E-Mini S&P

It's taken a whole week to get there, but it looks like the futures will finally hit a 2088.25 target that has seemed all but ordained from the outset. Stocks have routinely been feinting lower on the openings, then spending the remainder of the day recouping lost ground on gossamer volume. Yesterday, however, the familiar second act of this tedious dog-and-pony show never happened. Instead, the futures relapsed and stayed down until the final seconds of the day, when a weak short squeeze goosed them eight points higher to facilitate distribution during the night session. This sort of weakness begs to be shorted, but even if you manage that feat, the futures would be a scalp-buy at 2088.25. If that Hidden Pivot is hit in the first 90 minutes, however, it would give the futures a chance to bounce and then relapse again into a dive even nastier than Thursday's.

Asphyxiating tedium has made this a poor choice of trading vehicles for the time being. We spotted an entry opportunity during yesterday's tutorial session with the potential to produce a gain of $500 per contract if the futures rallied just ten points in the remaining four hours of the session.  That would have equaled the impulsive rally that unfolded in the first hour. Lo, the futures tripped our entry signal and were able to gain only four points from that point forward. The implication is that even though we picked a winning trade, and even if we had had the patience to monitor it closely for the rest of the day, we'd have come away with a profit of just $162 per contract.  The 2122.50 target we used is still valid (see inset), but you'll have to decide for yourself whether it's worth pulling an all-nighter to see it through.  A pullback to p=2116.00 after the futures have rallied into the range to 2117.00-2117.75 would offer an opportunity to get long 'mechanically,' perhaps using an electronic platform to do the hard work after you've gone to bed.

Two hours counts as a long-term trend these days, and woe to the trader who takes a position home overnight with expectations of exiting at higher, or lower, prices.  He's liable to see both, but in such rapid succession that a profitable exit will be most difficult to achieve.  Be that as it may, the futures were impulsively bullish at day's end, subject to the buoyant force of the pattern shown.  A 2110.75 print would trip a conventional 'buy' signal, and although we rarely use such signals any more, this one would likely get you safe passage to p=2115.75, provided the signal is flashed in the middle of the U.S. night. Keep in mind that we still have a 2138.00 target above that is worth shorting aggressively, assuming it's ever reached. _______ UPDATE (9:32 a.m. EDT): The trade worked more or less as promised, tripping the 2110.75 entry signal at around 2:05 a.m., and finally reaching the 2115.75 target five-and-a-half hours later.  This was a tedious slog just to book a $250 profit per contract, but it could have been automated on most trading platforms to be executed while you slept.  The overnight high fell short of a not-very-ambitious p2 at 2120.75 -- about par for a stock market that, even trading at record highs, still looks like hell.  Incidentally, if you bought four contracts or a multiple thereof initially, you would still be long half the position with an adjusted cost basis of 2105.75 and a third contract offered at p2, o-c-o with an impulsive stop on the '5'.

A swoon could hit 2097.25, or even 2088.25 before finding support. It's tempting nevertheless to give bulls the benefit of the doubt here, since they seem to be having a slightly easier time of it on days like yesterday, when price action is just slop. On balance, I'll recommend bottom-fishing at 2097.25 with a stop-loss as tight as three ticks. If it's hit, expect more downside to at least 2088.25, a Hidden Pivot that could also be bottom-fished with an extremely tight stop. If you're inclined to trade these targets aggressively, the 10-minute chart is the place to look  for shorts. At the moment, here is the relevant pattern from Monday:  a=2116.75 at 3:10 p.m. EDT; b=2108.75; c=2112.00?

I'd intended to take a short position home over the weekend, but initiating it on such weakness as we saw on Friday is courting risk.  I'd much prefer to get short on strength, especially on a rally to the 2138.00 target that has informed our outlook in recent weeks. However, we'll put it aside for the moment, since it appears more likely that the futures will fall to 2097.25 first, or 2088.25 if any lower. Either of these Hidden Pivot supports can be bottom-fished with a stop-loss as tight as three ticks. If the trade works, it will provide an additional cushion against any shorting we attempt on the next rally. Alternatively, a close above 2116.50 on Monday, or a decisive push above it intraday, would negate not only the 2088.25 downside target, but also my bearish outlook for the near term.  A 2130.50 Hidden Pivot resistance would become my minimum objective at that point.

Once again, our goal of getting short at 2138.00 has been postponed. That's a potentially important Hidden Pivot target, since it coincides with the targets of two patterns significantly larger than the one shown. Our goal is not very ambitious, but it has been challenging nonetheless, since buyers seem to grow timid every time the futures get close to 2138.00. So far, they've gotten as high as 2134.00 -- not quite close enough. However, we'll likely try to get short no matter what on Friday, since the opportunity to leverage a major rally target is too enticing to pass up. I could write a thousand words about how best to accomplish this, but we'll let the market tell us in real time. Stay tuned. Night owls can try getting long in the meantime, since there are several clear, bullish patterns driving this vehicle at the moment.

A 'mechanical' buy identified during yesterday's tutorial session worked beautifully, since the position was never more than three ticks in-the-red. However, I am not establishing a tracking position because the only related trade reported in the chat room was from a subscriber who used the same pattern to get long in the E-Mini Nasdaq. Be that as it may, although the rally was bullishly impulsive on the hourly chart, it was not strongly so, since it would not have required much additional effort on the part of buyers to surpass a couple more 'external' peaks. The rally projects to 2138.00 nonetheless -- a good bet, I should think, because of the ease with which bulls blew past the midpoint pivot. This is also yet another coincident target, along with two other Hidden Pivots of larger degree. Shorts are advised, and I am suggesting a 'camouflage' entry, since I've drum-rolled the target and it is not exactly unadvertised.  If you want to try it the easy way, a 2140.25 stop-loss for a single-contract short at 2138.50 is suggested.

We got done out of a promising short last week when the futures tiptoed to within four points of a 2138.00 target I'd drum-rolled. That happened on Tuesday, whereupon they noodled around near that price for the remainder of the week.  Yesterday's selloff put the target temporarily out of range, but it would probably be a less appealing short if it's hit on a run-up from whatever lows impend. We'll try nonetheless, since, as I noted here earlier, there are two Hidden Pivot resistance points near 2138, implying double stopping power. A further implication is that Tuesday's plunge could conceivably be the start of a more significant decline. We'll let the futures tell us rather than speculate. As the chart shows, the move would become bearishly impulsive on an unpaused drop beneath 2057.00. The hourly chart is another matter, having turned solidly bearish early in yesterday's selloff.

So eager was I to squeeze off a short at 2138.75 on Friday that I was all but certain Mr. Market would leave us at hanging, nervous owners of a position that would have to be carried into a three-day weekend. For better or worse, the futures never quite made it to the target. Will we have a chance to do next week what we had planned to do? The chart shown leaves me thinking that the answer is yes -- that the short distance between Friday's settlement price and our target (corrected by one tick) will be covered without trouble. Even so, it can't hurt to monitor the futures closely for signs of an abc downtrend from somewhere beneath the target.