E-Mini S&P

Bulls are having obvious difficulty pushing past the all-time high achieved on New Year's Eve, a Hidden Pivot target that had been more than a year in coming. However, they've made things so unpleasant for shorts since then that they should be deemed well capable of forging into new record territory, and soon. A small pullback for a running start could yield a tradable opportunity for night owls to get long, based on the pattern shown. The 'D' target at 1831.75 can be bottom-fished with a stop-loss as tight as 1.00 point. Because this Hidden Pivot support coincides with structural support from lows made three days ago, it's worth no more than a single-contract bet. If the order fills and the position goes in-the-black, you'll need to implement a trailing stop from 1835.00 on up.  Note: The foregoing does not preclude the possibility that a far more significant correction awaits. I would lay 2 to 1 against it at the moment, but the futures could conceivably correct all the way down to 1694.50 without picking up much support. In any event, the longer they butt up against the old high without getting past it, the greater the chance of a serious tumble. _______ UPDATE (12:05 p.m. EST):  The futures traded no lower than 1833.75 overnight, so we did nothing. (Note: We did, however, get short in DIA using put options that had been recommended.)

The futures are once again banging on the 1846.75 rally target that so precisely contained the bullish stampede at year's end.  I'd said it would take at least 5-7 days for the S&Ps to return to their old high, assuming bulls were still as feisty as they were in the last half of December; in fact, it has taken 10 days. The differential is not sufficient for us to infer weakness or even hesitancy on the part of buyers, and we should therefore look for a quick stab toward the 1863.25 target given here yesterday.  The futures are no less a bull trade than they were yesterday, when I advised such. But they will become a 'spec' short nonetheless at the target, if tightly stopped. _______ UPDATE (11:14 a.m. EST):  With no news on the tape this morning worth caring about, the hesitancy of the futures to push into new record territory should be regarded as a perfunctory marking of time.  The pullback has already exceeded a minor, ugly 1836.50 target, implying that still lower prices are coming.  If so, look for a tradable turn from 1833.50.  This target is not of the highest pedigree, and so it should be bottom-fished, if at all, only with camouflage.

Tuesday's rally can serve to remind us that bulls are easily capable of reversing a nasty selloff like the one that began the week and turning it into the all-too-familiar swoon. Although they didn't quite recoup all of Monday's losses with yesterday's surge, they looked to be in good shape to do so today -- and then some. The 1863.25 target shown implies that traders positioned from the long side will have 30 points of upside to work with.  If you are long when the futures get there, I'll suggest applying some of your gains to a stop-loss on a short from that price.  This Hidden Pivot may not contain the mindless herd for long, but it still looks like a good bet to produce a tradable reversal.

We were ready for the New Year's top at 1846.50 because it missed a major Hidden Pivot target (see inset) by a single tick. I'd said at the time that it would take at least 5-7 days for bulls to make another run at the high. However, we should remain open to the possibility that a far worse correction -- or possibly even a bear market -- has begun. We'll know more when we've seen whether a 'hidden' support at 1796.25 contains this selloff.  But if there is no bounce from that number -- or worse yet, it is obliterated on first contact -- the futures could slide all the way down to 1694.40 (the red line) before finding good traction. None of this negates the possibility of a powerful rally that would take this vehicle to 2000 and the Dow to a target at 17622 that was broached here previously. In any case, I've already predicted a correction in the latter to at least 16067 before any big rally could begin. But to repeat: We should be alert to the possibility that a far more bearish scenario impends. In the meantime, we'll closely monitor rallies and pullbacks on the lesser charts, since, if there is still life in the long-term bull market, minor corrections to the downside should not reach their targets; and minor rallies, even corrective ones, should overshoot theirs.

