E-Mini S&P

The 1948.25 rally target proffered here Friday marked the intraday high until the final minutes of the day.  It is now shortly after midnight Monday, and although the futures have opened higher, extending their latest move into record territory, the new high is merely marginal.  The so-far top is 1950.00, but that's probably enough of an overshoot for us to infer that an alternative target at 1954.25 also given Friday is in play.  Because this would closely coincide with a potentially important DIA target (see tout for the exact number), a tightly stopped short is recommended in either vehicle at its respective target. If this vehicle should push past 1954.25 by as little as 2.00 points, however, I'd infer that the third and last of the targets disseminated on Friday, 1970.50 (see inset), is likely to be achieved.  If you're long when it gets there, use some of the profits thereof to cushion a generous stop-loss.  (Note: The equivalent target for the September contract is 1960.50.)

A potentially important top just above?  Yeah, I know you've heard it before -- from a hundred gurus, relentlessly. But it sure looks like one. I should have noticed it earlier, but as is so often the case, the epiphany came while I was conducting a tutorial session for some recent graduates of my trading course.  Actually, we discovered two 'Hidden Pivot' resistances, six points apart, that, acting in concert, could show some hairy-knuckled stopping power.  Okay, the rally target at 1930.25 that I drum-rolled here yesterday got blown to smithereens by a short-squeeze imbued with headless-chicken power by panic and confusion over Draghi's announced plan to deal with Europe's little deflation problem. These new targets are more compelling than the one at 1930.25, but I am not about to jinx them by billboarding them in a freebie tout that goes out each night to nearly 9,000 subscribers. However, I will divulge their location to anyone who visits the Rick's Picks 'Banter Room' after 9:00 ET Friday morning. You can get a free pass to the room, and a free two-week trial to my service, by clicking here. No credit card necessary! When you get to the home page after signing up, just click on the 'Chat' tab up top, and then click 'Banter' toward the top of the page that comes up. Stick around if you'd like to join a virtual koffee clatch with the friendly, always-helpful bunch in the other room, Rick's Saloon and Betting Parlor.  Hope to see you in the A.M.!

A 1930.75 rally target broached here earlier remains viable, implying that day traders should position from the long side for now. I don't mean to imply a set-it-and-forget-it trade, since the uptrend that presumably will get this vehicle to the target has been an agony of feints and swoons thus far. If you have the good fortune to catch the move, I would suggest using some of your profits to cushion a tight stop-loss on a short initiated at the target.

This little troublemaker spent yesterday mixing bobble-head jitters with Wall Street Kabuki, all mere inches shy of new record highs. Such behavior would only have compounded the consternation and frustration of traders who have been desperately looking for opportunity -- any opportunity -- to grab hold of.  Traders who see themselves getting short at the stop can save their breath, however, since success could conceivably require the canny speculator to endure, for example, the most murderous Friday-afternoon short-squeeze ever, only to see stocks around the world take their initial plunge into well-deserved hell Sunday night. Since it's only Tuesday, however, I'm perforce obliged to offer a game plan that aspires to engage and occupy the restless among you until the beast comes to rest ahead of its Moloch sabbath. I'll therefore suggest hitching your wagon to the gnarly bullish pattern shown. It promises a rally to 1930.75, provided buyers turn giddy over some otherwise meaningless tidbit of news churned out by the Ministry of Spin. Not to say it can't happen, but nothing in the chart suggests to me that this trading vehicle is fixing to dive. That will come later in the week if at all. For now, though, and as always, it will be caveat emptor.  _______ UPDATE (9:04 a.m. ET): This vehicle 'overcorrected' overnight, exceeding the 1918.00 'D' target (60-min) of a=1923.50 (5:15 p.m.)  Now it is potentially shortable via the developing pattern a=1920.50 (7:00 a.m.); b= 1916.00 (9 a.m.); c=still undetermined.  Should it pan out with an entry signal, the short will be somewhat less enticing if it occurs within 10 minutes of the opening bell. Click here for a free two-week trial to Rick's Picks -- no credit card necessary.

