E-Mini S&P

The pattern highlighted in the chart is gnarly but bullish despite the fact that two days of strenuous effort and grunting have failed to push the futures even to a modest 'secondary' Hidden Pivot at 1908.75. That seems likely to happen today, and if it occurs early enough in the session, further progress toward the 1923.25 'D' target would become an odds-on bet. I'm not even going to bother with an alternative scenario, since sellers seem too enfeebled to offer even modest resistance to short-covering bears. Unless there is news of the most disturbing sort, look for the week to end on a bullish note.

The skepticism that colored my previous tout proved warranted when the futures took a sharp dive Wednesday after head-faking above some prior peaks around mid-day. The rally trapped bulls and bears alike, causing the former to get stoked with short-lived enthusiasm and the latter to panic with a frenetic burst of short-covering. What ensued when the frenzy cooled was a 46-point reversal, equivalent to a 350-point plunge in the Dow.  What will the Smart Guys, aka DaBoyz, do now?  The futures were up nearly 15 points in after-hours trading, goosed by a fresh binge of short-covering on the usual, extremely low volume. Surprise surprise. It smacks of distribution, of course, but that won't be much comfort to shorts who are presently caught in the ringer. When the pressure relents, presumably overnight or early in Thursday's session, my gut feeling is that the broad averages will come down hard. Although we shouldn't get our hopes too high, if stocks are trading in merely moderately positive territory at the opening bell, look out below! Alternatively, in the unlikely event shares push higher, use 1923.25 as a target. It can be found on the 30-minute chart, where a=1851.25 on 1/26, at 5:00 a.m. ________ UPDATE (3:21 a.m. EST):  The nasty, volume-less short squeeze underway at the moment, in the dead of night, projects to exactly 1899.50.

Vigorous as the rally might seem, it is suspect because the "booster stage" failed to exceed last Tuesday's 1907.50 peak.  This suggests that the futures are in a dead-cat bounce, notwithstanding the fact that short-covering could drive stocks significantly higher than we might deem logical before petering out. From a Hidden Pivot standpoint, I am unable to recommend trading the pattern shown, simply because it is not a valid pattern. That relegates traders to the rightmost edge of the chart, where the tiny ABC that I've sketched could conceivably set up a 'camouflage' entry.

The short squeeze that rattled bears so badly on Friday went flatter than an apple in a cider press on Monday. DaBoyz were unable, even, to goose this vehicle above Sunday night's painfully achieved high. The result was a day of tedium alleviated only when the floor gave way in the final half of the session, sending the futures below an 1873.00 target I'd flagged in the chat room.  This hints of more weakness to come, possibly gaining momentum if the usual suspects can't levitate this brick in the early going on Tuesday. The outlook is worsened by bulls' failure Sunday night to surpass the 1907.50 peak recorded a week ago. Based on the foregoing, my current forecast emphasizes the large bearish pattern shown, with a midpoint Hidden Pivot at 1842.63 that can serve as a minimum downside objective for now. As always, a weak bounce from so clear a pivot would portend more weakness at least to the next -- in this case, a secondary (p2) pivot at 1811.81.  Traders can either level to get short 'mechanically' provided our simple criteria for this type of trade are met. If the dam bursts and this sludge-pot falls all the way to D=1781.00, make sure you've been short for at least the last 20 points of the joy-ride if you're keen on bottom-fishing. _______ UPDATE (9:11 a.m. EST): It is the more modest of two downtrending ABC patterns that has prevailed overnight (see inset, a new chart). By sliding the point 'A' high down to the only alternative choice available, we find that the overnight low occurred within 1.25 points of the midpoint Hidden Pivot support, 1852.63. We'll give short-covering buyers wide berth as the new day begins, even though from a 'mechanical' standpoint ES is a moderately appealing short from

Index futures have come slithering out of the gate Sunday night, so quiet and subdued that one could almost forget last week ended with bears caught for a third straight day in a vicious short-squeeze. They had better not make the mistake of underestimating this rally, since short-covering has a tendency to feed on itself until the last bold doubter has been dazed, dismembered and liquidated. How high could the futures go? My minimum expectation is 1939.50, a 43-point thrust from these levels that would equate to a 50% retracement of the New Year's selloff. Any higher and I'd infer bears have trapped themselves into a buying binge that could hit 1971.50 -- a precise 0.618 correction of January's plunge. For trading purposes, I'll suggest using a pullback from just above last Tuesday's 1907.50 peak to get long -- a camouflage trade that will work best if the breakout has exceeded 1907.50 by no more than 3-4 ticks. Alternatively, the first sign that bears have the upper hand would come on an 1881.50 print. I see this as unlikely on Monday unless disturbing news hits the tape.

