E-Mini S&P

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.

The futures topped early and sold off hard Friday, but not before they'd peaked decisively above some minor rally targets I'd flagged. This means the short squeeze that powered the rally is likely to get second wind, with enough power to push this hoax up to a 2096.00 Hidden Pivot target mentioned here earlier. Night owls can use the 2041.00 correction target shown to attempt bottom-fishing, but because Friday's close was right on top of it, the pivot may not survive the resumption of trading Sunday evening. Under the circumstances, I'd suggest looking for the turn, and crafting an entry opportunity, on charts of 5-minute degree or less. This 'camouflage' trick may have lost its potency during the regular session, but it just might work in thin trading on a Sunday night. _______ UPDATE (10:41 p.m. EST): The futures are down the equivalent of 100 Dow points, trailing Euromarkets that have plummeted on news that political power in Greece has swung to the lunatic left.  The weakness of European stocks is understandable, but don't be fooled by the sympathetic reaction in the U.S., since the selling has been contrived to part widows and pensioners from their shares at distress prices.

Yesterday's tout got it just right with the idea that once shorts' cahones get caught in the ringer, there is no way out for them other than via a murderous short squeeze. Thursday's nasty little ripper was more than I'd expected, since the futures ultimately exceeded my minimum rally target at 2050.75 by eight points. It took a truly murderous squeeze to get there, though, since the futures plunged to 2019.25 on the opening after reaching 2047 in off-hours trading overnight. So where to now?  My hunch is that things will be relatively quiet on Friday, mainly because short-covering bears were likely depleted, if not to say deservedly dead, at the final bell yesterday. Notice as well that the high in the final minutes came within two points of fulfilling the 2061 target shown. Since we should always be prepared for the unexpected, however, let me offer 2096.00 as a rally target if the criminals who rig this game decide its feasible to end the week with yet another short squeeze. The futures could pull back to as low as 2033.00 first, however, before the heist got under way.

Wednesday's constipated price action demonstrated what happens when DaBoyz are intent on pushing the futures higher even when bullish buying interest is nil. Most of the day's flatulence effected a churn near the 2024.25 midpoint pivot shown.  However, the direction was up, even if feebly, and so DaBoyz were at least successful in keeping short-covering bears on the ropes. This dynamic is very nearly irreversible once begun, and so we should regard a further rally to the 2050.75 target as all but certain. Positioning ahead of the move is another matter, however, and I'll leave it to you to craft an elegant solution in real time from whatever messy smorgasbord of possibilities arises. _______ UPDATE (9:28 a.m.):  DaSleazeballs used up quite a bit of short-covering anxiety goosing this vehicle to  2047.00 an hour before the opening. Bears remained on the ropes before the bell, though, as stupid and anxious as ever,  so the 2050.75 target still obtains as a minimum objective.

The futures failed on Friday to achieve an 'easy' correction target at 1956.75, implying DaBoyz have enough 'juice' to squeeze stocks higher Monday morning. We've seen bull trap openings in each of the last five sessions, but this one seems likely to consolidate any buoyancy in the first hour for a presumptive second leg up. Even so, there seems to be precious little energy to for a sustained rally get, and so we shouldn't expect much.  The closest Hidden Pivot benchmark is the 2033.25 midpoint Hidden Pivot shown, and that can serve as a minimum upside projection for the near term. It would take a close above it, however, to imply a follow-through to its sibling 'D' target at 2096.00, By then, the 2105.00 target we've been using for weeks will be in play, and with it a good reason to consider shorting aggressively there with a tight stop-loss.

As we've come to expect, the futures sank like a brick after the usual bull-trap opening. It's inconceivable that any buyers other than short-covering bears would be stupid enough to fall for this trap the fifth straight day it has occurred. They constitute enough buying power, however, to set up the obligatory selloff once DaBoyz have distributed shares in the first hour or so. Shortly before midnight Thursday, the carny game pointed to a tradable low at exactly 1956.75, the Hidden Pivot support shown. Your move!

The last three days have seen bull-trap highs occur on or before the opening bell. Do we detect morons at play here?  Actually, it's probably just the same old dirtballs, marking time until they can get a more potent short-squeeze going. It's hard to say why they've been having such difficulty with this, since squeezing gratuitous rallies from brain-dead bears has been their modus operandi for nearly six years.  From our perspective, a still-outstanding Hidden Pivot target at 2105.00 is the number to beat -- or at least achieve.  In the meantime, day-trading this vehicle will be akin to sitting in on a poker game where you know all the other players are cheats and thieves.  We can beat them anyway, but it's probably not worth the effort.