E-Mini S&P

I published a link to the chart shown in the chat room Tuesday, then posted it again a few hours later for good measure.  As of Tuesday night it was still valid for any trading decisions you might undertake, although chat-roomers appear to have used the pattern, perhaps prematurely, to get short near p2=2072.19 toward the end of the session. Waiting to get short near D=2084.50 would have been less risky in my estimation, but one could still try getting long using a 'mechanical' bid at 2072.25, stop 2068.00, on a pullback after p2 has been exceeded by at least four points.  If the futures surprise by inching above D, the next logical top -- a high-odds spot to get short, I'd say -- would come at 2087.75.  This target is calculated by simply sliding down to 2007.25 for a point A low.

Predictably, the futures made their low before the opening, then took mincing steps higher for the rest of the day on short-covering. It was a weaker squeeze than I had anticipated, and it raises the odds that the S&Ps will finish the year mucking around in the thick of a supply zone that has been building for most of the year.  I still expect 2016 to begin with a thud and am therefore looking to stake out a short position in the final trading day of the year. Stay tuned -- especially to the chat room, since the betting on this vehicle has been hot and heavy.

Bears should take little comfort in Thursday's price action, comatose though it may have seemed. The holiday-shortened session featured a weak bull-trap rally with about two hours to go, followed by a moderate selloff into the close that could not have inflicted much pain on otherwise giddy buyers. Notice that the end-of-day low failed to breach even a single 'external' low on the hourly chart.  That would have required a print at 2047.50, whereas the actual low occurred two points higher, at 2049.50. That means bulls will begin the final week of the year with a slight edge, even without the boost stocks typically get between Christmas and New Year's Eve. Accordingly, I'll suggest using the 2080.50 target shown as a minimum upside projection for the near term. Traders can use a 'mechanical' bid at 2058.25, stop 2051.00, to get long, but this is recommended only to those who understand the simple rules that govern the tactic. If you're unfamiliar with 'mechanical' trades, stay tuned to the chat room for tips in real time. I've sketched out a hypothetical example that explains it graphically.

The futures have shown slavish obedience to our price targets, moving precisely and more or less predictably in the last few days from one Hidden Pivot resistance to the next. Yesterday, we used the 2058.13 pivot shown (p2 in the  inset) to forecast the intraday high within less than two ticks. It is just as predictable that if the futures exceed p2 by at least 3-4 points today, they will be on their way to 2080.50, where I expect a tradable top of at least short-term significance to occur. As a practical matter, it could still be risky shorting there, since the trading session ahead of the three-day Christmas holiday will end at 1:00 p.m. Eastern. Best bet: a 'mechanical' buy on a pullback to p=2058.13, stop 2051.00, after p has been exceeded by 3-4 points for at least three price bars. I've sketched this hypothetically for your further guidance.

A day's worth of ratcheting short-covering brought the futures almost precisely to the 2035.75 midpoint Hidden Pivot resistance shown. Abetted by nervous bears, however, and even in the almost complete absence of bullish buying, DaBoyz are likely to chomp through it Tuesday night or early Wednesday. That could set up a mechanical buying opportunity, provided there's a pullback that meets our criteria after 2035.75 has been exceeded by at least 4-5 points.  If the futures blow past p or p2 (the pink line at 2058.13) easily, that would indicate that they are likely to achieve the 2080.50 target. I'd be surprised if they get much higher than that this week, no matter how strong the 'seasonality.' _______ UPDATE (8:08 a.m. EST):  The futures have most surely broken out above p=2035.75. However, there was no 'mechanical' entry opportunity because they did not return to 'p'. Sometimes we can initiate the trade nonetheless using 'camouflage'. In this instance, however, there were no such opportunities even on the very lesser charts, since no 'external' peaks were surpassed. _______ UPDATE (4:53  p.m. EST): The futures are moving with startling precision to our Hidden Pivot targets. Today's leap went to 2057.75, less than two ticks from the p2 resistance given above. A 'mechanical' bid attempting to get in at the bottom of the rally would have missed by a few ticks, but we can adjust by relaxing our bids slightly when we're confident the next pivot above will be reached. 

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.