it to cushion a wide stop-loss on any attempt to get short. ________ UPDATE (9:23 a.m. EST): Hidden Pivots proved precisely relevant to Sunday night's price action, the futures having rallied to an overnight high at 1884.50 before tanking 41 points to a so-far low of 1843.75.  If you used camouflage to get short as suggested, referencing the 5-minute chart, the first successful entry would have occurred at 1882.75 (2:35 a.m.). Since we're in a bear market, a second leg down today is hardly inconceivable. If so, use this still-developing pattern on the hourly chart to trade: A=1884.50 (3:00 a.m. EST); B= 1845.25 (5:00 a.m.); and C=1856.91, for p=1837.13 (minimum downside projection; p2=1827.31; or if any lower, D=1817.50).

The futures are bound most immediately for the 1165.90 target shown. Although several subscribers reported getting long from around 1143 based on guidance provided here yesterday, I am not establishing a tracking position because the trade did not conform to our criteria for 'mechanical' entries. If Thursday night's price action does, however, it could conceivably set up a 'mechanical'  buy on a pullback to p2=1151.55, stop 1146.75. Initiate this trade only if you understand the rules, but be aware in any case that with a little more work, a 'camouflage' entry can get you aboard at the same level with considerably less risk. As always, an easy move through the target would imply more upside in the days ahead._______ UPDATE (10:25 a.m. EST): The futures have mildly disappointed, selling off sharply after getting no higher than 1164.00.  The 'mechanical' trade from 1151.55 was not possible, by the way, since there was no pullback to the pink line before gold summited.

The recovery phase of Thursday's obligatory swoon was somewhat lacking in vigor, and so the futures ended the day about where they started. The mechanical trade suggested would have been stopped out for a loss of about $750 per contract. Bulls held a nominal edge at the close, if only because the day's gratuitous ups and downs occurred well above Wednesday's bombed-out low. Even so, I'll suggest using the bearish pattern shown to get the jump on Friday's action. It has the virtue of having generated a bounce from the 1870.50 midpoint pivot, confirming the pattern itself. Accordingly, a breach of the actual low at 1865.00 would put the futures on a downward course to as low as 1801.00. That target is unlikely to be reached before next mid-week even if bears are strongly resurgent, but we'll at least have a good idea of how ugly the selling could get if things start to snowball.

Sellers were spent before the opening on Wednesday, allowing DaBoyz to get a running start on the 1953.75 rally target shown. Night owls may have a chance to get long ‘mechanically’ if the futures pull back lazily to the midpoint Hidden Pivot at 1909.25. If so, tie a bid there to a 1894.50 stop-loss and a price objective of 1953.75. A pullback from the secondary pivot at 1931.75 is likely, but if that number offers little resistance, you can infer that odds for a move to D or higher are pretty good.

The 1889.75 target I posted in the chat room at midsession Tuesday's caught the intraday low within three ticks, although only a single subscriber mentioned having used it to trade. The futures have breached it by four points so far during the night session, but it's too early to tell whether bears are going to romp for a third straight day. Rather than guess about it, I'll suggest using an 'impulsive' alert to warn if short-covering has achieved critical mass. In the chart shown, that would imply an unpaused thrust exceeding the 1911.25 'external' peak that I've labeled.  This means that once the rally exceeds the first peak at 1899.25, there can be no significant pullbacks on the 30-minute chart before the futures clear 1911.25. Alternatively, if this vehicle gets hit again, use 1867.75 as a minimum downside projection. You can locate that target on the 30-minute chart using these coordinates: A=1920.50 (2/2 at 8:30 a.m.); B=1889.00 (3:30 p.m.) _______ UPDATE (11:38 a.m. EST):  Both the high and the low targets given above proved precisely relevant for trading purposes, since the futures' range so far has been 1865.00 to 1910.75. Bears obviously lack the moxie to deliver the haymaker at the moment, so we'll have to resign ourselves to yet another day of gratuitous spasms, courtesy of the algos.

The 1939.75 rally target caught the apex of yesterday's bull trap rally within a single tick, allowing subscribers who got long for the ride up, and short for the subsequent ride down, to book a gain of as much as $2000 per contract. The target proved popular, judging from comments in the chat room from subscribers who used it coming, going or both.  Be careful not to pat yourself on the back so energetically that you miss the next turn. As implied by the previous tout, the futures could hit 1971.75 if they get second wind. That would represent a 0.618 upward retracement of January's plunge.  More immediately, the March contract appeared to be the obedient slave of the Hidden Pivot pattern shown. The precise bounce from p2=1917.56 corroborates this, as well as the likelihood of a further fall to D=1914.25 if p2 is breached.  If you stayed short from Monday's high and want to manage the risk of the trade with a fairly generous stop-loss, use 1925.50, where the four-minute chart shown would become impulsively bullish.