E-Mini S&P

Bears spent the entire day constructing a trap to spring on themselves. It worked. In the final hour, starting from a wallow just inches off the intraday low, they punched up a 22-point rally in a little more than an hour -- equivalent to a Dow thrust of nearly 200 points. It looks puny on the hourly chart (see inset) compared to last week's selloff because it was. But it left bears badly on the ropes, presumably ready for more self-abuse when Tuesday dawns.  Expect them to extend the short squeeze to at least 2035.75, a 'Hidden Pivot midpoint' resistance. Night owls who have been long for the ride can try shorting there with a 2036.10 stop-loss, but if the pivot is exceeded by at least four points, it would become a 'mechanical' buy on a pullback for subscribers who are familiar with the simple rules for this type of trade. As always, an easy move through each Hidden Pivot level would imply the next will be reached.

The futures have opened Sunday night with a tentative bounce from Friday's deeply oversold low. Because that low exceeded a 1994.75 target I'd flagged seven hours earlier by several points, we should be skeptical of any rally that fails to exceed at least two prior peaks on the hourly chart. That would imply a move of at least 32 points from these levels, surpassing Friday's 2030.00 high. If and when the downtrend resumes, which is what I expect, we can use the 1959.88 midpoint pivot of the long-term pattern shown as a minimum downside target.  That's a nearly $2000 trade from current levels, but to cut the entry risk down to size we should look to do our shorting intraday, using a 'mechanical' signal from a chart of much smaller degree. _____UPDATE (9:02 a.m.):  The futures have been up as much as 22 points ahead of the opening, but the rally so far is unimpressive, since it failed by 1.00 point to surpass an external peak at 2014.50 made Friday on the way down. The hourly chart is bullishly impulsive nonetheless, albeit weakly. Traders looking for a way in should use 'camouflage' based on this pattern on the 15-minute chart: a=1999.75 (3:15 a.m.); b=2013.75; and c=? (still undetermined).

Bears shouldn't get their hopes too high just because the futures dove sharply after trapping bulls with an overnight feint to 2082.25. On three hours' sleep over the last two days, just before boarding a plane at 8:00 a.m., I erroneously inferred that this almost precisely matched the target I'd sent out Wednesday night. It didn't, but my forecast had been sufficiently bullish nevertheless that several subscribers evidently were encouraged to jump on the rally without hesitation.  Looking just ahead, you should notice that buyers pushed this vehicle above two external peaks (see inset) before it reversed and went into a quite nasty dive. That has left a bullish impulse leg that will continue to exist unless 1992.25 (the point A low) is exceeded to the downside.  Any rally of at least 22.50 points in the meantime would trip a theoretical buy signal while also warning bears not to get too aggressively in the way._______UPDATE (7:58 a.m. EST): The correction has come down precisely to the 2012.00 midpoint support of this pattern on the hourly chart: a=2050.50 (Thursday, 3:00 p.m.); b= 2015.50 (8:00 p.m.); and c=2029.50 (11:00 p.m.). (Click here to see a chart that illustrates the pattern.) Night owls could have reaped a gain of as much as $600 per  contract on the initial bounce, but this is not the time to get in, even if the support is still holding so far. If it fails, look for a further drop to at least p2=2003.25, or to d=1994.50 if any lower.  Both of these pivots should evince a bounce sufficiently precise for bottom-fishing with a 1.00-point stop-loss. They can also be used to establish mechanical short positions, provided our criteria for this type of trade are met (the details of which are proprietary and covered in great detail in

The bullish pattern shown can be bought 'mechanically' on a pullback to 2052.00, stop 2045.00, for a shot at 2073.00. If you're uncomfortable with the implied seven points of theoretical entry risk, you can look for your trigger, camouflage-style, on charts of 15-minute degree or less.  The advantage of this strategy is that it would allow you to get long even if the pullback does not come all the way down to 2052.00.  If the futures seem eager to go even higher than 2073.00, where I expect discernible resistance to occur, gear for 2086.75, a Hidden Pivot target derived by sliding the point 'A' low down to December 14's nice one-off at 1996.50 (2:00 p.m.) ________ UPDATE (7:53 a.m. EST): The target worked nicely -- it missed the so-far top of 17-point rally by a single tick -- but the pullback didn't come down far enough for subscribers to load up at p2. I had a feeling that would happen, and that's why I mentioned that 'camouflage' would get you aboard regardless. I'd be interested to hear from anyone who did the trade, since I'm always trying to improve the format of my recommendations.

Tuesday's strong rally topped to-the-exact-tick at a 2045.75 target I had posted in the chat room 25 minutes before the opening.  Judging from posts in the room during the day, at least a few subscribers were able to make hay with the target, a minor Hidden Pivot. I am not establishing a tracking position, however, because the S&Ps have been too squirrely. This may seem like a contradiction, since we were able to nail most of Tuesday's swings almost to the penny. But that's because the charts we used bore valuable price information that had accumulated overnight. My end-of-the-day advice was to cash out -- in this case for as much as a $750 profit per contract. As we attempt to repeat our success on Wednesday, the best way to stay apprised in real time will be to monitor the discussion in the chat room. It's the best I've seen in a while, drawing quite a few active traders who know how to use the Hidden Pivot Method and who have been sharing timely ideas generously. Looking just ahead, although the futures have rallied 62 points off Monday's low -- equivalent to 500 Dow points -- it's just a lot of noise, technically speaking. Bulls will need to push above prior peaks at 2058.75 (12/10)  and 2071.75 12/9) before the rally becomes worthy of our attention. DaBoyz are surely going to attempt it on a day when the Fed blatherer-in-chief, Janet Yellen, flaps her yap. It's bound to be crazy, so if you're looking for entertainment -- and opportunity -- come join us at ringside! Click here for a free trial subscription that will allow you to access the chat room, Rick's daily touts and intraday alerts, and 'impromptu' analysis sessions online for two weeks.