The chat room has been quiet lately, sometimes with as many as 40 to 50 subscribers silently lurking from the sidelines.  Even so, the handful of active traders who are not there merely to watch have been calling profitable turns with enviable aplomb.  Yesterday, for instance, although this vehicle ended the day little changed, there were enough gratuitous ups and downs to provide a small but nourishing feast for anyone with the diligence and patience to harvest the opportunities thereof. In the course of the day, some subscribers played the upside, others the down, with both reporting success. On the accompanying chart, I've labeled what looked  to be the two easiest trades of the day.  While a more lucrative gambit would have been to have gotten short in the first hour, this would not have been the lay-up we all hope for, since it is never easy to go with a trend that has developed sufficiently that everyone is aware of it. This was the case yesterday, since the futures had been ratcheting steadily lower after peaking overnight, hours before the NYSE opening. Referencing the attached chart (see inset), buying at P1, a Hidden Pivot midpoint support, was the easiest trade of the day. Although it is in retrospect that I make this claim, it is a trade that I had actually flagged in the chat room before-the-fact.  It did not work out exactly as we might have hoped, however, since the futures reversed from a single tick above P1, stranding any bids that hewed precisely to my suggestion. The second 'easy' trade came on the small pullback to P2.  That is the midpoint resistance of the uptrending pattern labeled ABC in purple. As is taught in the Hidden Pivot Webinar, this is the best place to buy belatedly if

From a trader's perspective, the E-Mini has served up a growing pile of slop since the day after New Year's, when the futures topped a single tick from a very important Hidden Pivot target that had been posted in the chat room. The pile grew still larger with yesterday's emetic price action, and there is little point in trying to predict when the next exciting move will occur. My targets for the broad averages are quite a bit higher, but we should not dismiss the alternative possibility that the 1846.50 high achieved on the final trading day of the year will stand for at least a few weeks if not longer.

There was no follow-through to yesterday's rally, but bulls nonetheless generated a bullish impulse leg on the hourly chart that is likely to set the tone for today.  As you can see in the chart, the first attempt to extend the bullish A-B to a C-D follow-through failed precisely at the midpoint pivot. My hunch is that buyers will need to create a second point 'C' in order to get rolling. Accordingly, I'll recommend buy-stopping yourself aboard at the second 'x' entry point. This will be best accomplished with a camouflage entry on a chart of lesser degree, since the implied risk of initiating the trade using the big pattern is 3.50 points, or $175 per contract. Our goal when trading this vehicle will always be to cut theoretical risk per contract to more like 3 to 5 ticks, or $37.50 to $62.50.  For your further guidance, I've sketched in the trade hypothetically. Please note that the second point 'c' would alter your entry price and the midpoint resistance.

I all but guaranteed a tradable low at 1812.75 yesterday, but if you waited patiently for three hours for the opportunity to gestate, you can be forgiven for losing interest. Neither bulls nor bears would have enjoyed waiting out the hiccup that occupied the better part of the day.  There was just six points of movement in either direction to exploit, none of it easy money. The target is still valid but will be too long-in-the-tooth by Tuesday morning to be worthy of promoting.  Night owls can still try to leverage this opportunity with an 1812.75 bid, stop 1811.75.  Officially, I'll assume one contract, but you can step up the size if you use camouflage. Let's put a time limit on this one as well: 8:30 a.m. EST. ______ UPDATE (January 7, 9:29 a.m. EST): Time to throw in the towel on the trade, since bears have spent 90 hours unsuccessfully trying to reach a modest target that was signaled last Friday. Bulls have no energy either, judging from the evidence this morning. Sure, the Dow will open up 80-90 points. But that is really pathetic, considering they've had four days to prime and pump the short-squeeze engine. From a trading standpoint, incidentally, the futures are a 'camo' long at the moment.

This vehicle has been moving very precisely in both directions relative to our Hidden Pivot targets -- not that that has made it a breeze to trade. On Friday, a dive in the second half of the session reversed from a single tick above a midpoint support I'd flagged as tradable in the chat room. Then, a second attempt to breach the support in the final hour also failed. When downside progress is labored like this, we should infer that bulls hold the upper hand. This would imply more progress Sunday night, to at least 1835.50, the 'D' target of the minor ABC rally from Friday's bottom. Bulls' further progress this week would become likely if they are able to exceed that number by more than two or three ticks. Alternatively, if the futures head lower without having exceeded 1833.00, expect them to come down to at least the 1812.75 target shown. It can be bottom-fished with a stop-loss as tight as 1.00 point. Note that all of the action on Thursday and Friday occurred below the 1846.75 target that I'd said might stop the rally for perhaps 4-5 days. For all we can guess at this point, it could prove to be the top of the bull market. Odds are against this, given that the bull has been chugging along for nearly five years. In any event, we'll be better able to judge the long-term bull market's health when we've seen how minor rallies and corrective patterns play out over the next few days.  The first sign that something might be wrong is if the 1812.75 support is decisively smashed today or tomorrow.