E-Mini S&P

If sure things exist in the world of technical forecasting, then the impending rally to exactly 1841.00 is one of them.  In the accompanying chart, notice how the 1818.00 midpoint Hidden Pivot has been literally pivotal to the futures ups and downs this week. First, on Sunday evening's opening bar, the gap up through it all but guaranteed that the rally will continue to at least 1841.00. And then yesterday, the session's deepest pullback, which occurred on the opening bar, bottomed at 1818.25, a single tick from the pivot.  The futures obviously 'know' that Hidden Pivot constraints are there, and it remains only for March contract to rally to the 1841.00 'D' target of the pattern to complete the minor bull cycle begin last Wednesday. Trading this precise, ostensibly useful, intelligence is another matter, since bulls are taking their sweet old time getting to the target.  Yesterday's tedious fluctuations were essentially untradable.  However, traders should be prepared for an out-of-the-blue surge, which could occur outside of regular hours or perhaps via a short-squeeze at the opening bell. In any case, I'd suggest using the 2-minute chart or lower to find the minor ABC pattern that can get you aboard with relatively little risk. Shorting 1841.00, on the other hand, can be done straightforwardly by offering a single contract at 1840.75, stop 1842.25.  If you want to increase the size of the position, then camouflage is the way to go -- especially since it's possible that a target I've drum-rolled as I have this one will get front-run.

Subscribers who used the 1818.00 target I'd proffered in the chat room Friday to get short could have covered the position less than an hour later for as little as 1812.50. (One subscriber who played it strictly-by-the-numbers reported shorting 34 contracts at 1816.25 and covering them all at 1814.50. The gain would have worked out to about $2975.)  Near the end of the session, I further advised keeping 25% of the original position to swing for the fences. But that, too, should have been covered, since the futures traded up to 1820.00 on Sunday night's opening bar. And now what? Since the 1818.00 target, a Hidden Pivot, is tied to a more important one at 1841.00, that's where we should assume the March contract is headed today.  I would rate a rally to that number a very good bet, but because the futures are in record territory and virtually everyone is bullish, the path they are likely to trace out on their way to the target is apt to be tortuous and devious. Night owls can try to catch a ride on a pullback to the 1818.00 red line nevertheless. As always, 'camouflage' will be the entry method of choice. However, if you're game to try another tactic, the implied 21 points of profit (on a ride from from 1818.00 to 1841.00) gives you 7 points of stop-loss to work with if you use a buy-stop entry or a straight bid at 1818.00. If you're successful on the long side of this play, you should reverse the position at 1840.50 and go short with an 1842.25 stop-loss.  If you hold no position if and when 1841.00 is closely approached, try shorting a single contract at 1840.50, stop 1841.50.

The lunatics and thieves who stoked yesterday's Tapeworm-induced short-squeeze are aiming for at least 1830.25, a Hidden Pivot target which if achieved would imply at least 200 more points of upside for the Dow over the near term. The so-far intraday high at  1806.75 refreshed the bullish energy of the hourly chart by exceeding all previous highs, but the futures will probably still need to pull back to at least 1797.25 to get a running start on the next leg up.  If you're keen on catching a ride higher, I'd suggest waiting for a second point 'C' low to form before acting. I've sketched this out hypothetically for your further guidance. ________ UPDATE (9:30 p.m. EST): In after-hours trading the futures have gotten within a single tick of tripping a buy signal at 1806.50 (see inset, a new chart). It would be the first such signal, however, rather than the second, which is the one I'd recommended jumping on. Accordingly, you should wait for the pattern to develop as I've sketched it before looking for an entry opportunity on charts of lesser degree. Assuming you're a night owl, you could also attempt it on the signal that appears to be imminent, using the point 'A' low noted. This is suggested if you're worried that the trade will get away from you if you wait for a second point C to form. ______ UPDATE (December 20 at 2:29 p.m. EST): In the chat room, I've drum-rolled an 1841.00 target, subject to midpoint resistance at 1818.00. As of this moment, the intraday high is 1817.75. I've flagged this number as very shortable and suggested doing so via camouflage on the one-minute chart.  As of this instant (2:29:13), an impulsive downtrending abc would be signaled by an 1816.50 print. _______ UPDATE (3:34 p.m.):

Yesterday's low occurred a single tick beneath a Hidden Pivot support at 1770.50 (see inset) that evidently worked to get a chat-room denizen aboard in timely fashion. A tightly stopped buy at that number would have caught the best trade of the day -- the only easy trade, perhaps, given that the futures spent the remainder of the session screwing the pooch after rallying nine points from the bottom. If this is the Santa rally, we shudder to imagine what January's going to be like.

