E-Mini S&P

Two important Hidden Pivots await to challenge the gumption of Wall Street's mechanical bull.  The resistance points lie, respectively, at 1748.00 and 1767.00, and we'll be looking to get short in either place -- to make a small profit, even, if we're wrong and stocks simply ratchet past both. The lower number can be used as a minimum upside projection for the near-term, but with the caveat that the party -- in its 56th month now and as frivolously energetic as ever -- could end at any moment. If the higher target is in fact easily surpassed, we will once again have underestimated the foolishness that has driven stocks ever higher since 2009 and which would now flout abundant evidence that the Republic itself is crumbling. (Click here...or...here, if you need to be convinced.) Traders can use a stop-loss as wide as 2.25 points shorting 1748.00 if they are reversing a long position entered at 1739.00 or lower, but we'll play it by ear if there's a trade at 1767.00. The chat room will be the place to be if you're game to play.

Now that's more like it! We've been looking for a rally to get short, and yesterday's knee-jerk spasm promises even richer prices in the days ahead. In the chart that accompanies this tout, you'll see numerous ABC rally patterns, each with a unique target. The two we should focus on today are 1726.25 and 1733.25, and day traders can short either using the camouflage technique. If you're looking to do the trade quick and clean with a simple short offer, try a single contract at the higher number, stop 1734.25. I'm suggesting this because the precise impact at the p midpoint has validated the target itself. Although there's money to be made on the long side as well, it may be available only to night owls, since Thursday's opening bell could produce a gap-up rally to either of the targets given above. For detailed instructions on initiating a position short in the Diamonds, stay tuned to the chat room and my e-mail bulletins.

Bears were getting battered senseless when last week ended, so expect them to be buying with both fists to cover short positions when stocks get rolling on Monday. This will not preclude the possibility that DaBoyz will manipulate stocks lower Sunday night in order to shake out sellers still nervous about Washington's dithering.  However, the supposedly smart money will be betting in any case that a deal is inevitable and that the market will roar higher when it is announced. From a technical standpoint, trends both minor and major are in synch to drive stocks higher, presumably toward either of the two targets shown in the chart. Notice that the midpoint resistance of both patterns gave way easily, and  that each has since become a point of consolidation. This has shortened the odds that the lower of the two rally targets will be reached. Looking beyond this, my concern is that the political currents that have pushed stocks hither and thither in recent weeks will turn out to have been a red herring. Many investors are bound to assume that a temporary peace in Washington will clear the way for a stock market rampage to who-knows-how-high.  If so, this attitude would beautifully 'set the hook' to trap bulls at the top. My gut feeling is that Obamacare alone, effectively a huge new tax on the middle class, will suffice to turn an already moribund economy into a deeply recessionary one. If so, with stocks just a short distance from all-time highs, investors are manifestly unprepared for the gathering storm. More immediately, traders working the night shift should ignore the news from Washington and look to bottom-fish whatever sleazy shakeout occurs ahead of Monday's opening bell. If you use the camouflage technique to get long, watch on the 15-minute chart for

So now the rumored deal on the debt ceiling supposedly is in jeopardy. What will the criminal lunatics who short-squeezed the Dow for 323 undeserved points yesterday do next? The night shift has seen this vehicle down 11 points so far, but DaBoyz have since been able to engineer a 7-point pump-and-dump rally. Absent a deal on Capitol Hill Thursday night, there could be an avalanche of remorse at the opening bell. My hunch, however,  is that things will be more subdued, and that traders will be gambling that the weekend will produce 'progress' in Washington.  Under the circumstances, the futures are a scalp-trade right now at best, and you should therefore do your hunting on charts of 15-minute degree or less.  This yields a bearish picture at the moment (i.e., 6:59 p.m. EDT), but I'd be looking to get long nevertheless near the 1675.25 p midpoint pivot shown.  If it gives way easily, however, take it as a warning that the avalanche of remorse could indeed be on its way.

Traders who went bottom-fishing at the 1666.50 pivot flagged here yesterday would have been stopped out quickly for small change, assuming they applied the two-tick stop-loss I'd suggested. The triggering of the stop was warning of lower prices to come, as indeed they did.  Yet more selling appears likely, but the two Hidden Pivot targets shown -- respectively at 1639.50 and 1632.25 -- look ill-suited to contain the downtrend.  My hunch is that sellers will test the structural support of some key lows near 1620 that were recorded in late August/early September and which should have become 'magnetic' by now.

The futures took a 13-point bounce yesterday precisely from the 1666.50 correction target I'd disseminated the night before, providing an easy opportunity for profit. Traders who caught the move and who are game to try again should plan to do their buying at the 1657.25 Hidden Pivot shown.  A two-tick stop-loss is all you should allow, with partial profit-taking on multilot positions if 1660.00 is reached on the bounce. As always, an easy and decisive breach of so clear a target should be regarded as a warning that still lower prices impend.

DaBoyz have put the E-Mini S&Ps in a holding pattern after gapping them down 12 points Sunday night. As you can see in the chart, the so-far lows lie just above a Hidden Pivot support at 1672.25.  The goal of this carnival-midway maneuver is to exhaust sellers, allowing those who ply the night markets to pick up stray contracts that can easily be unloaded at higher prices. However, if more contracts come in for sale overnight, making it difficult to waft this vehicle higher, look for it to ratchet down to at least 1666.50. Traders can try can try bottom-fishing there, but I wouldn't suggest leaning too heavily on the support, since the fetid political air on Capitol Hill has the potential to change the mood on Wall Street from surly to ugly in a trice. ________ UPDATE (10:47 a.m. EDT):  The futures trampolined 12.50 points off 1666.50 exactly. If you caught a ride using multiple contracts, you should have exited 50%=75% of the position by now.  For tracking guidance I'll asume a single contract remains from four, and a profit-adjusted cost basis of 1652.00.  An impulse leg-based stop on the 3-minute chart right now -- which is what I am suggesting you use -- would take us out at 1670.75.

Price action lately has been squirrelly, to put it mildly. That doesn't mean the futures are unpredictable, only that trend legs in either direction haven't been getting very far before reversing. That said, the 1666.75 midpoint support in the chart shown looks like a good place to try bottom-fishing with a stop-loss as tight as 1.00 point. If you initiate the trade with a straight bid, one contract will suffice; if via camouflage, use four.  Please note that if the stop is hit, more downside to the 1656.00 'D' target would be implied.

We squinted and pored over the lesser charts in search of an attractive real-time trading opportunity during yesterday's tutorial session, but there were none to be found. Bears held a small edge at the close amidst a tedious flux of bullish and bearish impulse legs, all of them minor.  Even so, your best bet for today my lie in the 'external' peak at 1692.75 that I've flagged in the chart. Any 'dwarfed' impulse leg that exceeds it slightly, then pulls back into a 'b-c' correction, could get you aboard for a bullish finishing stroke to the week.