E-Mini S&P

Last week ended with a gratuitous price hump -- up big on Thursday, down big on Friday -- that adds to the evidence that the bull market's health may be fading.  The downtrending pattern shown projects to 2024.50, equivalent to a fall in the Dow of about 230 points from these levels. Even so, we'll have to give bulls the benefit of the doubt over the very near term, since the week ended with a short-squeeze upswing. It would have to hit 2082.75 by no later than Wednesday, however, to generate the kind of impulse leg that's capable of propelling the S&Ps to new all-time highs.  Sunday night-owls keen on initiating a trade should looks to do so on charts of 5-minute degree or less. Friday's session-ending short-squeeze was bullishly impulsive, but perhaps too obviously so to offer a good entry spot on the first signal.

The hourly chart was uncorrected the whole way up yesterday, meaning shorts will be on the ropes at the opening bell. This being a Friday, they'll be growing increasingly nervous if stocks take merely a moderate path higher, correcting with shallow breaths rather than the wild swings we've come to expect. Bottom line: It could be an interesting day -- interesting enough to create some bullish buzz ahead of next week.

At the closing bell, the futures were in a tiresome slog that pointed toward the 2031.50 midpoint Hidden Pivot shown. Night owls can try bottom-fishing there with a stop-loss as tight as three ticks, but be aware that the decisive breach of this support would portend more downside over the near term to the 2011.00 'D' target. Thereafter, any lower could turn February's 1973.75 low magnetic. Alternatively, and most immediately, the lesser charts would turn slightly bullish on a pop exceeding 2043.00.  That's equal to an external peak visible on the 15-minute chart (4:45 p.m.),  and a bc-type pullback from just above it could be used to get long.

The broad averages plunged yesterday, and for six hours all seemed right with the world. We were ready for the onslaught despite Monday's rally because of the technical damage done on Friday. Some important Hidden Pivot supports were exceeded then, hinting of the carnage that has followed.  Yesterday (Tuesday), a 1243.50 Hidden Pivot target was exceeded as well, but because the overshoot was just 3.25 points, it's not yet clear whether sellers are done for the time being. My hunch is that they aren't, and that the broad averages will head lower. If so, they would not have far to fall before alighting on a Hidden Pivot support at 2032.75 that could contain the move (A=2115.50 on 3/2; B=2065.50 on 3/6). However, this vehicle would become a bull trade if it pops above the 2054.25 peak labeled in the chart.

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.