E-Mini S&P

Every minor rally failed yesterday, but I wouldn't bank on weakness ahead of Labor Day weekend. Seasonality should hold stocks boringly buoyant at worst, implying that any trading opportunities will be only for the nimble. The pattern shown looks like it could prove useful, more for bottom-fishing than for mechanical shorts from p or D.  The p2 pivot is especially well located for this, and you may be able to get away with a stop loss as tight as 1934.75 if you put  bid there. _______ UPDATE (11:21 a.m.)  Buoyant at worst?  Not hardly. This morning's selloff has crushed the minor supports I'd given, implying that a bearish pattern of larger degree is at work. There are two, both viewable on the 60-minute chart: 1) A=2093.50 on 8/19; it implies minimum downside over the near term to 1861.50, with a possible mechanical short from x=1927.00; and, 2) A=1983.75, from 8/31. It has a D target at 1886.75, and the pattern has already been confirmed by a precise bounce from p2=1906.00 that is under way.  Incidentally, the so-far 36-point decline is well within the limits of meaningless swings. That said, it is hardly bullish that it is happening ahead of a three-day holiday weekend when stocks typically do nothing.

The very precise pullback from the 1957.50 midpoint pivot confirms not only the bullish ABC pattern, but its 2016.00 target as well. A rally to that number would become an odds-on bet if 1957.50 were to be decisively penetrated to the upside. Night owls looking to get aboard can use a 'mechanical' bid at 1957.50, stop 1947.75, once the futures have pushed above 1966.00 (or so) for at least three consecutive bars. Use this tactic only if you thoroughly understand the rules of the 'mechanical' trade. Incidentally, the bullish target at 2016.00 has not invalidated the bearish one at 1795.75 given here earlier. That would take a print above the point C high, 1992.75.

The futures were a 'mechanical' short from 1927.00 yesterday, stop 1949.00. This is no assurance that the price objective of the trade, 1861.50, will be reached, but it does imply that the odds of this have shortened. Nor is it a worst-case scenario -- just a midpoint Hidden Pivot below which sits another at 1795.75, and finally 1730.25. If that last number is reached, it would be equivalent to a drop in the Dow Industrials of about 2100 points in less than a week. Regardless, 1861.50 can be bottom-fished with a tight stop-loss -- more aggressively if you've caught a piece of the move lower.________ UPDATE (9:25 a.m.): Minutes before Wednesday's opening, the futures were inches from generating a bullish impulse leg with a push above yesterday's recovery peak. This is timid action that I read as weakness.  The (much) lower targets shown in the chart will remain valid regardless as long as the futures do not exceed the point 'C' high of the pattern at 1992.75

Asian stocks are getting trounced again, making it far more difficult for DaBoyz to manipulate U.S. markets in the way they'd like. The E-mini S&Ps have been down the equivalent of 300 Dow points thus far, but it's not clear whether sellers are sufficiently winded to set up the obligatory short squeeze ahead of Tuesday's opening. I wouldn't presume to tell you how to trade so volatile a market by-the-numbers, but if the selloff continues, levels p, p2 and D in the accompanying chart should be used to benchmark the move. As always, the decisive penetration of one would telegraph more downside to the next. There are three possible 'mechanical' shorts along the way, but I am recommending this tactic only for subscribers who need no further instruction.

Yesterday's exceptional short-squeeze probably scared the hell out of the bears, even if it caused us little consternation.  A 49.14 target that I'd aired in the chat room around noon anticipated the intraday high of the nearly $6 rally within 19 cents. The futures were still buy-able at the time, trading nearly $2 beneath the target, but because only one subscribers reported taking advantage, buying a single contract when the futures pulled back to the 47.29 midpoint pivot, I have not established a tracking position. Looking ahead, we can use the pattern shown to leverage the next upthrust, assuming there is one. The point 'C' low is as yet unformed, but in the event that 47.23 survives as a point C low, a follow-through to as high as 52.96 is possible. My hunch is that crude lacks the power for a second-wind rally of that magnitude, and that a stall at the midpoint pivot of the pattern -- speculatively 50.10 as of this moment -- would be likely (and potentially short-able). ________ UPDATE (September 1, 9:36 p.m.): My prediction of 'no follow-through' was putting it mildly. Crude crashed back down to earth, giving up nearly all the gains achieved by the previous day's fraudulent rally. To repeat: The short-squeeze rallies in this vehicle will be particularly nasty because 'everyone' knows crude is going much lower; and because, this time at least, 'everyone' is going to be right. It is of course Mr. Market's job to make certain that 'everyone' does not profit effortlessly or painlessly as events expected by all continue to unfold as anticipated. _______ UPDATE (September 3, 1:12 a.m.): For reasons noted above, don't be distracted by the nasty rallies; they are just short-covering. Under the circumstances, every promising D rally target should be regarded as a shorting