Amidst Thursday's constipated tedium, the futures never quite got airborne. As is so often the case, they made a key high outside of regular hours, at 11:00 p.m. Wednesday night. After screwing the pooch for the next 14 hours, the March contract somewhat exceeded the overnight high, although not by much. This could hardly have inspired bulls; however it is not bulls who are doing most of the buying these days, but short-covering bears. Are they anxious enough to send the futures into a short-squeeze rally? My hunch is that they are not quite there, but that they are nervous enough to prevent stocks from falling by much as the week draws to a close. In any event, traders should approach this rabid weasel with a moderately bullish bias, given that the afternoon session produced the bullish AB impulse leg shown, along with the beginning of a potential CD leg that could hit 1894.50. That would be no big deal, but if it happens just before the final bell, or if the target is exceeded on a closing basis, the pressure would remain on bears when index futures resume trading Sunday evening._______ UPDATE (9:50 a.m.):  Rarely failing to leave us unsurprised, or to catch us totally awares each day, ES has rallied 26 points so far, to within three ticks of the 1894.50 target that I posted here last night. You could have made as much as $1300 per contract by being long.  Now, use your gains to provide a generous stop-loss on a short from near the highs.

Was that fun, or what! Wednesday's exhilarating plunge bottomed near an 1817.00 target that has been in play since November. Pivoteers had some excellent opportunities to make hay, starting with a bearish call that went out to subscribers at 8:47 p.m. the night before. The March contract was trading for around 1862 at the time, and a short from those heights could have produced a gain of as much as $2900 at Wednesday's lows.  Moreover, nimble traders could have picked up an additional $1150 on the way down, since the futures took a 23-point bounce in the dead of night from 1829.25, precisely to-the-tick where I'd told subscribers to expect a rally of presumably fleeting importance.  When the dust settled after Wednesday's close, the March contract had traded as low as 1804.25 -- 12.75 points beneath the longstanding target at 1817.00. Although this was not much of an overshoot, it was sufficient to do serious technical damage to the long-term chart. Specifically, it breached a key low from October of 2014, generating a fresh, bearish impulse leg of weekly-chart degree just as the futures were completing a bearish ABCD pattern begun back in July. The implication is that this rally is doomed and likely to offer traders an excellent opportunity to get short yet again.  For further guidance in real time stay tuned to the chat room, where traders have been using Hidden Pivots aggressively and with increasing skill.

Although predicting whether stocks will rise or fall on a given day has been no better than a coin-toss bet lately, sellers seems very likely to prevail in the months and years ahead, given the high likelihood that stocks have entered a bear market.  More immediately, the pattern shown (see inset) is so marginally bullish that the contrarian in me wants to give bulls the benefit of the doubt for Wednesday. A theoretical buy signal was tripped at 1870.71, implying traders could buy there, stop 1856.00, and shoot for 1914.50. Instead, however, and less risky, would be to employ a 'mechanical' bid at p=1885.40, playing for a pullback once this Hidden Pivot has been exceeded by perhaps 5 points.  The stop-loss thereof would be at 1875.50. ______ UPDATE (8:47 p.m.): This evening's rally has reversed sharply, presumably for reasons having to do with Wall Street's current obsession with China. Use p2=1848.81 as a minimum downside target, with D=1829.25 possible if p2 gives way. ______UPDATE (9:24 a.m.): My 1829.25 target caught the exact low, to-the-tick, of a 40-point plunge overnight.  A short initiated at the time of the post would have been worth as much as $2000 per contract; and a long from the low an additional $1400 per contract, since the bounce has gone as high so far as 1847.25. (9:40 a.m.: ...and now to 1852.50, worth as much as $1600 per contract on the long side.) _______UPDATE (10:50 a.m.) Events are unfolding at such a pace this morning that I can barely keep up with updates for a half-dozen vehicles that, for the most part, are moving precisely-to-target.  Now that ES has crashed the 1829.25 Hidden Pivot, my longstanding, major target at 1817.00 is obviously in play. I expect a tradable bounce from that number, but if the bounce

A longstanding downside target at 1817.00 remains valid, although last week's timid rally may have further to go before the correction has run its course, especially if crude oil prices rally this week. The futures would become a 'mechanical' short from p2=1888.50, stop 1897.75, but we can reduce the initial risk significantly by using a 'camouflage' entry once 1888.50 is touched. This implies waiting for a downtrending, tradable abc pattern to develop on a chart of minor degree. The tactic is recommended only to those who are familiar with it, but you can seek real-time guidance in the chat room if the opportunity develops. Another possibility would be to short the minor rally target show in the inset, although it may prove to be too delicate if the new week starts with a bang.  One further possibility: Ahead of the short trade, night owls can use the 'camouflage' pattern shown to get long at 'x' if the set-up ripens more or less as drawn. ______ UPDATE (1:45 a.m.):  See my 21:09 post in the chat room for timely guidance on this rally.