The stock market continues to act as though every speculator on the planet is short: minor downside targets are going unachieved; fleeting lows are quickly reversed, leaving gratuitous feints and swoons all over the intraday charts; and, DaBoyz have been 'running 'em up' in the final minutes of the session. Considering that all of this has been occurring in the context of a downtrend that has prevailed for more than a week, one might think it would be easy money for bears. In fact, aside from last Friday's steep plunge, it has been torture every inch of the way. As for the bulls, although they may have found the short-squeeze rallies exhilarating, their losses have mounted over the past week due to the downtrend, however erratic. Considering the foregoing, I'll eschew a detailed prediction for Tuesday and mention only that Monday's bullish reversal came from a predictable spot -- i.e., the 1986.75 target of the pattern shown.  That should be it for the downtrend for a while. However, because the target, a fairly important Hidden Pivot support, was breached by a relatively significant 5.25 points, we shouldn't expect a sustained bounce. Yellen is scheduled to blather and bloviate on Wednesday, and if there is anything in her speech that can be construed as even remotely bullish, DaBoyz will use it to squeeze from beleaguered bears what little life remains. The implication, of course, is a rally that would trap bulls even more viciously. UPDATE (1:47 p.m.): The 2045.75 rally target that I posted in the chat room nearly five hours ago (see 9:05 entry) appears to have caught the high of the day to the exact tick.  I will establish a tracking position if I hear from at least a few subscribers who used it.

Bears were on the offensive Friday, closing on the 1993.50 target shown when the music stopped. Even if the bloodfest continues on Monday, look for a bounce from the target. It could be tradable, so be ready with a bid there and a tight stop-loss if you're keen to play. As always, if the support is decisively exceeded (i.e., by more than two points) the first time it's touched, that would indicate more weakness to come. An additional trading opportunity from the short side could materialize if the future rally back to either p2=2001.50 or 2009.50 in a way that meets our criteria for 'mechanical' trades. Ask in the chat room if you're uncertain about this. ________ UPDATE (8:55 a.m. EST):  Having evidently exhausted sellers, DaBoyz are short-squeezing this hoax before the bell -- so far 16 points off a 1991.25 low. Although the low exceeded my target by 2.25 points, a sign of more weakness to come, it's not quite enough for us to infer that bears will necessarily romp today. Even so, they've got the edge.

Yesterday's tout suggested sitting back and watching this vicious little sonofabitch screw with the heads of bulls and bears. This proved to be good advice, since the day consisted of a frustrating series of fakeouts, feints and swoons that netted out to zero and which would have challenged even the most patient traders.  For Friday, as a gift to subscribers eager to beat their heads against a wall, I am proferring the three targets shown. They comprise a series of descending Hidden Pivot supports, each of which could be used either for tightly stopped bottom-fishing, or perhaps 'mechanical' shorting. Two of the three are well away from 'structural' supports and therefore should work particularly well for bottom-fishing. That implies that your stop-loss could be as tight as three to five ticks.________ UPDATE (8:43 a.m. EST): The first two pivots worked precisely for bottom fishing overnight: a seven-point bounce worth as much as $325 per contract occurred from within two ticks of p (2036.00); and a six-point bounce occurred from within two two ticks of p2 (2024.50). The D target at 2013.25 is in play, although no mechanical short has been signaled to it yet.________UPDATE (12:10 p.m.):  The futures are down just a few points at the moment, but there may be more weakness than is readily apparent, since the 1993 target gave way so easily. To generate a new target, I suggest using the following coordinates on the 30-minute chart: A=2058.75 (12/10); B=1996.25. That yields Hidden Pivot supports p, p2 and D at, respectively, 1988.25, 1972.63 and 1957.00. Since p has already gotten crushed, 1972.63 should serve for now as our minimum downside target. 'Mechanical' trade opportunities will be cach-as-catch-can.

DaBoyz revealed a hint of weakness yesterday when the short squeeze du jour peaked without exceeding a key high at 1992.75 recorded on August 27. That was the apex of the bounce from the bombed-out lows of Black Monday, but it is also the point 'C' high of a bearish pattern pointing much lower. If DaBoyz could have surpassed that high, they would have. They may yet succeed, but it should have embarrassed them that they couldn't do it on the first try. Bears will breathe a sigh of relief, but if they breathe it too deeply or for too long they are going to get trapped again.  My hunch, though, is that the failed rally will add weight to selling in the days ahead -- and at night, since, as we know, when DaBoyz get desperate, they go for broke in the wee hours, when supply is thin and any sort of news is easily amped. I've included a chart that emphasizes the bearish big picture. It implies that the next swoon will bottom near 1861.50 -- equivalent to a 700-pooint fall in the Dow. A 'mechanical' short may be possible once the green line has been decisively breached again, but I'd suggest sticking with 'camouflage' entries and smaller patterns. Stay tuned to the chat room for guidance in real time.