E-Mini S&P

During yesterday's impromptu session, I suggested shorting this vehicle at day's end, but only to those who were prepared to monitor the position overnight. The 2055.25 target was effectively reached with an intraday high at 2054.00. For all we know, this could be the ultimate top of the bull market begun in March 2009. It's equally possible, of course, that the futures could be bounding blithely higher by the time you read this.  Were that to occur, I'd have to infer that the 2115.50 target shown is in play, implying yet another thousand points of upside for the Dow Industrials.  This seems incredible to me, given that corporate earnings have begun to falter. Permabulls have been arguing for years that per-share earnings growth has justified the runaway bull, even if a significant piece of this growth has been bought by companies shrinking their floats via stock buybacks. In any case, and most immediately, if the moderate weakness in evidence Monday night starts to snowball, we'll look for a way to get short Tuesday on-the-fly. Stay tuned to the chat room if you're interested. _______ UPDATE (11:04 a.m.): Since I have reports from traders who got short yesterday, I am advising covering half of the position at current  levels,  tying what remains to a 2049.75 stop-loss. For purposes of tracking guidance, I will assume a short position of two contracts with a profit-adjusted cost basis of 2068.00. _______ UPDATE (9:06 p.m.): Based on my instructions, traders should have exited on the spike to 2050.50 that occurred with two hours left in the session. The theoretical profit on the position would have been around $1750.  If you stayed short, an 'impulsive' stop-loss for today would imply bailing out only if the futures surpass Tuesday's record-high 2054.00.

A modest, 2055.25 target that was put in play two weeks ago remains viable, even if progress toward it has mimicked that of a turtle trying to reach the other side of a two-lane highway. I won't proffer any trading strategies for Monday night, since the futures have been oh-so-coy in courting the various 'levels' associated with the target. Sunday night they came down to the precise 2025.25 midpoint pivot before embarking on a feeble, 15-point rally that moved too slowly to be tradable.  One of these nights the futures will simply pop to 2055.25, and that will be that. Trading opportunities from both the long and short side are implied, but I'll leave it to those of you with more patience than I to seize the moment.

One step up, two steps back. At that rate, the 2055.25 rally target will never be reached. Actually, yesterday's gratuitous swoon did not alter the target or its viability, even if it may have reduced the odds of getting there by an infinitesimally small amount. To believe otherwise is to imply that the bull market begun in March 2009 is over. Maybe, but we're not betting on it. The futures are in fact a bull trade from these levels, since there's 22 points of implied upside profit potential -- worth as much as $1100 per contract -- to any trader nimble enough to a catch a ride. As usual, getting aboard will be easier at night than during the regular session, when this vehicle tends to be overtraded to death. To initiate the trade I'll suggest bidding a tick above the 2029.75 midpoint support shown, stop 2029.00. That's the lazy way to do it, but if you want to shave another tick or two of theoretical risk from this gambit, or if you plan on doing some size, you could try a 'camouflage' entry on a chart of lesser degree.  If you have a bit of Hidden Pivot knowledge but are uncertain about how to do this, check the chart that accompanies yesterday's Gold tout in the archive.

The futures obviously have our longstanding rally target at 2037.50 on their tiny, evil brain, since they’ve been diddling this Hidden Pivot resistance for nearly a week. The S&Ps could plunge at any moment, of course, tired of the game. But the tedious price action feels more like accumulation to me, and so I’ll stick with the 2055.25 target shown.  It looks too, too pretty not to work -- meaning, in theory, that: 1) it WILL be reached (if you’re keen on getting long, don't be afraid); and 2) it looks very likely to produce a precisely short-able top. Take a free trial subscription that will allow you to access not only the touts, bulletins, updates and impromptu trading webinars during market hours, but a 24/7 chat room that draws veteran traders from around the world.

The 2055.25 target flagged here earlier is looking more and more compelling, notwithstanding the fact that it is of lesser degree than the one at 2037.50 that the futures have been diddling for the last two days. That implies a 25-point ride from here -- one that beckons night owls who have time on their hands and a little guts. The little ABC pattern at the rightmost edge of this chart is the one you should use to get aboard, since it has already tripped an entry signal at  2033.00 that projects to 2039.75. The stall at p=2035.25 is a concern, but if DaSleazeballs are DaSleazeballs I think they are, They are going to run this sucker up in the wee hours.  The small pattern won't make you rich if you catch a ride, but that's not the point of it; the payoff is in the potential finishing stroke to 2055. _______ UPDATE (12:29 a.m. EST): The trade worked perfectly, the futures having pushed up to 2039.00, three ticks from the target. If you got long, use a break-even stop and go for extra bases -- i.e., 2055.25 -- with what remains. _______ UPDATE (8:39 a.m.): The futures went nowhere overnight, presumably stymied by the 2037.50 pivot. Yesterday's incredibly sluggish action could have been attributed to the Monday factor. But two days in a row?  That's creepy. The most logical explanation I can think of is that every trader on earth was long straddles, or something like straddles, over the weekend.  The "unwind" would of course imply a state of coma for volatility, at least until each and every buyer of every put/call has had the marrow sucked from his bones. Owning straddles is like paying life insurance companies extra for an over/under bet on when you'll die. _______ UPDATE

Friday's unexceptional payroll news sent the futures into a weak rally that fell four points shy of the 2037.50 target we've been using. It's still valid, but you should short there only with caution, since, if 2037.50 is exceeded, the 2055.00 target of a lesser pattern would be in play.  Night owls should look for entry opportunities on the five-minute chart. Shortly before midnight Sunday, the best one I could identify implied bottom-fishing at 2018.50, a Hidden Pivot support that will obtain unless 2030.75 is exceeded to the upside first. This is shown in the accompanying chart.

The 2037.50 rally target we've been using comes from the long-term charts, but the 'hourly' provides an alternative at 2055.25 that would become an odds-on bet if the lower number is exceeded by more than a few ticks.  Both numbers should evince tradable stopping power, but you should attempt to exploit this opportunity only if you've made a few bucks on the way up.  Should you find yourself in this enviable position, don't hesitate to take a small short position home over the weekend. The mere fact of Friday rallies being too, too scary to short is reason enough to try it anyway, at least in a small way.

The 2037.50 target displayed here earlier is persuasive -- not only for purposes of getting long for an implied 20-point ride worth as much as $1000 per contract, but for reversing the position and going short at the target. My hunch is that buying one's way aboard will be nerve-racking in any event, since the rally that began Wednesday's session used up the one fetching prior peak we might have used to craft a usable, minor ABC entry pattern.  My suggestion for getting long nonetheless is to wait for a pullback like the one shown.  At that point, bulls will be mildly discouraged, and even we would be looking to get short. Instead, and as long as there's a low at least a tick above A=1195.25, you should buy-stop your way aboard if the rally from that low goes at least 6.50 points. Be sure to take profits on half the position if the rally continues for another 6.50 points. After that, you can swing for the fences.

Yesterday's traipsing around generated a bearish impulse leg on the hourly chart, but if the futures move lower to complete the pattern Tuesday night, look for signs of support at p=1999.50; or if not there, at 1990.25. The lower Hidden Pivot looks appealing for bottom-fishing -- a gambit which would require a stop-loss of at least three ticks.  As always, an easy move through either support would imply still lower prices ahead.