E-Mini S&P

Late Sunday night, it's anyone's guess whether DaBoyz are fixing to run stops above the 1867.50 peak shown. That's assuming there's enough short-covering fear to pull it off, which appears not to be the case at the moment. Far more ambitious would be a push above the April 4 peak at 1892.50 to new all-time highs.  Assuming that's about to happen, it's highly doubtful it will be by way of an impulse leg that exceeds both of the peaks in a single, unpaused leap.  More likely is a push today above peak #1 that would probably spell death-by-Chinese-water-torture for shorts in the days ahead. In any event, your trading bias should be bullish above 1867.50, with entry based on whatever uptrending ABC 'camouflage' patterns you can find on charts of 15-minute degree or less. Keep in mind that the first such opportunity signaled, as opposed to one further along in the uptrend, would be the least risky to trade.

The bearish impulse leg that bottomed on Monday at 1803.25 was a strong one (see inset), having exceeded no fewer than three prior lows, two of them 'external', on the daily chart.  A retracement is overdue, and I would be very surprised if the futures were to first rally above Thursday's 1867.50 high.  Whatever happens, we should pay very close attention to sellers' next encounter with a midpoint-pivot support on this chart, since its serious breach would suggest that the long-term bull market is either waning or over. Assuming Wednesday's 1857.00 peak endures as a short-term top, buying at the implied midpoint pivot at 1824.25 would become a very enticing speculation.  Please note as well that an 1840.75 print (i.e., the green line)  would trip a short to at least 1824.25.

It was just coincidence that yesterday's edition of Rick's Picks led with a headline about schizophrenia, since a market-watcher could not have asked for a better demonstration of it.  At the opening, the futures head-faked the equivalent of 100 DJIA points; then they plummeted the equivalent of 250. Just when things looked darkest, short-covering by bears too stupid and frightened to know when to sit tight drove the futures into a spasm that recouped earlier losses and then some. By day's end the futures were up 18 points, bears were cowering, Wall Street was jubilant and all was right with the world. I won't hazard a guess as to where this freak show will head tomorrow, but I should warn bulls nonetheless that the night session is unlikely to deliver much more upside than the 1845.50 target shown.  Above it, perhaps after Wednesday's opening bell, an 1851.75 target will be in play. However, if you plan on intercepting it with a short offer, you had best do so only if you've caughta piece of the rally.

Yesterday's price action was the stock market's equivalent to rectal itch, about which no one but a proctologist at a medical meeting should have much to say. It provided no clues about whether the next big move will be higher or lower; it was best traded by betting against the continuation of any trend that looked like it was about to become even remotely interesting; and it pointed to no particular outcome on Tuesday. That said, I have reproduced a daily chart to remind you that the bear leg begun last Thursday is strongly impulsive. Bulls could dispense with the threat thereof by rallying this vehicle to new record highs, which would exceed the requisite two prior peaks on the daily chart. Failing that, however, they will need to make their stand at the midpoint pivot of whatever follow-through c-d decline is about to occur. I have sketched this out, since price action at the still undetermined 'p' will be crucial to our understanding of the much bigger picture. _______ UPDATE (11:04 a.m. ET): Assuming today's 1837.25 high holds, the chart accompanying this tout projects minimum downside to p=1805.00, or a worst-case low over the near term at D=1773.00. This morning's 'obligatory head fake' was not exactly unexpected.

The bottom of Friday's slide came within 1.50 points of the 1805.75 target I'd supplied. A 10-point rally ensued, and although one could have gotten aboard using the larger of the two patterns shown, the subtler one labeled in purple would have nipped you for small change first. The action has since turned characteristically pointless, and, true to its new, robotized, lobotomized personality, ES is not giving away any berries Sunday night by way of attractive 'camo' patterns. Rather than suggest that night owls look for camouflage that even I can no longer find in this vehicle, I'd suggest initiating trades 'old-style' by going against the trend at D targets of not-too-obvious patterns.  One such target is 1789.25, which can be found on the 60-minute chart using the following coordinates: A=1866.50 (4/10 at 10:00 a.m.); B=1823.75 (4/19 at 4:00 p.m.); and C=1832.00 (4/11 at 4:00 a.m.). _______ UPDATE (10:42 a.m. ET): This mirage went no lower than 1803.25 overnight, denying us an opportunity to bottom-fish my target. The rally since is impulsive on the hourly chart, based on these coordinates: a=1811.25 at 7:45; b=1824.75 at 9:45; and c=1818.50 at 10:15.

