E-Mini S&P

Someone just queried me in the chat room to ask whether previously given targets for this vehicle and the Mini-Nasdaq were still valid.  The answer is yes, and, as you can see in the accompanying chart, the Hidden Pivot at 1870.50 is working very precisely today. It is shortable, but if the futures forge higher, the next logical stop would be 1879.75, a target that comes from shifting 'B' upward to Feb 28's 1866.50.

The futures were getting sacked Sunday night on news over the weekend that events in Ukraine were taking a menacing turn. No shots have been fired, at least not yet, but Russian troops have tactically overwhelmed the Crimean region so that Putin has a free hand to do as he pleases. Meanwhile, it's odd to see Wall Street pretending it cares about events in Ukraine. This is in sharp contrast to the last five years, when traders have acted as though the only thing in the world that even remotely mattered to investors was the obfuscating drivel coming from the Federal Reserve chairman. At the moment, I cannot bring myself to believe that the denizens of Wall Street even know where Ukraine is, let alone care about events there.  Under the circumstances, I'd guess that Sunday night's selling is occurring only because institutional trade desks fear that their benighted colleagues will be doing it. My advice is to not get caught short when The Dirtbags goose stocks higher on whatever news is seen to alleviate the world's supposed fears concerning Ukraine. Alternatively, if things do get worse, U.S. investors will simply have to keep the party on ice until the Western world's eulogies for Freedom in Russia have quieted some.

The shakedown in the wee hours of Thursday morning was so brazenly purposeful that we might infer it was executed by shady humans rather than by ethically pristine machines.  It would appear that DaBoyz simply pulled their bids around 5 a.m., allowing the futures to freefall for the next hour or so until the selling completely dried up ahead of the opening. Consider what this accomplished:  Index futures had a strong running start at the bell, putting sufficient pressure on shorts that it went largely unrelieved for the next eight hours. So what will happen next? Clearly, DaBoyz are finding it increasingly difficult to milk short-covering for more than a fright-mask spurt here and there. But neither have They given up much ground during the quiet intervals.  This has kept bears on a high state of alert, and although they've uncharacteristically resisted getting stampeded for the last few weeks, the pressure has been mounting steadily. It is hardly coincidence that the S&Ps have been left sitting an inch from new record highs as the week draws to a close.  If shorts can stay calm on Friday, denying the urge to bolt for the exits, they'll have an edge when stocks begin to trade next week. Will they? Would you expect sheep to act mellow when the wolves are closing in?

This is peculiar price action, since the futures refuse to fall apart after having narrowly missed achieving a clear rally target at 1859.50. Instead, they have pounded the 1838.50 midpoint support/resistance twice this week (see inset) without breaking it. My gut feeling is that short-covering is depleted for the time being, but that sellers are understandably cowardly about going after this erstwhile bear-killer. Most immediately, scalpers should look to bottom-fish the p midpoint support at 1840.25. A two-tick stop-loss is suggested.  The bigger picture still tilts bullish, since the 1859.75 target remains viable.

Bears got the worst of it yesterday after a promising opening that saw the Dow fall about 60 points.  Alas, the respite was short-lived, and the remainder of the day amounted to a herky-jerky rally that probably annoyed shorts more than scared them. That mood may last until the opening bell, but with new record highs just five points away, don't expect bears to feign zen calmness for long. Traders looking to board ahead of the next upthrust should look for external peaks to leverage on the 5-minute chart. I've labeled a few just so you get the idea.

It’s telling that the short squeeze DaBoyz engineered yesterday to kick off the new week failed to reach the 1859.50 target shown. The actual high fell 2.75 points shy of this objective. Although that may not sound like much, when a price pattern is as clear as this one, even a small target-miss suggests that there was not much real power driving the rally. My hunch is that the usual suspects have milked short-covering dry for the time being and that it could take at least a few days to prime bears for another run-up. This will be more easily accomplished if DaBoyz can keep the correction shallow, but it is they who will be on the ropes if this vehicle takes out yesterday's 1830.25 low in the process.  Under the circumstances, you should trade with a bearish bias, since the intraday charts are bearishly impulsive. The potentially tradable pattern I see at the moment, using the 3-minute chart, comes from the following coordinates: a= 1350.25 at 3:48 p.m. EST on 2/24; b=1842.00; and tentative c=1846.25. Please note, however, that it would take but a 1.00-point rally to generate a bullish impulse leg on the 3-minute chart, so scalpers should consider both sides of the opportunity.

Notice in the accompanying chart that the futures tripped a buy signal at 1824.40 last Thursday, subsequently reaching the 1831.50 midpoint pivot where half the position could have been exited for a partial profit. The 1845.80 D target was narrowly missed, but a move above it today, especially one that fails to exceed the #3 external peak at 1846.50, could generate a very subtle, and therefore very appealing, 'buy' set-up. Keep in mind that it is obscurely impulsive patterns such as that, that afford us entry opportunities designed to take advantage of the fear and confusion of others at breakout points. _______ UPDATE (11:12 a.m. EST):  Somehow forgot to mention this last night, but 1859.50 is where this stupid rally is going most immediately.

I don't pay much attention to head-and-shoulders patterns because they are everywhere one wants to see them. Even so, at the intuitive level, the inverted h&s shown in the accompanying chart looks more like accumulation than distribution. Under the circumstances, it seems very likely that the futures will soon ascend to new record highs, even if few of my fellow forecasters seem eager to go out on a limb with a specific prediction.  The weekly chart suggests 1945.00 is possible, but the March contract would first need to blow past the 1838.50 'midpoint pivot' associated with that target. A problem with this scenario is that a move to 1945 would not get the Dow to an analogous target at 17622 that I disseminated here earlier. There's always the possibility that the Dow will lead the S&Ps on the next surge, but it has been such a laggard so far -- lacking, as it does, the whack-o high-flyers of the Nasdaq -- that this seems unlikely. All things considered, I'll put more weight on the S&Ps than the Dow, with tracking guidance henceforth based on the 1945 objective. To further clarify: Odds of a rally to that number will shorten if buyers leave the 1838.50 'midpoint' choking on dust within the next several days.

Bears have tipped their hand Wednesday night with a snapback rally that failed at the midpoint pivot of the pattern shown. The implication is that the futures are now going to fall to at least 1812.75, perhaps in mere hours. It is probably too late for night owls to get short at the midpoint unless there's a feint back to it, but the D target can be bottom-fished via camouflage or with a limit bid and a stop-loss as tight as 1.00 point. ______ UPDATE (12:01 p.m. EST):  The futures went no lower than 1817.25. Thereafter, the likely best opportunity of the day came via a buy signal at 1824.00 (15-minute, A=1819.25 at 8:30 a.m., B=1831.25).  No one in the chat room reported taking the trade, but I have supplied provisional guidance nonetheless in posts logged around 10:35 a.m..