E-Mini S&P

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.

Bears have struggled mightily since the stock market plummeted for a few delightful days in August. The broad averages became extremely oversold during that time but have since bounced repeatedly, and often viciously, disabusing bears of the dangerous idea that making money in a bear market should be easy. They've learned instead that it requires guts, deep pockets and a jittery finger on the panic button just to survive, never mind profit effortlessly. Now, with summer over, they'll be looking for a return to serious business (if the shabby flim-flam game that is Wall Street could ever be called serious). From a technical standpoint, the hourly chart is bearish, targeted on the 1852.50 midpoint pivot shown. That would equate to an approximately 500-point drop in the Dow -- a day's work if sellers come primed for the task by an eventful night in European and Asian markets.  Although the futures could fall a further 130 points before reaching the D target, I'd still recommend bottom-fishing at 1852.50 with a very tight stop, and at 1786.75 if the higher number should give way. As always, you can step up the size if you've been short for the ride south. _______ UPDATE (7:39 a.m. EDT): DaBoyz have triggered off a rather vicious short-squeeze overnight (see above), putting in play the 1948.75 p2 pivot from (on the 30m) a=1867.00 on 8/26.

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.