E-Mini S&P

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.

Bears shouldn't get their hopes too high just because stocks gave up most of their gains yesterday. Three steps up, two steps back, is sufficient to keep shorts on the ropes, and that's all that is needed to keep the stock market moving relentlessly higher. From a technical standpoint, the 2115.50 bull market target we've been using for quite a while still obtains. That said the visual weight of this week's downtrend offers modest encouragement that a correction worthy of the name may have begun. We shall see.  The daily chart is impulsively bearish at the moment,  and there was room on the lesser charts at Thursday's close for at least a little more downside. My immediate projection calls for a tradable low at 2019.75 (see inset), but it will probably be available only to night owls for purposes of bottom-fishing. If that Hidden Pivot support gives way easily, however, it would imply more selling down to the next, at 2004.00. _______ UPDATE (9:14 a.m.): The futures broke the 2019.75 support without effort, suggesting they will head lower today, to the 2004.00 target flagged above.  Bulls would gain at least a temporary respite and have a good chance of reversing the damage  with a print exceeding 2031.75.

The 2018.25 target is not lacking in clarity, and I expect it to be reached Thursday night or earlu Friday morning. The shorting opportunity would necessarily come first, but there's also a the prospect of bottom-fishing when the target is reached. I'll make the short trade catch-as-catch-can, although my gut feeling is that the futures will not do much faking out before they descend to the target. For the expected reversal, place your bid at 2018.50, stop 2017.50.  You'll be on your own if it fills, but if the trade goes in-the-black be sure to take a partial profit at 2021.50, or to implement an 'impulsive' stop-loss there if you hold just a single contract.  _______ UPDATE (10:26 a.m.): Concerning this morning's Whoopee Cushion short-squeeze, although the 2018.25 target is still valid theoretically because C=2060.75 has not been exceeded, the target has little practical value (other than that its having informed us, but not having been reached overnight, that conditions had turned mildly bullish.) That said, the rally has yet to exceed any 'external' peaks, so technically speaking it is not yet even impulsive on the hourly chart. This bull market's lack of significant corrections is at such an extreme that you could describe it as freakish, historically speaking. It routinely spits on Hindenburg Omens, as you will have noticed by now. Today is a good reminder of why we should take at least a partial profit on any put position that shows a small gain -- and not distract ourselves by patting ourselves on the back in those rare instances when a short has "come home."

Night owls can try bottom-fishing at the 2053.00 midpoint support, but I'll suggest bringing the bid down by two ticks, to 2052.50, for a more conservative play. This Hidden Pivot looks likely to be hit overnight, but regardless, if it gives way easily you should assume more weakness to at least 2042.75 impends. _______ UPDATE (10:33 a.m. EST): The futures signaled more weakness overnight when they breached the 1253.00 midpoint support by 3.50 points. The downtrend took a small bounce off 2042.75 before heading still lower, to a low-of-the day current price of 2034.25._______ UPDATE (7:42 p.m.): A stall at the 2059.50 midpoint pivot shown has validated the pattern itself, implying that any progress above it could be expected to reach a minimum 2068.00. As always, an easy move through a pivot would imply that the trend is likely to continue. _________ UPDATE (3:03 p..m.):  Ahhh, that rarest of delights! The stock market is falling for a third straight day -- getting its ass kicked at the moment, with the Dow down 280 points. My target is 17,447, implying about 75 more points of slippage over the near-term. Equivalent target for the E-Mini S&P is 2018.25.

Just eight points of upside remain until the futures hit something solid -- i.e., the 2084.75 target shown. The excitement could be over by the time you read this, but night owls should seize the opportunity if the futures open unchanged to slightly higher Sunday evening.  If not and there's a pullback to the 2073.00 midpoint pivot, that too can be used to get aboard -- either with a tight stop-loss for a multilot position, or one at 2070.00 if you fancy a 'mechanical' entry on a single contract.

The 2084.75 rally target shown was flagged during yesterday morning's 'impromptu'  webinar, but it came with a cautionary note about jumping aboard prematurely in expectation of a quick follow-through. This turned out to be good advice, since Mr Market spent the rest of the day screwing the pooch, presumably while awaiting better conditions to foment yet another short squeeze.  The target remains valid, and it looks like it could be shorted with a stop-loss as tight as 2-3 ticks.  However, I'd recommend doing so aggressively only if you've caught the ride higher, since any profits thereof could be used to widen the stop-loss when you reverse the position. Night owls will fare best if the rally resumes in the wee hours, but in any case, traders should look for a shallow pullback from just above peak #2 (2074.50) to initiate. I've sketched out a small ABC pattern to guide you. _______ UPDATE (8:43 a.m.):  The pattern I drew played out in actuality to yield a 2073.25 buy signal and a ride to D=2076.25. The futures subsequently 'went mental' on news that 321,000 new McJobs allegedly were created last month, but any subscribers who were long ahead of this would not likely have stayed aboard for the roller-coaster ride that ensued.

The long-term chart shown is intended as a reminder that this vehicle still has some running room before it encounters an impediment with the potential to stop the rampaging bull, even if only briefly. The 2115.50 Hidden Pivot target can be shorted aggressively using the 'camouflage' technqiue or very a tight stop-loss, but for the time being it should serve as a lodestone for bullish bets.  The expected rally would be equivalent to about 350 Dow points,  implying the Indoos are about to crack 18,000. The popular imagination will surely shift toward Dow 20,000 in a big way at that point, which is all the more reason why we shouldn't regard such an outcome as a done deal.