E-Mini S&P

The futures were hovering just above a midpoint resistance when last week ended, presumably on course for a follow-through rally to the 2125.50 target shown. My minimum expectation is 2111.75, the p2 here, and it may offer a shorting opportunity, since this vehicle has struggled recently to reach D targets of various degree. _______ UPDATE (7:57 a.m. EDT): Once again, the E-Mini S&Ps have demonstrated that they are easily tradable using a 'mechanical' entry, especially at odd hours, and even if they remain extremely difficult to trade profitably during the regular daytime session. At 4 a.m. Eastern, they pulled back precisely to p=2098.00 of the pattern shown -- and no lower -- before rallying 10.75 points so far, to 2108.75. A mechanical buy at p would have required a 2090.00 stop-loss and partial profit-taking (still pending) at p2=2111.75.  _______ UPDATE (May 4, 6:44 p.m.): No change. Yesterday's rally stalled at p2=2111.75 as expected, leaving the 2125.50 target -- still -- as our minimum upside objective for the near term._______ UPDATE (May 5, 8:32 p.m.): I expect the downtrend to continue to at least 2065.50, with a possible bounce from 2077.75.  Night owls can short a return to the 2090.25 pivot, stop 2098.50, but be advised that doing so 'mechanically' would subject you to theoretical risk of $412 per contract. Typically, we look to whittle down risk that large with a 'camouflage' entry.  In practical terms, that would mean shorting the first downtrending abc pattern on a chart of leastmost degree once p is reached on a retracement.

With no Fed-induced nuttiness to pressure bear into covering short positions, stocks fell hard yesterday in line with our expectations.  The bad news -- for bears, that is -- is that the selloff left intact the bullish pattern we'd been using to project a swing high at 2132.00. The point 'C' low of the pattern lies at 2064.50, 5.75 points beneath Thursday's intraday low. Things could go either way on Friday, as is often the case, and so I'll hazard no prediction about the outcome. The somewhat bigger picture is of a stock market that, trading near all-tine highs, has still managed to look like hell.

A lack of bullish buyers hasn't stopped this vehicle from forging relentlessly higher -- short-covering has done nearly all of the heavy lifting since 2009 -- but  DaBoyz seem to be having trouble making even minor headway lately.  Even that old standby, wild swings caused by the latest, meaningless drivel from the Fed, never quite forced the broad averages into positive territory yesterday. Still, the usual headless-chicken nuttiness triggered by the non-news may have saved the Dow from falling 250 points to a still-viable Hidden target. Look for it draw the futures lower today and Monday. Bears were too skittish to try to double the 160-point loss the Indoos were showing around mid session, but they may do better with Fed 'news' out of the way.

Progress to the 2130.50 target shown has been tortuous, to put it mildly. Given its clarity, however, there is little doubt that it will be reached, and precisely. A buy-and-hold strategy is out of the questions, since each marginal new high is giving way to a reaction several times the size of the incremental gain from one peak to the next.  A 2125.50 target also broached here earlier remains valid and should show some stopping power, although my hunch is that the one at 2130.50, which comes from a rally pattern of larger degree, will mark the end of the intermediate-term bull  cycle begun on April 5  from 2038.00. It can be shorted with a stop-loss as tight as three ticks -- more aggressively so if you have been long on the approach, or if you use camouflage.

With the futures in record-high territory, we want to remain alert to even the slightest directional changes, since this would be such a great place for Mr. Market to spring a wicked bull trap.  The clearest pattern we have to monitor the subtle interplay between bulls and bears at these levels is the one shown. It points to a potentially short-able top at 2125.50, although a move to that Hidden Pivot would not become likely until such time as its sibling midpoint pivot at 2114.25 has been decisively exceeded. There are potentially at least three trading opportunities here: 1) a 'mechanical buy' at 2114.25, stop 2110.50, after the futures have traded decisively above the red line (i.e, by ascending into the approximate range 2118.00-2120.00);  2) a 'camouflage' buy once p has been exceeded even slightly; and 3) a short from 2125.50. The last trade is recommended in particular to those who have made on the approach. _______ UPDATE (April 28, 12:20 a.m.): It is short-term bearish that the futures couldn't even rise to the challenge of reaching the modest rally target at 2125.50 given above. However, bears seemed to have little more energy, since they couldn't sell off this brick to 2097.00, the most immediate Hidden Pivot support below. If Apple can't improve on Monday night's performance, however, we might see bears put more than a little more energy and enthusiasm into the task today.

The futures did all their correcting before the opening bell, allowing DaBoyz to short-squeeze the S&Ps on thin volume back up to an important trendline that has seen a lot of action in the last few days. The overnight low at 2080.25 occurred a single tick from the target shown in the inset -- and notice that it did not even fill the gap left by Monday's short squeeze. The fact that it occurred when most traders in the U.S. were still sleeping demonstrates that it's hard to make money working this vehicle even when you know exactly where it's going. With all the head-butting lately, it seems unlikely the futures will simply relapse into a funk. Instead, look for a pop to a new all-time high at 2121.00, a fetching minor Hidden Pivot target. Getting long will be catch-as-catch-can, but night owls should keep in mind that the breakout above Tuesday's highs and the trendline would stir up hysteria that can be easily managed -- and leveraged -- via the 'camouflage' technique. Stay close to the chat room if you want to learn how. ______ UPDATE (10:41 p.m.): The futures got more than halfway to 2121.00 yesterday with a thrust to 2114.50 intraday.  There was no mention of my target in the chat room, so I'll assume no one took advantage of it. It remains nonetheless as a logical minimum rally objective for the near term.  If it is easily exceeded, that would be bullish for next week.

Yesterday's failed rally was not quite the failure it may have seemed.  Notice, for starters, that it pushed just past a trendline that had contained bulls since February.  Of possibly greater significance is that the peak also slightly exceeded another at 2104.75 that was recorded last Thursday. That makes Tuesday's fleeting thrust bullishly impulsive while also implying that the weakness that has ensued will probably turn out to be a consolidation. If we are patient, we should wait for the pullback to fill the small gap circled in red. Even better from a trading perspective would be a retracement that comes down almost to the low I've labeled point 'A'.  Many bulls would be discouraged at that point, presumably lightening the burden of the next rally. I've sketched this possibility with a hypothetical C-D leg that could offer us an excellent opportunity to get long with relatively little risk.

Yet another gratuitous swoon has moved the futures to within spitting distance of new all-time highs. I'll be mildly surprised if they get there this week, since one reason for Friday's sharp decline in the broad averages -- punk Q1 earnings -- will take at least a few weeks to recede from concern.  Under the circumstances, the E-Mini S&Ps are best viewed at the moment as a day-trading opportunity, too risky to carry overnight as a buy-and-hold -- or to short-and-hold, for that matter.

Current touts for DJIA and DIA take note of a trendline well below current levels, but we can use this vehicle for a more finely nuanced picture.  If the broad averages are ready to turn around well short of the line, we should see the E-Mini S&P's hourly chart reverse from the midpoint support of a pattern similar to the one shown (see inset).  Also, if the midpoint occurs anywhere along the middle third of the b-c leg, it could be bottom-fished with a stop-loss as tight as 3-5 ticks. _______ UPDATE (10:54 a.m.): No correction of significance occurred. The futures' biggest pullback overnight was a measly  6.50 points, and that came from an interim high of 2089.75! At the moment, nearly 90 minutes into the regular session, bulls are on a wilding spree, with ES up 18 points.