The futures rose very precisely Thursday on Hidden Pivot 'steps', although it took a wicked swoon late in the session to develop sufficient momentum to reach 1992.00, my target for the session. The intraday peak of the day's powerful, 50-point rally was 1990.50 -- close enough for our target to be considered fulfilled. It's anybody's guess whether the arse bandits who work the night shift will be able to squeeze the futures still higher, but if they do, they're likely to meet discernible resistance at 1996.50, a minor Hidden Pivot. The effect will be compounded by psychological resistance at the 2000 barrier. Under the circumstances, the best we can do for now is to wait and see whether short-covering can overcome a major impediment.  DaBoyz are not likely to give up easily.

A Hidden Pivot target that I'd posted in the chat room Tuesday came within a few ticks of catching the low of yesterday's monster rally (see inset). The trade could have been worth as much as $4600 per contract so far. Regardless of whether you caught the move, it has important implications going forward -- especially if you are a bear panting for the chance to short into strength. It's tempting, especially if you believe, as I do, that we are in a full-blown bear market that has a very long way to fall. However, because so many traders sees the rally as highly unlikely to achieve new record highs, it is bound to lure more than a few bears into acting recklessly.  Predictably, the shorter they get, the more the rally will gain in power when they have to cover. Bottom line, we should be prepared for the sort of rally that defies logic and reality and which will exceed all expectations. We'll have a better feel for its power once we've seen how minor corrections play out and the ease with which minor rally targets are exceeded (or perhaps not).  If corrective moves do NOT reach their targets, that will be our first clue that the countertrend will. That is precisely what happened at Tuesday's 8:30 p.m. low: The futures reversed from a  'midpoint pivot' at 1851.75 and never looked back. For real time updates as more craziness unfolds, stay tuned to the chat room, where a hundred Pivoteers will be on hand to provide the play-by-play, just as they've been doing. Click here for a free trial subscription that will give you access not only to the chat room, but to daily actionable 'touts' and bulletins, 'impromptu' analysis sessions online and email alerts.

The pattern shown in the chart, with a horrific worst-case target of 1753.00, is the one we should use for now, since it has been confirmed by a so-far 30-point bounce from within 1.25 points of the 1851.75 midpoint pivot. The target is equivalent to an approximately 1000-point drop in the Dow.  I published it in the chat room (adjusted for a slight error in my choice of point 'a' highs) shortly before the closing bell, but no one seems to have taken advantage of it. Be that as it may, the futures can be 'mechanically' shorted from p=1851.75, and/or p2=1802.25, provided you thoroughly understand the rules of the mechanical trade. Alternatively, the most bullish thing the stock market has going for it is that it will be irresistibly tempting to short it every step of the way higher. A week or two of that attitude, and we could see new record highs.

Get used to seeing the futures spasm wildly, because this is likely to continue for at least a few more weeks. My hunch is that over that time the futures will recoup at least two-thirds of their recent losses, but also test Monday's lows. This implies trading opportunities galore, but only for the very nimble. The point was driven home yesterday, when I needed to zoom down to the two-minute chart to nail minor swing highs and lows. The Hidden Pivot Method works especially well when price action turns violent, but if you're going to try to turn this to your advantage, you'll need to think small, hunkering down on charts of five-minute degree or less. Shortly before 9:00 p.m. EDT, the pattern shown held promise. However, night owls looking for better odds should wait for a pullback from just above the 1912.25 peak shown. That could set up a relatively low-risk buying opportunity even though the night-session rally will have attracted more bullish interest than we should prefer.