ESM13

Bears' best efforts yesterday weren't sufficient to push this vehicle remotely near a 1623.75 downside target I'd proffered. Now let's see if bulls have the gumption to forge higher, first by pushing past the 1660.75 'p' midpoint pivot shown. Long entry has been triggered Thursday night at 1655.75, and so the pattern is fair game for camouflageurs looking for a low-risk buy-in. DaBoyz aren't likely to goose the rally to D=1670.50 overnight, although it looks like a pretty good bet to reach p=1660.75.  Thereafter, traders might have to abide a second (i.e., lower) point 'C' before this hoax can find purchase on the morning's news.

The fact that DaBoyz failed to rally stocks back to unchanged yesterday bears watching, since it's been a while since anything that weird has happened. The Indoos were down 180 points at their nadir, but it should have been a piece of cake to short-squeeze a loss of that size out of memory. Assuming sellers prevail for an unthinkable two days in a row, traders should use the 1623.75 Hidden Pivot shown as a minimum correction target. We looked at this pattern during yesterday's tutorial session and found things to like about it, including a beautifully carved, one-off point 'A'.  Since the target is a comfortable four points above an obvious shelf of structural support created earlier this month, you can bottom-fish with a stop-loss as tight as 1622.75 -- or via camouflage, which will usually be the preferred way of getting aboard.

Night owls looking for a way to pass the time profitably might try bottom-fishing at the 1648.25 midpoint pivot shown. (Notice that I've used a distinctive one-off A here.) 'Camouflage' will generally be the best way to go, but in this case the patterns looks sufficiently promising to attempt it with a bid at the target and a two-tick stop-loss. Another thing to like about 'p' is that it is not near any prior structural lows that the hoi-polloi would tend to use for similar purposes.

The daily chart is starting to look heavy (see inset), but the selling so far has not come even remotely close to generating a bearish impulse leg.  The hourly chart is another matter, even if the flux of bullish and bearish legs recorded over the last several days looks to be no worse than a skirmish. The  duel would tip in bulls' favor on a rally exceeding Sunday night's so-far high of 1657.75 high by just just 1.50 points.  Night owls looking for an easy way to get long should take note of the 'external' peak at 1659.00 (5/22 at 7 p.m.) for this purpose. _______ UPDATE (11:42 a.m. EDT): The first impulsive push above 1659.00 did in fact generate a very tradable pattern: A=1654.50 (5/27 at 11:00 p.m.); x=1663.00.  Since D=1669.75 has been exceeded by a few points, we should infer that the current pullback will give way to yet another upthrust.

The futures were having trouble getting loft Thursday night, suggesting they might take the path of least resistance to the 1623.75 target shown.  The wide oscillations around the midpoint pivot suggest, however, that it's not likely to be much worse than that, and that bulls in any event are not going to be easily pushed around as the week draws to a close. For 'camo' traders, the micro-peak at 1657.00 that I've highlighted has the potential to be the most opportune spot on the chart for getting long.

Knee-jerk hysteria triggered by Bernanke's empty blather on Capitol Hill created a bull-trap high that exceeded my rally target by 6.50 points. The subsequent massacre has traced out the potential usable ABC correction shown in the chart.  Camouflageurs looking to get short (or long) should note its 1641.25 midpoint support and 1623.75 target.  If you're just spectating, expect a fall to the lower number if the first is breached by more than three ticks. _______ UPDATE (12:35 a.m. EDT):  The overnight low was almost exactly midway between the two targets given above.  The lower of them will remain valid in theory until such time as the point 'C' of the pattern has been exceeded to the upside. However, the market's sharp bounce has made this unlikely.  It is astounding, inscrutable and...ghastly that sellers were able to generate no follow-through whatsoever this morning after last night's avalanche. Hack off this steroid-addled market's arms and legs and it would feel no pain -- would sprint the 440 in record time on the stumps of its bleeding legs.

Recent price action has been so tedious that one could forget that we're now using a long-term rally target that lies somewhere between the ionosphere and the cosmos. Camo traders should continue to position from the long side, but that said, even squeezing a couple hundred bucks out of this rabid dog's ups and down each day has been challenging.  The 1679.25 rally target given here yesterday (see inset) still obtains for the near term, so there's 13 points of immediate upside potential, however tortuously it is realized.

With the futures unchanged at the moment, DaBoyz are taking mincing steps early Monday morning, a reliable sign that they're fixing to take stocks higher if there is good news, or at least an absence of very bad news, with which to trigger off a short squeeze. We have some very bullish long-term targets to guide us, but for trading purposes the pattern shown is the one to use. It projects a short-term rally top at 1679.25 that is already an odds-on bet, since the p midpoint Hidden Pivot with which it is associated, 1662.75, has already been exceeded by a decisive 4.00 points.  Since the index is in uncharted territory, camouflage traders looking for a good long-entry signal will likely do best focusing on the 15-minute chart or less.  If you'd rather try shorting 1679.25 (without camouflage), an initial stop-loss of 1.00 point is advised.

A key target at 1647.50 that had been weeks in coming survived for all of a day, suggesting that buyers have merely been getting warmed up. Now let's see how they do versus a minor target at 1665.00.  As of early Thursday morning, the onslaught had stalled a tick from the 1657.00 midpoint pivot. If they surmount it before morning, the week could end with a short-squeeze rampage.