Now wasn't that refreshing! I put out an 1805.75 target intraday, implying a further decline in the Dow of at least 200 points awaits.  I suspect this target will be achieved in one fell swoop on the opening bar, but that shouldn't preclude getting short ahead of the move. In fact, apparent short-covering has lifted this erstwhile cinder block three points in after-hours trading, implying that there are yet a few bears out there who can't get used to the idea of letting their profits run. Their understandable yellow streak could be our gain, however, since it has presented an opportunity for night owls to get short on...well, if not strength, than on an hour or two's worth of delicately manipulated buoyancy.  If you are fortunate enough to be short when the target is reached, I'd suggesting reversing the position and going long, using a a portion of your gains to cushion a generous stop-loss. If you are simply bottom-fishing to open a position, however, you should use the 'camouflage' technique, since the target may be too well-advertised already to favor a stress-free entry.

If you can spot a logical place for a major top in the sociopathic price action of the last six weeks, you may be hallucinating.  The futures are near the middle of their range for that period, seemingly hell-bent on going at least somewhat higher before something more interesting happens.  Night owls seeking easy opportunity should look for it on the 3-minute chart, which yields an 1871.75 target and a midpoint pivot at 1865.75 as a possible range for nocturnal activity. (A=1852.00 at 2:00 p.m. ET; B=18764.00 at 2:33 p.m.; and C=1859.75 at 3:00 p.m.)

There was nothing impressive about the wheezy, short-squeezy spasms that produced yesterday's very modest gain. The biggest rally of the day was accomplished by running stops placed beneath Monday's low. With few bulls still on board at that point, it required little volume to goose the futures into a 17-point waft. This little game was being repeated in after-hours trading Tuesday night. Notice in the chart (see inset) how the low of the rally was a single tick beneath a low made three hours earlier.  Again, this shook out the bulls, lightening the load for the rally that has ensued. But as of around 8:30 p.m., DaBoyz had extracted a gain of just 6 points for their troubles, casting sufficient doubt on the veracity of the rally to shorten its life span.  Night owls should pass up a second chance to short this dud at 'p', but if DaBoyz wax bold and push this hoax to the 1857.25 target, you can short there with a stop-loss as tight as 1.00 point. _______ UPDATE (10:03 a.m. ET):  A new B-C has shifted the target north to 1859.25.   It feels doubtful that DaBoyz can muster the wattage to reach 1859.75, so any shorting should be down with-the-trend. I'd further suggest zooming down to the 5-minute in search of  'camouflage' opportunities.

The night shift, which attracts some of the most talented dirtballs in the trading world, is having trouble walking the futures higher Monday night. So far, a 4.00-point mark-up is all they've been able to extort from widows, orphans and pensioners who evidently still don't know that the broad averages have gotten pounded for two straight days. More seriously, in fact, it is short-covering that is providing the lift right now, and if bears don't know enough to stay cool and back off, they deserve to get buried by the next avalanche.  This is all speculative on my part, mind you, but notice how little selling it would take to generate a robustly bearish impulse leg on the daily chart (see inset).  Price action could therefore turn very erratic between now and Tuesday's opening bell, but please note: This is when you can flourish if you apply the simple rules of 'camouflage' in looking for tradable impulse legs amidst the flux of fear and hysteria.  Accordingly, I'll suggest monitoring the hourly chart and trading on the 3-minute, if and when any of the key lows that I've flagged is breached. _______ UPDATE (12:07 p.m. ET): DaBoyz have popped the futures for a so-far 16-point short squeeze off a deftly engineered, spike low.  The result is a robustly bullish impulse leg on the hourly chart that could yield a trade from the long side (A=1830.75; B=not yet formed).