E-Mini S&P

Finally, the breakout we've been waiting for!  I  provided some big-picture targets as high as 1970.50 for this rally in yesterday's tout, but for trading purposes you should focus on the more immediate one at 1917.25 shown in the chart. The implied 24 points of upside from current levels leaves room for night owls to make a modest score, but I suspect that easy entry opportunities will diminish and perhaps vanish by Tuesday's opening bell.  If you have the good fortune to catch a ride to the target, consider reversing the position and using some of the implied profits to cushion the stop-loss of a short initiated there. _______ UPDATE (May 13, 6:49 p.m.): This is one of the most half-baked breakouts into record territory that I can recall, despite the fact that the news media have been duly trumpeting the event, such as it is. Our minimum upside target for the very near-term remains 1917.25, and at the rate bulls are going it could take a week for this vehicle to cover the requisite 19 points to the target. Keep in mind that there is zero bullish buying at this point, only short-covering and the inexorable flow of OPM thrown at stocks by mostly-clueless money managers who couldn't hold down a CETA job if they were forced to live by their wits.

Three weeks of relentless head-butting have failed to punch past the midpoint pivot resistance at 1887.00 shown in the chart.  My gut feeling is that bulls will eventually succeed -- with crucial help, as always, from  panicky short-covering. In the meantime, however, the futures may have to go lower first to get the running room they need to accomplish this modest feat. Whatever the case, a two-day close above the pivot would signal their readiness, and traders should regard such an occurrence as a low-risk buying opportunity.  Upside potential would be to 1970.50, the 'D' target shown.  That would equate to a Dow rally of about 800 points from current levels -- still a tad shy of the 17622 bull-market target we've been using for quite a while.

Although my long-term forecast calls for a rally to new record highs, the ponderous toppiness we've seen lately suggests the futures may have to fall at least somewhat lower before they can move significantly higher.  That would give them the running start they need to blast free of supply that has been accumulating since early March. In the accompanying chart, notice that the bull market has stalled almost precisely at 1887.00, a 'midpoint Hidden Pivot'  indicated by the red line. Although it would require a crystal ball to know whether the S&Ps will eventually break through it, should that happen it would strongly support the case for a continuation to -- precisely  -- 1970.50, the next major Hidden Pivot above. Meanwhile, there can be no assurances that the correction-then-a-running-start scenario will play out to the satisfaction of Wall Street.  Indeed, with the real estate sector relapsing, possibly fatally, and Fed stimulus barely able to sustain even marginal GDP growth, it seems most improbable that significant new highs await.  Regardless, any fall from these levels will gain increasing authority, if not to say ominousness, with each prior low it exceeds on the daily chart. Two such lows would be breached on a mere 18-point decline to 1843.75.  Two others, both more significant, would have to give way before we could know almost for certain that the bull begun 62 months ago is over.

It's late Sunday night, and the futures have traded a single tick beneath Friday's low, generating a bearish impulse leg on the hourly chart.  The  breach is subtle enough that it could conceivable lend itself to a 'camouflage' shorting opportunity.  I've sketched  out what this might look like for your guidance.  If this gambit triggers, it will almost certainly happen when most traders are sleeping.

Zzzzzzzzzzzz. Sometimes after a quick rally-and-retracement the follow-up leg takes so long to reach its Hidden Pivot target that we forget it's there. Make no mistake, however:  The 1884.75 target shown is what the futures appear to have struggled all week to achieve (or perhaps exactly 1894.00, an alternative target). Yesterday's gratuitous swings brought the June contract inches closer to this very modest goal, presumably so that the week can end with enough excitement to put a spring in our step and a song in our heart as the weekend begins. Note that despite the surly pointlessness of yesterday's price swings, the futures managed to exceed a bullish threshold I'd mentioned earlier at 1882.50 by a single tick. That made the four-hour slog that followed ostensibly corrective and therefore, at least in theory, a buying opportunity. However, because four such opportunities died trying to get off the launching pad yesterday, I'm not going to pretend there might be something interesting for you to do today. Instead, we'll let the press tell yesterday's story in their inimitable way, avoiding as always the inference that the stock market 90% of the time is a dead zone, as bereft of meaningful activity as a tumbleweed farm. _______ UPDATE (10:52 a.m.): On the hourly, a major target at 1970.50 is coming into focus. (A= 1725.25 on 2/5/14). This pattern has a midpoint resistance at 1287.00, which is where ES appears to be stalled.

