E-Mini S&P

Even though I've treated the stock market's ability to remain aloft as disappointing Q2 earnings rolled in as a sign of underlying strength, we shouldn't ignore the fact that the S&Ps have begun to roll over from within inches of a major Hidden Pivot target at 1708.75 (see inset). We'll continue to look for shorting opportunities in real time, so stay closely tuned to the chat room if you're interested. Click here to learn how you can reduce entry risk by using the 'camouflage' trading technique.

Bulls won by decision yesterday, recouping losses and then some after getting hammered beneath a midpoint support in pre-dawn trading. Once again, the gains occurred against a backdrop of lousy Q2 earnings, making buyers' performance seem more impressive than the relatively modest point tallies they were able to rack up. After the bell, this vehicle appeared headed precisely to the 1690.25 rally target shown in the chart. Since that implies just 4 points of upside, however, the more attractive trade could be a short from the target. To keep it simple, I'll recommend a non-camouflage entry -- i.e., just a straight offer of a single contract at 1690.25, stop 1691.25.  You'll be on your own if the order fills, but keep in mind that the initial 1.00 point of theoretical risk will require you to shoot for a profit of at least 3.00 points ($150) on the exit. _______ UPDATE (9:54 a.m. EDT): Last night's feeble rally stranded our short offer when it topped at 1689.00, just shy of the target. The E-Mini's failure to achieve a relatively modest objective suggests it is unlikely to rally by much today -- but neither is it likely to plummet, since the opening thus far has been too boring for words.

Wednesday's moderate selloff was bearishly impulsive on the hourly chart, but it didn't negate the 1703.75 rally target shown in the chart. Night owls should look for a bottom-fishing opportunity at the 'p' midpoint support of the small corrective a-b-c at the right-hand edge of the chart. Camouflageurs looking to buy-stop their way aboard will need to zoom down to the 3-minute chart or lower to find the 'external' peaks needed to do this with ease.

Bears could be in for a respite shortly, since there's a major Hidden Pivot resistance not far above, at 1708.75.  Another at 1703.75 that was noted here previously remains viable, but we should defer for the time being to the higher number, since it is by far the more important.  Camouflageurs can try shorting at either, or both, but  I'd suggest doing so at 1703.75 only if the theoretical entry risk per contract can be held to no more than five ticks (1.25 points). _______ UPDATE (4:54 p.m.): Tuesday's pullback was mildly impulsive and pointed toward a 'D' correction target at 1683.25 that can be bottom-fished in any way that suits your style. Night owls should consider shorting the implied fall, since the p midpoint support at 1687.50 has been exceeded by 1.00 point. The pattern is shown at the right-hand edge of the chart (a new one), along with our original rally target at 1703.75. _______ UPDATE (July 24, 1:34 p.m. EDT): A moderately bearish impulse leg has been generated on the hourly chart today, but it would become more serious with just a little more selling. Specifically, the short-term outlook would take a turn for the worse on a print at 1676.75. So far, the intraday low is 1678.25.

With business headlines in a Q2 earnings wallow, the bullish trajectory of stocks has barely slowed. Notice in the accompanying chart that after stalling at the midpoint resistance for a mere day, the S&Ps have crashed through it and now appear headed with irresistible force toward its 'D' sibling at 1703.75. That implies a mere 120-point Dow rally, but my hunch is that the target will not put up much of a fight. Sunday night owls may be the only traders able to catch a ride, since it could well be over -- at least temporarily -- on whatever gap-up opening DaBoyz are able to engineer Monday morning. _______ UPDATE (July 22, 5:23 p.m. EDT): The futures spent the day screwing the pooch, which is about as bad as it ever gets these days for the broad averages when the news is bad or worse.  The 1703.75 target noted above remains viable nonetheless, and the E-Mini therefore remains bullish from a trading perspective. Camouflageurs should look for opportunities on the 5-minte chart or lower.

After Monday's tedium, the futures are so quiet tonight that one could almost mistake them for cuddly.  In fact, they are more likely the critter in Alien, poised to explode from one's stomach if left unwatched for just a minute or two.  For now, we'll continue to use a Hidden Pivot resistance at 1708.75 as a minimum short-term rally target.  The futures will get there in a trice if the news is good, although truly bad news -- more Fed easing, yay!!!! -- could tend to slow their ascent somewhat.  For your information, due out Tuesday are reports on 1) consumer prices; 2) industrial production; and, from the National Association of Home Builders, 3) the housing market index for July.

Today's chart takes a couple of steps back to show what became enticingly obvious with Wednesday's impulsive thrust. A 40-point rally lies ahead, as well as a promising short from the 1708.75 target.  Camouflageurs will need to be at their nimblest to get long, however, since the only 'external' peak remaining that can be leveraged is the one at 1666.75 recorded back in May. It has been exceeded in after-hours trading early Thursday morning, so it's possible that only night owls will get a crack at it. _______ UPDATE (July 14, 11:32 p.m.): Waft, waft, waft. The futures were trading above Friday's highs in very un-timid action Sunday night.  Although the gains were relatively modest as of shortly before midnight, it is brazen of DaBoyz to venture into uncharted waters ten hours before the opening bell. Camouflage entry opportunities will be difficult to find under the circumstances, but the 1677.00 target of a minor pattern (5-min, A=1667.00 at 1:10 p.m. on 7/12) might be helpful to night owls.

The futures are streaking toward the 1645.25 target implied here yesterday, but there will be opportunity in this only for camouflageurs prepared to leverage the 'external' peaks labeled in the chart.  As always, a quick, subtle B-C pullback from a tick or two above any of them will be the ticket for a long entry. You'll need to be quick, however, since the breakout is universally expected -- and hardly unlikely. _______ UPDATE (9:49 a.m. EDT): This morning's opening high at 1646.75 somewhat exceeded my target, but without surpassing any of the 'externals' noted in the chart (the first of which lay at 1647.50).  Under the circumstances, camouflageurs should move to the sidelines until there's a print slightly exceeding 1647.50, then a B-C pullback.______ UPDATE (9:54 p.m. EDT): Bulls managed to weasel their way to an impulsive peak that was precisely where we'd wanted it to be, but they were too tired to overcome the weight of the bull trap that DaBoyz had sprung on the opening bar. Even so, bears were on the ropes once again at the close, and it therefore won't take much to short-squeeze this gas-bag past mid June's highs come Wednesday morning. Night owls  shouldn't have much trouble staking out a low-risk long position, since Tuesday's choppy action created numerous 'external' peaks on the lesser charts that can be used opportunistically for camouflage.

The ostensibly bearish pattern shown never even got close to the midpoint support during recent sessions, implying that bulls will be ready to romp as the new week begins.  The uptrending ABC pattern at the right-hand side of the chart has already triggered a buy signal, but the pattern has little value predictively because its 'D' target coincides with mid-June's highs. Camouflageurs may be able to leverage a 1635.50 peak made June 19 on the way down, but it'll require zooming in on a sub-hourly chart to make the peak display properly.