E-Mini S&P

The futures popped through our longstanding rally target at 1881.50 on Friday, and although they settled just beneath it, the six-point overshoot implies that the broad averages are likely to head still higher this week. I'll update if Sunday night's opening seems to suggest that traders are worried about Ukraine, or perhaps even about the possibility that jihadists sabotaged Flight #370 out of Malaysia.  The fact that the world  is arguably a more dangerous place than it was even a week ago will be of little concern to Wall Street, but sometimes the stock market will waver briefly anyway because traders are worried that other traders might somehow see such events as being material to the ups and downs of shares.  Whatever the case, we'll use the 1945.00 rally target broached here last week as a minimum upside objective for the near term. _______ UPDATE (3:03 a.m. EST): The futures are struggling feebly to achieve a correction target at 1867.75. Night owls can try bottom-fishing there for a single contract (unless via camouflage), using a 1.00 point stop-loss. Please note, however, that if short-covering buyers fail to materialize at 1867.75, this brick could fall all the way to 1860.30 before finding traction. (That Hidden Pivot support would be tradable as well.)

The futures spent the entire day playing toe-sies with an 1881.50 rally target disseminated on Wednesday. Some subscribers reported getting short, but they'll need some luck to hang onto the position. Although it took this gas-bag several days to hit our number, suggesting that short-covering is weak at the moment, this is unlikely to last. Pullbacks have been shallow, keeping bears pinned to the ropes, and it will take a nasty downdraft as the week draws to a close to put bears in the comfort zone come Monday. Stranger things have happened, of course, but it would be passing strange for a downtrend to unfold that lasts for more than a few days. I've broached a 1945.00 target if DaBoyz should bully their way to new highs in the week ahead. Although I am unable to imagine a good reason for such an explosion, I've learned over the last five years that no reason is needed. More immediately, since the E-Mini ended the day in the throes of a pattern that was impulsively bearish on the 15-minute chart (targeted on 1872.50, where A=1880.50 at 1:10 p.m. EST), night owls should trade with a bearish bias. (Please note, however, that this endeavor could prove dicey, since bears are having an awful struggle holding this little sonofabitch down in after-hours trading.)  Another tactic would be to bottom-fish the target -- or 'a' target -- with the goal of racking up sufficient gains on any ensuing rally to cushion the stop on the next short.

This hoax could hit 1945, a Hidden Pivot target, over the next week or two, but first it will have to get past the 1881.50 target shown. That's been my minimum price objective for a while, and the fact that such a modest target is taking days to achieve suggests that short-covering is pretty well spent, at least for the very near-term. Still, the pullbacks have been shallow, giving bears no real respite, and it is therefore only a matter of time before they reach critical mass again to catalyze the next stab higher. Traders looking to board for what remains of the rally should look for opportunities on charts of 5-minute degree or less. The target is short-able with a three-tick stop-loss, but I wouldn't suggest impeding the flow too aggressively.

During an impromptu trading session yesterday, we discovered a promising rally target at 1881.50 that is still valid (see inset). Getting long will be tricky even for night owls using 'camouflage, but if you pull it off, don't hesitate to deploy some of your profits on a tight stop-loss after shorting at 1881.25.

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.