ESU10

It's difficult to recall a Sunday night when the futures were not being squeezed higher.  This con-job is pretty lame, though, at least so far, and it will need to get past a midpoint resistance at 1078.50 in any event to open a path to 1086.25, its sibling midpoint. Camouflage for the bull trade will be tough to find, since Friday's end-of-day rally has been in a shallow consolidation since, but you can short 1086.25 with a stop-loss as tight as 1.00 point. _______ UPDATE (10:04 a.m. EDT): The futures faked their way to 1079.75 overnight, exceeding the midpoint resistance noted above by 1.25 points. We'll categorize it as a midpoint failure nonetheless -- close enough for government work. The pullback has been feeble so far, however, suggesting that sellers and short-coverers will spend most or all of the day thumb-wrestling.

Bears can take their pick from among a dozen fetching patterns that all point lower, some of them much lower. One I rather like implies the futures could fall to as low as 992.25, and quickly, if DaBoyz pull the plug. The sibling midpoint support of that target is 1060.75, and we should therefore look for a bounce from that number to confirm our worst suspicions.  The pattern is shown in the accompanying chart. Since we should never rule out the possibility of a well-orchestrated short squeeze, let's use a print at 1084.25 today to warn of trouble.

Yesterdays afternoon's 20-minute wilding spree should have scared hell out of shorts (yet again), which is why it occurred to begin with. From a Hidden Pivot standpoint, the rally was ineffectual for two reasons: it surpassed nothing nada zilch, even on the 15-minute chart; and it occurred after the downtrend had already punctured a key low from June 15, creating a robustly bearish impulse leg on the intraday charts. The pattern has become too ragged to read with much confidence, but it points ambiguously toward 1063.25, a Hidden Pivot support that is not recommended for bottom-fishing.  Getting short is another matter, of course, but it will not be possible to do so by way of an entry price I can project overnight. Incidentally, bulls would have a chance of temporarily reviving their hoax with a print today at 1098.25.

The futures flirted at day's end with an 1190.75 target disseminated in the chat room before cracking the support and touching a low of 1189.25.  The 1.25-point overshoot is sufficient for us to infer that more weakness lies ahead, and so I'd suggest that traders -- including, possibly, night owls -- look to get short near 1104.00, the midpoint support that was cracked on the way down to 1190.75. A mechanical short from that pivot is not advised; rather, you should look for camouflage -- meaning, perhaps, an entry at the point 'X' of a downtrend on the one- or three-minute chart. In any case, 1104.00 is the most logical spot for a short-squeeze to sputter out Tuesday night or Wednesday morning, although the futures may not get that far.

Late this evening, the futures were in the throes of yet another Sunday night short-squeeze.  The high so far has been 1127.50, a single tick from the 1127.25 rally target we were using as a minimum upside target on  Friday.  The futures have since backed off as much as 10 points, but the hysteria that has already transpired might still require a catch-up rally in the Dow to 10572, a target that corresponds to the E-Mini target.  The pullback has alread exhausted an 1116.00 midpoint support and gone on to create a new and higher point 'C'; otherwise, I might suggest bottom-fishing for night owls.

A Hidden Pivot target at 1127.25 is equivalent to the one at 10572 given in today's DJIA tout.  The midpoint resistance at 1113.75 has already been exceeded, although not on a closing basis, so we won't assume yet that the rally is a done deal. Night owls can try getting long in the conventional way, at point 'X', if the pattern shown in the chart plays out in normal fashion, more or less as shown.

The futures tried all day to get past our Hidden Pivot target at 1115.75, but in the end 1114.75 was the best they could muster.  A smidgen of short-squeeze could change that today, but the rally would not become nettlesome unless it exceeds a prior peak at 1118.00 that is shown in the chat. This is equivalent to a resistance noted in today's DIA tout, and it is shown in the accompanying chart.

Yesterday's vaporous hoax-of-a-rally gathered irresistible force as such rallies nearly always do -- on almost-nonexistent volume, in the dead of night.  It took bears three hours to regain their footing after the ambush, but by day's end they'd succeeded only in bringing the futures back to unchanged (or thereabouts).  I continue to favor the short-side -- fervently -- since Mr. Market has been making it damned near impossible to get short.  I've also got Steve Puetz's cycle date in mind and mentioned it in the chat room.  He notes that the eight biggest crashes in history have all occurred 3-6 days after a full moon that occurred within six weeks of a solar eclipse. That implies a June 20-29 window in this case -- and hey, I'm not superstitious myself, but where's the harm in laying in a small, speculative inventory of puts ahead of the weekend.  In the meantime, I'm not going to suggest anything clever to get short today, since all it would have taken yesterday was to have laid 'em out just beneath the in-your-face high at 1102.75 recorded on June 4.  Sometimes being devious and diabolical requires only that Mr Market do the obvious.  Yesterday's little trick was right out of Poe's  "The Purloined Letter".

Let's make DaBoyz push this hoax past 1118.00 (1122.75, basis June) before we jump on the bullish bandwagon.  That number corresponds to a peak along the wall of May's decline, and a rally that exceeds it would create a sufficiently robust impulse leg on the hourly chart to warrant our bemused attention if not our respect. Keep in mind that the rally would need to be unbroken on the hourly chart from the time it passes the "starting line" represented by twin peaks #1  at 1102.75.