E-Mini S&P

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.

The futures spent Wednesday tracing out yet another gratuitous hump that would have enriched few, whether bulls or bears. The rally portion of the hump was inconsequential because it failed to exceed the previous day's high.  It was prompted by "news" of the latest drivel from the Fed, and although the initial, upward frenzy gave way to an equally demented plunge, bears shouldn't get their hopes too high that this could be the beginning of a significant selloff. As DaBoyz have proven time and again, they can hold stocks at least buoyant on days when there are practically no buyers around. Lest bears despair of the possibility that the bull market -- 74 months old and driven by smoke, mirrors and brazen hoax  -- will ever end, feast your eyes on the accompanying chart. It shows a still unachieved rally target at 2138.00 that would represent a marginal gain above Tuesday's high. However, because that important Hidden Pivot coincides with an even more important midpoint resistance at 2138.50 from a far larger pattern, I am recommending that you get short up there as aggressively as your nature will allow.  If the opportunity pans out, look for me in the chat room for more-detailed guidance. _______ UPDATE: (6:45 p.m. EDT): Thursday's sleep-inducing shuffle did nothing to change my outlook. Knowing Mr. Market the way we do, we shouldn't be surprised if he has this vehicle butting up against 2138.00 rambunctiously just as our otherwise care-free three-day weekend is about to begin.

The 2134.00 rally target flagged here yesterday, which I'd said would be achieved "very precisely," did in fact catch the exact high tick of the day. It would have allowed subscribers to get long on the way up, for a profit of as much $350 per contract; or to get short at the high just prior to a 12-point dive that would have produced a gain of as much as $590 per contract.  The short triggered at around 3 a.m., when most U.S. traders were sleeping. However, one subscriber reported in the chat room that he'd set up an automatic short at 2134.00 before turning in, and that when he  awoke the next morning to find the position nicely profitable, he covered the short at 2126.00 for an $800 position gain. Looking immediately ahead, the balky selloff following yesterday's top produced some minor, bearish impulse legs, one of which could conceivably produce an actionable set-up for night owls.  Specifically, using a stop-loss no wider than three ticks, you could try bottom-fishing at either 2122.00 (p2), or at 2120.75. 

Considering there are four separate patterns of different degree driving the futures higher on the weekly chart alone, it's remarkable that the best bulls can do is worm their way to a merely marginal new record high as the new  week begins. DaBoyz are simply marking time, seemingly confident that on days when there is zero buying power, even from short-covering bears, they can still hold stocks aloft.  And on days when some meaningless piece of  economic news hits the tape, goading shorts into a nitwit frenzy, that's when big rallies come cheap and easy.  What can we expect in the days ahead?  Most immediately, look for more upside to the 2134.00 target shown. I expect the hit to be very precise, given the exact confirmation of the 2106.75 midpoint pivot last Wednesday.

Although trading at record highs, the stock market continues to look like hell. On Friday, buyers pushed this vehicle marginally above the previous day's peak before stalling precisely at the 75% pivot, 2121.75. The futures opened on mild weakness Sunday night, hinting that DaBoyz are accumulating contracts in order to unload them at higher prices. They don't know about the 2135.75 'D' target or its stopping power, but that's the number we should use as a minimum upside objective for today. You can short D with a stop-loss as tight as three ticks, stepping up the size of your position only if you've been long on the way up and are reversing the position; or, if you use 'camouflage' to initiate the short.  Wherever the minor uptrend tops, we'll want to pay very close attention to the corrective abc that follows, since, if it overshoots its 'D' target, that would be evidence that a correction of major degree has begun. If the futures instead correct quickly and unexpectedly rampage higher, we would use the  2138.75 target of a larger pattern (A=2038.00 on 4/3); and thence 2174.25 (A=1966.00 on 2/2). These Hidden Pivot resistances are sufficiently clear that we should expect a tradable pullback from each.  If it doesn't come, assume there's real buying power pushing the rally.

Short-covering -- the only source of buying power these days -- was noticeably lacking yesterday, preventing the futures from making even a marginal new high above Tuesday's. The day ended with bears somewhat dominant and this vehicle presumably headed to the 2072.75 target shown (see inset). Absent any disturbing headlines, however, it's liable to be a struggle to push this vehicle lower. Indeed, traders might as well try bottom-fishing with tight stops at 'p' and/or 'D' as shorting near the green line.  If p=2089.75 is decisively breached, a rally back up to the pivot would set up a 'mechanical' short there with a stop-loss at 2096.00.

Yesterday's rally left me wishing for just a little more, the better to get short at a fat price. However, since we seldom get what we wish for in this game, perhaps we should resign ourselves to either a wicked squeeze that guts bears before topping; or more likely, given the glum earnings reports for Q1, a continuation of the tedious ups and downs that have characterized this bull since last December. Most immediately, however, we should bring a bullish bias to our trades, since yesterday's somber rally generated a positive impulse leg on the lesser  charts (although not on the hourly). Caution is warranted, since Freaky Friday conditions will obtain -- but also because anyone who tried to leverage the ostensibly bullish pattern shown became road kill.