E-Mini S&P

Thursday's rally encountered little resistance, although it still failed by a few points to reach the minor Hidden Pivot target at 2063.00 shown in the chart. Barring any world-shaking news, we should expect this resistance to give way Thursday night or early Friday, and for the futures to continue toward a 2096.00 target that was first mentioned here two weeks ago when the futures were trading around 2011. There is one spot along the way where you should look for a possibly significant pullback: 2086.25. This Hidden Pivot could repel the rally with enough force to be shortable. If you attempt it, a 2087.25 stop-loss is recommended. We've held a tracking position from near the lows with a cost basis reduced by profit-taking along the way to 1098.00. The very wide stop-loss I'd advised survived Wednesday's nearly 30-point swoon, so we are effectively committed to a swing for the fences. Accordingly, I'll suggest tightening the stop-loss only slightly by using an impulse leg on the hourly chart. This implies that you should exit if the futures  plunge below the 'external' low at 2021.00 recorded Tuesday on the way up.

There's no such thing as a market too crazy to day-trade, but this one is getting close. I put out  a 2048.75 rally target in the chat room yesterday afternoon with the futures trading about six points lower. Several subscribers jumped on it and thanked me a few minutes later when the E-Minis popped to 2049.25. But even before we'd finished high-fiving each other, the futures plunged in a mere minute to 2030.25, on their way to a so-far low Wednesday night of 2021.75. (Note: My downside target then, and now, is 2017.75. It can be bottom-fished overnight with a tight stop-loss.) I view the plunge as just another sleazy shakedown, since it was triggered by news that the EU plans to curtail borrowing by Greece. The story shouldn't have touched off any alarms, since the recent electoral victory of leftist lunatics in Greece effectively cleared the country's path to bankruptcy. The fact that U.S. stocks dove anyway suggests it was just a brazen manipulation by the child molesters, father rapers and mother stabbers who run the game. A further, unintentionally funny note on Greece yesterday came in the form of this headline atop the Wall Street Journal's lead story: Investor Optimism Grows on Greece. We've seen this headline, or something like it, many times since the global financial meltdown of 2007-08, often in connection with that other basket case, Spain. Don't these bozos ever learn?

Late Tuesday night, the futures were consolidating above a minor Hidden Pivot rally target at 2039.00, implying they're developing thrust for an imminent push to the next, at 2048.50.  These targets should be viewed in the context of a bigger-picture target at 2096.00 noted here earlier (see inset). Because some subscribers reported getting long on the basis of yesterday's tout, I've established a tracking position for your further guidance: a single contract with a cost basis that has been reduced by profit-taking to 1998.00.  For now, we'll manage the risk of a swing for the fences with an impulsive stop-loss drawn from the hourly chart. Specifically, you should exit the position on a plunge that hits 2006.75 today. Keep in mind that to trigger the stop, the move would have to be uncorrected on the hourly chart from the time an external low at 2018.00 (9:00 a.m. EST Tuesday)  is exceeded to the downside.

Yesterday's short squeeze from out-of-the-blue was attributed by pundits to trader ebullience over the recent rise in oil prices (or some such thing). Whatever its reason, the rally exceeded the highest Hidden Pivot target I could have projected intraday from Monday's 1973.75 low, suggesting more strength is coming. When minor targets are exceeded and we are in search of a new one, my technical rules call for zooming out to an ABC rally pattern of higher degree. The logical and obvious one began on January 15 with a 1970.25 point 'A' low and projects to as high as 2066.00 over the near term (see inset). The key obstacle between here and there is the 2020.00 midpoint pivot, shown in the chart as a red line, but once the futures have traded above it by at least 2.00 points, I'd infer that a finishing stroke to the 2066.00 target is an odds-on bet. Traders looking to get long,  particularly night owls who might see the trade triggered in the wee hours, should use a breakout pattern like the one I've sketched hypothetically to jump aboard. _______ UPDATE (11:03 a.m. EST): A pattern nearly identical to the one I'd sketched tripped a buy signal at 2020.50. The futures went on to exceed the 2034.00 target by two ticks. Those who did the trade by-the-book would now be long a single contract from an original position of four, and using a profit-adjusted cost basis of 1098.00. If your results so far are in the ballpark with this, you can swing for the fences with what remains of your position.

In theory, the buy signal I'd noted that was tripped last week at 2005.25 is still valid, since the 1982.00 point 'C' low to which it is tied has yet to be exceeded. Also implied is that longs from the time the 'buy' signal tripped last Thursday could still be long. (Note: I advised exiting the position on Friday, a task that would have produced either a small profit or a moderate loss, depending on when you acted.) The takeaway here is not that we should be bullish, but that we are obliged to acknowledge that the S&P 500, despite all of the crazy swings and swoons of the last six weeks, has yet to break down. As such, there are compelling reasons for being long at these levels, just as there are good reasons to be short. For now, we'll stay on the sidelines unless scalping this vehicle intraday. My gut feeling is that a target I'd noted that lies marginally above December's record highs is still valid and that, moreover, it would be an ideal place for bulls to get trapped as never before. I'm not going to drum-roll the target because I don't want to hex it, but you should check the archived touts for the precise number.

