E-Mini S&P

Bulls squandered a mid-day opportunity on Monday by failing to make hay with a promising impulse leg on the lesser charts.  Instead of rallying to an easy target at 2086.00 (see inset), the futures sputtered out at the 2081.25 midpoint pivot. This corroborates what I wrote here yesterday -- i.e., that last week's nasty selloff likely has farther to go. Traders should avoid going out on a limb, but a bearish bias is warranted. As of Monday night, a minor downtrend -- presumably tradable -- projected to 2071.75 (15-minute, A=2081.75 (3/9 at 3:15 p.m.); B=2076.0 (7:15 p.m.); and C= 2077.50 (8:15 p.m.). _______ UPDATE (12:03 p.m.): The futures are headed to an in-one's-face low at 1244.50 that I somehow failed to notice last night. _______ UPDATE (2:49 p.m.) The futures crashed 2071.75, activating a 2044.50 target that has been splashed all over the chat room for hours. That's where the futures will likely bottom today.

The futures on Friday exceeded the lowest targets we could have projected using the intraday charts. This suggests the weakness is likely to continue, although we won't know how powerful the selling is until we have some longer, downtrending ABCD segments to observe. The futures are tradable nonetheless, but if we stick to the goal of risking only relative pocket change on entries, it will need to be done on charts of perhaps five-minute degree or less. If sellers are about to extend last week's dominance, it will be evident in uptrending ABC patterns that do not reach their 'D' targets -- that in fact fail at midpoint Hidden Pivots.

Yesterday's rally peaked a point from the 2104.50 target I'd provided, so traders could conceivably have made a few bucks coming and/or going. The subsequent drop picked up support at the 2092.50 midpoint pivot shown, suggesting that any further weakness would find traction at 2081.50, the D target with which it is associated. If the futures surprise by going sharply higher, look for a run-up to exactly 2120.75. The key resistance between here and there lies at 2103.00, a midpoint pivot that traces back to a 2082.25 low recorded on  February 20.

The futures spent the entire day transforming a nonsensical opening-bar dive into a bullish impulse leg -- about as gratuitous a swoon as one could possibly imagine. The pattern shown projects a rally target of 2104.50 that would become an odds-on bet if the futures push above the 2098.50 midpoint pivot. The very precise stall at that price implies that if 'D' were to be hit, an equally precise pullback would follow.  Night owls should look to catch a ride north using the 'camouflage' technique on charts of  three-minute degree or less. Alternatively, overnight weakness that breaches 2088.75 would be indicating more selling down to 2077.75 over the near term. Both of these Hidden Pivot supports will remain valid as long as 2099.75 is not exceeded to the upside overnight.

In this vehicle, trades initiated at night tend to be more predictable than during regular hours. Algo activity is less frenetic in the wee hours, and although the thin markets that obtain can present a problem in themselves, our targets seem to work more reliably. That said, the E-Mini S&Ps can slog sideways for hours at night, making 'easy' targets like the one shown an ordeal. Ordinarily, I'd have no qualms about suggesting bottom-fishing at 2099.50 (see inset). But this midpoint pivot should have been hit six hours ago, and the longer it takes to be reached, the less enthused we naturally become. For subscribers with limitless patience, I'll recommend a 2098.75 stop-loss beneath a 2099.50 bid, single contract.

The pattern shown looks whacky enough to work, implying not only that you can buy ahead of the implied 10-point rally, but also get short at the 2123.25 target if and when the futures get there.  Late Monday night there was a trade set-up taking shape using the ABC coordinates shown. Implied entry risk was 2.25 points per contract, so I'll suggest initiating the trade on chart of lesser degree in order to cut that at least in half. _______ UPDATE (10:27 a.m.): The futures topped overnight a tick above the 2113.25 entry price, although no trade was triggered on a pattern of lesser degree than the one shown. It is unusual for a night-time rally to fail so miserably, especially in the absence of news. Something is very wrong with this market -- it is no longer behaving as it did in 2014, and is having trouble making headway even when technical signs are favorable.

More Chinese water torture. It’s easy enough to see where the futures are headed most immediately — in this case lower, to the 2094.75 target. But the trend itself is not tradable because of the wrenching spasms that continue to punctuate moves in either direction. Does this irritable and vexatious change in the stock market’s behavior perhaps portend “something big”? A subscriber raised the possibility Friday in the chat room, and I tend to agree. Yes, I’m already on record with a prediction of a 120-point rally — equivalent to about 1000 Dow points.  But it was based on the broad averages decisively exceeding important target recently achieved — something they have yet to do — as well as a push by Apple shares, a global bellwether, to a $140 target that has grown more distant with the stock’s fall last week to $126. We’ve learned never to count out this rampaging bull, which is about to enter its seventh year. But that doesn’t mean the good times can last forever — especially with negatives piling up as the weeks and months roll by. Sentiment and breadth are not merely menacing, but appalling, existing-home sales have collapsed, and profits of big U.S. multinationals have gotten clobbered by the strong dollar. America’s economic recovery, such as it is, has narrowed to a boom in auto sales sustained by a gusher of subprime lending. Count the Escalades in run-down neighborhoods, and be grateful for it while it lasts.

More water-torture. The futures lurched and spasmed their way south on Thursday, presumably bound for the 2098.25 target shown. It can be bottom-fished cautiously, either via camouflage or a 2098.25 bid, stop 2097.75 (!).  Since the mid-line support at 2105.25 has already been breached, night owls could try shorting from there using camouflage. If you prefer a simpler, mechanical entry, you'll need a 2108.00 stop-loss, but keep it to one contract unless you are well on top of the trade.

The 2126.25 Hidden Pivot resistance shown can serve as a short-term rally target, although an intervening dip exceeding the pattern's point 'C' low at 2099.75 would carry a whiff of menace. As of yesterday, the futures looked game for another leg up. That's because they achieved a target at 2117.25 of somewhat greater degree. Someone mentioned this target in the chat room before it was hit, and although it would have served perfectly as a place to have gotten short two ticks ahead of the 10-point downdraft that ensued, I couldn't recall the target's provenance at the time. (For the record, on the 60-minute chart it was: A=2085.50 on 2/11, and B=2095.00 on 2/13.)  For now, you can short 2126.25 with a stop-loss as tight as 1.00 point, but use only a single contract unless you've been on board for at least part of the implied rally. Late Wednesday night, the most promising opportunity to do so would come at a still-to-be-determined midpoint pivot ('p') like the one shown.