Yesterday's rally seemed to run out of gas.  On the other hand, the fact that there was any rally at all was impressive, considering the economic headline of the day was that GDP grew by a paltry 0.1% in Q1.  Actually, the rally was even more impressive, since everyone knew that the 0.1% economic growth claimed was a statistical lie. So, are the S&Ps about to vault to new record highs?  This seems unavoidable, since it would require but a 14-point thrust above yesterday's peak. Rather than speculate, however, we should simply wait and see whether the futures can surmount a lesser peak at 1882.50 that was recorded last Thursday. Traders should be prepared for a quick, shallow pullback from just above it, since that could provide a low-risk opportunity to get aboard via 'camouflage'.  Hidden Pivot webinar grads interested in seeing exactly how this can be done should check out the recording of the weekly tutorial session held yesterday, since it includes a real-time trade in Priceline that had everything we look for, technically speaking.

Inches from the 1842.25 correction target shown, the selling was very nearly maxed out at yesterday's lows (see inset), technically speaking. The actual turn came from 1844.00, exactly 1.75 points above the bottom we might have projected, and although this might have been mildly expected, what surprised was the hysterical short-covering that drove the rally. Had this panic not occurred, the unthinkable would have resulted -- i.e, a third consecutive down day on Wall Street.  It was not to be, however, and now the only that remains is whether this will be the rally that propels the S&Ps to new record highs, or merely yet another failed tease. In the meantime, gratuitous 80-point swings such as we have seen in recent months will most surely be tradable.

I had to play with the time frames to get a chart that displayed a pattern I somewhat like.  The one shown will do, although you should allow for the possibility that a higher point 'C' will be created before this vehicle embarks on second leg down. If so, assuming the p midpoint support is not closely coincident with any of the 'external' lows made during the recent rise, it could afford an excellent opportunity to bottom-fish with a tight stop-loss.  Don't hesitate to ask about this in the chat room, since the trading opportunity in prospect could prove suitable even for relative novices. ______ UPDATE (10:36 a.m. ET): In the chat room this morning, I flagged a Hidden Pivot at 1856.50 as an enticing spot to try bottom-fishing. Alas, the bounce we were expecting came from 2 points above it.  At the moment, the futures have racked up 13 points since bottoming.

The leaps have been opportunistic, powered by short-covering whenever the mood is right. Most of the time these days, however, the futures are taking mincing steps in both directions, creating a challenging environment for profit-seekers in the middle hours of the day. One thing to notice, however, is that the rallies, particularly in this vehicle, and whether weak or powerful, seldom proceed from the first signaled entry point.  Instead, the 'money trades' launch from a second or third point-C lows of ABCD patterns, and they do it with such repetitious reliability that one can practically discard the first signaled entry opportunities routinely. This is the kind of price action we might expect when 'everyone' thinks that stocks will move higher on a given day. 'Everyone' can be right, but that doesn't necessarily mean they can make money easily. For your interest today, I am including a chart that shows a modest rally target at 1895.00. I'm guessing it will be easier to get short there with a tight stop than to get long for the ride to it. However, because the futures will be in record territory at that point, we shouldn't want to impede their progress too aggressively. _______ UPDATE (April 24, 12:50 a.m.):  With yesterday's rally -- nearly all of it achieved in a single, short-squeeze bar toward the end of the session -- bears are now trapped between the all-time high and a lesser peak just below it. Their acute, growing discomfort will likely be tradable, but not by way of any specific guidance I am able to provide nine hours before the opening bell.  New record highs are coming, but for most traders, the process of getting there promises to be more pain than pleasure.