The futures overshot a compelling Hidden Pivot rally target on Friday, but I'm going to allow for the possibility that an alternative target worked precisely and could mark an important top. Both targets are shown in the chart, and although the higher of them, D2=1923.25, is not one that I would typically take seriously because it is derived from a 'too-obvious' low at 1803.25, I'm inclined to give the pattern the benefit of the doubt nonetheless because of the nasty reversal in momentum stocks late in the session.  If D2 is exceeded by more than perhaps 2-3 points, however, a Hidden Pivot rally target at 1954.25 will be in play. Although I had suggested here earlier that the high-fliers, particularly AAPL, might pull the stock market higher, we'll have to wait and see whether the opposite holds true -- i.e, that either the world-beater stocks pull the broad averages down; or that the broad averages pull the world-beater stocks up.  Interesting times, in any event. _______ UPDATE (10:06 a.m. ET):  Bulls have gotten sucker-punched by DaBoyz yet again as the futures fall hard from a marginally positive opening. The actual peak was at 1924.25 -- not far enough above the 1923.25 pivot to 'actualize' the bullish scenario discussed above.

The potentially very important rally target that I alluded to in 'Today's Action' is shown in the accompanying chart. Like so many other interesting charts that come to my attention, this one surfaced serendipitously last night in response to a question asked during the final hour of the Hidden Pivot Webinar.  Notice that the intraday high at 1918.00 occurred just three ticks above the target, a Hidden Pivot at 1917.25 that had been six weeks in coming. In retrospect, and even with Apple on a holy tear, the target was speculatively shortable in small size. This is notwithstanding the fact that I almost never advise taking a position in the final hour.  Looking at this chart with mechanical detachment, I'd say that if the futures rally just three or four points above the target, it is kaput.  The pattern is so pretty and precise that it should work with that kind of precision. However, an overshoot wouldn't mean the Hidden Pivot has not 'worked' -- only that the rally is sufficiently powerful to turn even the hardiest of Hidden Pivot resistances into chop suey.

The latest E-Mini tout could have been worth as much as $1200 per contract to anyone who was paying attention and prepared to act. Specifically, with the futures trading around 1898.00 Monday evening, I suggested getting long for a rally to exactly 1913.50. I further recommended getting short at that target, a Hidden Pivot resistance, using an ultratight, three-tick (!) stop-loss at 1914.25. In the actual event, the futures rallied to an intraday peak at precisely 1914.00 yesterday morning, then dove to 1905.00 in the first hour. Here’s the actionable portion of the recommendation exactly as it appeared: ‘Traders should use the 1913.50 target shown as a lodestone on Monday. The opportunity to get long ahead of the move may pass with Sunday night's session, but you can try shorting there in any case with an initial stop-loss at 1914.25.’ If you think you could have handled those instructions, consider giving Rick’s Picks a try. You can sign up for a free two-week trial – no credit card necessary – by clicking here. Incidentally, the 1913.50 rally target was a month in coming, so I don’t expect it to be a pushover. My guess is that it will take at least 4-6 days for short-covering – the only source of buying power left in this grotesquely overextended bull market -- to chew through it. However, if the resistance were to give way in a mere 2-3 days – say, by no later than Friday – bears should dive for cover, since the easy move into record territory would suggest buyers revving up to cripple and maim shorts.

Traders should use the 1913.50 target shown as a lodestone on Monday.  The opportunity to get long ahead of the move may pass with Sunday night's session, but you can try shorting there in any case with an initial stop-loss at 1914.25. If the futures take out the stop, look for further, albeit limited, progress to the 1917.25 target of the larger, alternative pattern shown. _______ UPDATE (10:36 a.m. ET): This trade worked beautifully, since the futures peaked at 1914.00 just before dawn. I suggested covering half of the position in the chat room with the futures down near 1906.00. However, if you shorted only a single contract, or have already taken a partial profit, implement an impulse-leg-based stop-loss on the 5-minute chart. At the moment, that would imply stopping yourself out on an uncorrected thrust that exceeds two prior peaks, including one at 1911.50 recorded at 9:55 a.m.  If I hear from two people in the chat room who got short and who are still short, I'll establish a tracking position.

All signs were pointing higher at the close, which means there's probably about a 65% chance that stocks will head lower on Friday. That's the way things have played out on most days in recent weeks: The more bullish stocks looked at the end of a session, the worse they tended to open the next day. Factor in the undesirability of taking positions ahead of a long holiday weekend, and you're probably better off flipping a coin or casting the I Ching than trying to guess what the charts portend.  This won't necessarily preclude nimble day trading, but don't expect to surf a big wave.