The futures failed to get airborne after embarking on phase 2 of yesterday's short-squeeze, but the impulse leg itself was still intact and presumably waiting to be 'actualized' when the day ended. If this happens it will probably be over before it begins, perhaps by way of a short-squeeze that leaves traders choking on dust at the opening bell. However, night owls might be able to catch a ride with a 'camouflage' entry. The most useful 'external' peak available for this purpose is the one at 1780.50 high that I've labeled.  Any b-c pullback from just above it (i.e., 2-3 ticks) would be just the ticket.

The March contract was looking relatively placid Sunday night -- until about 30 seconds ago, that is, when the steeply diving price bar shown materialized on the chart. Minutes later, the futures have already recouped half of this nasty shakedown, but my hunch is that it's not over, since the so-far low at 1754.00 exceeded D=1757.00 (the green line) by three points. If this proves to be the case, look for more slippage to 1744.00, the target calculated by sliding 'A' up to 1798.25. _______ UPDATE (10:57 a.m. EST):  1754.00 was in fact the low -- quite a low, actually, since DaBoyz were subsequently able to jack this hoax all the way up to 1786 before they ran out of bears to brutalize. The last piece of the rally (15m, A=1777.00 at 9:45; B=1786.25, C=?) was bullishly impulsive, so there would appear to be a second-wind surge in the offing.  If so, it could be tradable via camouflage.)

Yesterday's stop-loss on a bottom-fishing recommendation missed nailing the intraday low by a single tick. The three-tick stop I'd recommended was quite tight, to be sure -- but not too tight, considering how pretty the pattern that produced the target was.  A couple of chat-room denizens who had judiciously left a little more room reported catching a ride anyway -- and it could have been a good one, since the subsequent rally was an 11-pointer. A relapse has brought the futures down to within inches of the day's low, which itself created such a nasty looking impulse leg that I'm inclined to think it's a bluff.  I wasn't looking for the stock market to Santa-up until next week, but perhaps yesterday's fright-mask performance wig augurs an upturn sooner than that. _______ UPDATE (December 13, 12:01 a.m.): I hadn't noticed this earlier, but the futures have generated the first bearish impulse leg we've seen on the daily chart in a long while. This argues for caution, at least until a second down-leg (aka C-D) tells us, via price action near the Hidden Pivot midpoint, how serious the threat is.

Wednesday's dreadful performance produced only a couple of rally attempts, both of them feeble, but I wouldn't expect much from this vehicle until it hits the 1772.50 target shown.  Night owls should look to get short via camouflage, using oscillations around the midpoint pivot as your focus. Bottom-fishing at the target will probably be easier, if that's what you prefer, and you can do so via a 1772.50 bid, stop 1771.75, for a single contract. _______ UPDATE: The low was 1771.75, but at least one chat-roomer managed to hang on with a stop-loss at 1771.50.  While it is natural to assume that DaBoyz 'run stops' above and below key supports and resistances, it is another matter when they hit stops slightly above or below Hidden Pivots, since since we are the only ones who know about these swing points.  My judgment is that institutional traders are tuned to my numbers and perhaps even present in the chat room. Henceforth, I will try to be more guarded in presenting them.

With virtually everyone apparently eager for the Santa rally to commence, the stock market has only grown increasingly constipated and agitated. I expected this condition to make it difficult for the E-Mini futures to achieve even the modest target at 1814.25 proffered here yesterday.  What surprised was that when the rally failed to materialize, the ensuing selloff was not even strong enough to achieve an equally modest downside target at 1799.00.  Under the circumstances, only the nimblest traders should be mixing it up with the E-Mini crowd right now.