E-Mini S&P

The yellow flag that I hung out here yesterday was just ahead of yesterday's nasty selloff.  The 2105.00 rally target (see inset) remains viable nonetheless, and we should plan on shorting there aggressively if we get the chance. Late Monday night, there  didn't appear to be any compelling bottom-fishing opportunities, since the futures were dawdling at a 2011.75 correction target that should have produced more of a bounce than it has so far.  The coordinates yielding this target, on the 60-minute chart, are a=2082.75 on 12/11, and b= 20378.75 on 1/2.

The dirtballs and hosers charged with minding the store Sunday night took the E-Mini S&Ps down 10 points -- no surprise there -- but they've brought the futures back to unchanged perhaps too early in the night for us to infer they're planning to squeeze stocks higher at the bell. It looks more like DaBoyz are trying to extract as much mileage as they can in the wee hours in order to distribute stocks ahead of the opening.  We should be on our guard in any case, since two weeks of trying did not get the futures to the clear and ostensibly 'easy' 2105.00 target shown -- or the even easier 2092.50 target of a lesser pattern. This could be remedied with one nasty short squeeze, but for the time being we should treat it as a suspicious. Whatever the case, it's a cinch that traders and investors were extremely bullish as 2014 drew to a close --reason enough for us to unfurl the yellow flag. ________ UPDATE (11:37 a.m. EST): The futures have gotten whacked this morning, in line with our expectations. They've been down as much as 30 points, while the Dow has been off by as much as 270 points.

<a href="http://www.rickackerman.com/wp-content/uploads/2014/12/After-mid-Deceembers-blitz-the-failure.jpg"><img class="alignleft size-thumbnail wp-image-67029" title="After mid-Deceember's blitz, the failure" src="http://www.rickackerman.com/wp-content/uploads/2014/12/After-mid-Deceembers-blitz-the-failure-122x67.jpg" alt="" width="122" height="67" /></a>Mid-December's powerful two-day rally has given way to a year-ending muddle over the last two weeks. Are DaBoyz perhaps saving their energy for a short squeeze to kick off the New Year? That'd be my guess, but the idea of going home short on New Year's Eve seems so suicidal as to have a certain contrarian appeal. In any case, we'll stick with the two rally targets we've been using for the last week: a minor one at <span style="color: #008000;">2092.75</span> that is shortable, stop 2093.50, if it's reached early enough in Wednesday's session to be cover-able by day's end; and <span style="color: #008000;"><strong>2105.00</strong></span>, a very major Hidden Pivot that's unlikely to be reached by the bell. If it is, however, I'd increase the bet size of any speculative shorts using way-out-of-the-money puts. They should be treated like any 20-to-1 horse -- i.e., not the kind of bet on which you should risk the farm.

Mid-December's powerful two-day rally has given way to a year-ending muddle over the last two weeks. Are DaBoyz perhaps saving their energy for a short squeeze to kick off the New Year? That'd be my guess, but the idea of going home short on New Year's Eve seems so suicidal as to have a certain contrarian appeal. In any case, we'll stick with the two rally targets we've been using for the last week: a minor one at 2092.75 that is shortable, stop 2093.50, if it's reached early enough in Wednesday's session to be cover-able by day's end; and 2105.00, a very major Hidden Pivot that's unlikely to be reached by the bell. If it is, however, I'd increase the bet size of any speculative shorts using way-out-of-the-money puts. They should be treated like any 20-to-1 horse -- i.e., not the kind of bet on which you should risk the farm.

There are many upside projections for this vehicle right now, both major and minor. For trading purposes, I like the one shown. It implies 19 points of upside, worth $950 per contract for (Sunday) night owls nimble enough to catch a ride. The short against-the-trend from 2103.50 will likely be less challenging however, and I'll recommend initiating the trade via a 2103.00 single-contract offer, stop 2104.25. You can widen the stop and increase the size if you are reversing a long position at the target. _______ UPDATE: Zzzzzzzzzzzzzz. Please note that I disseminated a lesser target, a possible impediment at 2092.75, during yesterday's impromptu session.

The first 15 minutes of Monday's session were so haphazard as to suggest that the remainder of the holiday-shortened week will be brain-dead, assuming one regards an upward drift that could rack up several hundred more points "dead" action. The wafting effect was there, to be sure, and although the buying that powered it was thin and emotionless, the selling was even more flaccid. Night owls should look for opportunities to get long on charts of 15-minute degree or less, possibly using the small pattern shown. After yesterday morning's choppy start, though, I'd be careful about jumping on any too-obvious pattern that comes at the bell.

Tuesday's tedious histrionics missed my targeted low at 1955.00, but this Hidden Pivot support/resistance should still be used as a place to bottom-fish. Don't expect it to work as precisely as our targets usually do, however, since these proprietary swing points tend to become a little vague after they've been 'used' once. Think of it as a 'logical' place for a price reversal to occur, and therefore an opportune spot for initiating a trade. The 'camouflage' entry technique will work best here, especially since relatively few other traders know the support exists. Additional caution is warranted because the scheduled release of FOMC minutes could send the futures fleetingly outside of our allotted bands. My hunch is that 'everyone' has placed a bet on volatility, and that as a result, the stock market will be relatively subdued. If you're planning on 'jackpotting' here, my recommendation is to leg into a strangle, selling puts/calls at swing highs/lows that align with clear Hidden Pivot targets. My initial guidance on this references the 1947.25 target shown, but this Hidden Pivot may prove more useful for night owls than for those who will be trading the regular session.

The weekly chart for the March contract makes a strong visual case that December's selloff will hit 1955.00 before buyers find good traction. That's the Hidden Pivot midpoint of the large pattern shown, with a D rally target well above, at 2105.00, that's equivalent to the 2115.50 target we used for the December contract. There's an implied 32-point selloff, worth as much as $1600 per contract, but getting short is likely to be difficult because the mature downtrend will have attracted the interest of more than a few bears.  Bottom-fishing the 1955.00 pivot is another matter, and it's possible we'll be able to find a hook for camouflage if and when it the futures get there, since the midpoint is not on every trader's radar. Stay tuned to the chat room for further guidance if the target is closely approached.

DaBoyz, aka DaSleazeballs, are nudging the futures higher on non-existent volume Sunday night, but my hunch is that this hoax won't get very far. Regardless, tonight's so-far low has already breached -- by three ticks! -- a key 'external' low at 1995.25 recorded on November 4, generating a potent, bearish impulse leg on the daily chart.  Under the circumstances, we'll look to short whatever rally unfolds from here -- presumably at a midpoint Hidden Pivot or a D target. We'll be especially careful and disciplined about this, however, since the weightiness of the downtrend since December 5 will likely have given rise to widespread expectations that the rally is doomed. If events prove otherwise and the futures rally to new record highs, the most logical spot for such a rally to begin would be from the 1964.25 midpoint Hidden Pivot shown. Upside potential therefrom would be to the 2115.50 target that has kept us properly bullish for some time.