Yesterday's rally tripped a buy signal for a ride to as high as 2074.25 over the near term (see inset). That would significantly shorten the odds that a longstanding bull-market target of ours that lies only somewhat higher will be reached. (Check the archive of E-Mini S&P touts for the precise number.) Most immediately, subscribers who got long yesterday at the 2005.25 trigger point should be prepared to take a partial profit on half the position at the 2028.25 midpoint pivot. I am assuming that some of you did the trade because I called attention to the set-up as it unfolded during yesterday's 'impromptu' trading/analysis session online.  If you're long, please let me know in the chat room and I'll establish a tracking position for your further guidance. Presumably, any contracts still held above 2074.25 would be purposed on a finishing stroke to our bull-market target (a number that we've planned to short aggressively). _______ UPDATE (9:05 a.m.): A conventional 'test' of the 2000 level? Whatever the reason, index futures have sold down hard overnight, with the E-Mini S&Ps falling the equivalent of 200 Dow points. Longs held from Thursday's close would be using a mechanical stop-loss  at 1981.75, but you might also have exited on an 'impulsive' one around 2002.50, since that's where the lesser charts went impulsively bearish this morning at around 7:57 a.m.  Again, please let me know in the chat room and I'll provide tracking guidance. My gut feeling is that stock will rally higher at the bell, but that the bloodbath will resume as the day wears on. _______ UPDATE (10:44 a.m.): As anticipated in the previous update, stocks rallied at the opening but are now collapsing. Anyone with a long position in this vehicle had a chance to exit as high as 2012.50 before

The bearish ABC pattern shown is so outlandish that we might use it to make the bullish argument that its 1944.00 target is unlikely to be reached. Hidden Pivot aficionados will understand why the target is illegitimate and therefore unpromising. Mainly, it's a matter of the point 'B' low being as sausage-y as they get. For those of you who are unfamiliar with the term, it denotes an A-B impulse leg that has failed to actually 'impulse' beneath a previous low (in a downtrend, as has occurred here), or above a previous high (in an uptrend). Such patterns do not usually work, and even when they do, the targets and midpoint pivots they yield cannot be relied on to provide precise swing points.  And yet, I wouldn't hesitate in this case to recommend bottom-fishing aggressively at 1944.00, using a stop-loss as tight, perhaps, as five ticks. For now, however, I'll simply assume that the target is out of bounds and that the futures are due for a rally beginning somewhere above 'B'.  A flimsy pretext, I know. Take a good, hard look and decide for yourself. There is no mystery about the pattern; it is what it is.

Yesterday's selloff, nasty as it seemed, was just the correction of a subtle, bullish impulse leg generated last Friday on the daily chart. Notice that the intraday high exceeded a peak made two weeks earlier by 0.50 points (two ticks).  It's a subtle impulse leg, to be sure, but it needn't have been any more obvious or robust to qualify the weakness of the last three days as merely corrective.  All of which implies that our longstanding target at 2105.00 is still very much in play. Its attainment would represent only a marginal new all-time high, but we'll short there aggressively anyway, since it is just the kind of place where bulls could get trapped worse than Gen. Custer.

The 15-minute chart (see inset) suggests the futures will have difficulty avoiding a run-up today to 2068.75, the modest target of a rally begun last Thursday via an impulsive rally from 2019.25.  There's a very minor Hidden Pivot resistance along the way at 2062.50, but its close proximity to Friday's tired peaks makes it less than opportune for getting short. Officially I'll recommend shorting two contracts at 2068.75, stop 2070.25, but only if you've been long for at least five points of the implied ride up. The easiest way to get long, although certainly not the least risky, would be to buy a pullback to the midpoint pivot at 2047.25 and tie the position to a stop-loss a 2040.00. The implied entry risk would be a third of what you stand to gain if the futures eventually reach the 2068.75 target. ______ UPDATE (9:32 a.m.): Weak earnings from some major companies -- of all things! -- have caused the Dow to open nearly 300 points lower. This has aborted the E-Mini's seemingly in-the-bag rally to 2068.75 and generated a short-term bearish target at 2018.00. If you took the mechanical entry at 2047.25, the loss would have been $350 per contract.  Keep in mind that using 'camouflage' to get long would have pared the entry loss to a few ticks or even have produced a gain, since the futures rallied 5.25 points off an interim low at 2048.50.