ESZ09

Last week's 65-point rally was aggressively impulsive, having exceeded two "external" peaks on the daily chart, one of them the recovery high from the March 9 low. Bears can dream about a collapse from these levels, but any selloff that holds above 1012 is properly regarded as a bullish correction. If you've got your fingers crossed anyway, hoping for a major trend failure, the logical place would be at the ABC midpoint shown (hypothetically) in the chart. More immediately, night owls can try bottom-fishing at 1069.00 with a 1068.25 stop-loss. That's a midpoint support associated with a 'D' target at 1065.50.  ______ UPDATE (10:34 a.m.): Bottom-fishing 1069.00 the first time it was hit worked out perfectly, since the futures rallied four points after dipping no lower than 1068.50.  Since we risked a theoretical 0.75 on the initial stop-loss, we needed only a 2.25-point rally to provide a rationale for exiting the trade or taking a partial profit.

We'll use a Hidden Pivot at 1077.25, the target of a minor pattern, as a minimum upside target. Stocks are trading above its sibling midpoint, 1067.00, Sunday evening, hinting of yet more strength to come over the near term.  Your stop-loss for a short would need to be wider than usual, at 1079.25, since there is a second target at 1078.25._______ UPDATE (12:06 p.m.)The futures slithered up to 1076.75, two ticks from our target, in the dead of night but have been unable to advance any further. ES has spent five hours pussyfooting  within inches of our number, and although the higher target is still valid in theory, it is too stale to enthuse over  as a place to get short.  Higher prices seem likely at this point because the pullback has been so shallow.  If you're looking for a camouflaged long entry, try 'X' following a pullback from 1076.50.  B-C-x could unfold in a hurry, but that's what would make the trade "safe". 

The futures didn't get much lift from news yesterday of a blip-let in same-store  sales, but neither did they suffer more than a mild swoon on whatever mild twinge of disappointment bulls may have felt.  On balance, there is reason to expect a buoyant performance as the week draws to a close, although bulls may have to defend themselves on the opening. As of around 9 p.m., after-hours price action was as flat as we've seen it in recent memory, with neither side tipping its hand. The 1076.50 rally target given here earlier remains viable.

A less-than-compelling pattern points to 1076.75, but it'll do for our pecuniary purposes. The target's midpoint sibling lies at 1059.75, and I can't help noticing that that's the precise high so far Wednesday evening.  If it's not just coincidence,  this would portend a rather precise pullback from the higher number. In any case, 1076.75 will become the minimum upside projection if and when the futures punch out the lights of the midpoint. Short 'D' at your complete discretion -- or even on a whim, if you dare.

The futures looked to be munching through trendline resistance with the aplomb of termites testing the edges of a weathered barn. If  They should pop the December contract above the 1075.75 high recorded two weeks ago, they'll probably be unstoppable below 1100.75, a Hidden Pivot that comes off the 240-minute chart reproduced alongside.

As of 10:15 p.m., the short-squeeze that produced yesterday's impulse leg on the hourly chart had barely even corrected, suggesting that bears could be in for a rough time today. Your warning to get out of  the way came when the futures exceeded 1034.75, a benchmark noted in Monday's touts. That said, the burden of proof will be on bulls nonetheless, since the long-term channel that produced last week's dramatic top is not exactly chopped liver.

A thrust above a minor, _____ peak made last Thursday on the way down is needed to get back in bullish gear, albeit a low one.  Failing that, there doesn't seem to be enough fear at the moment to produce follow-through selling the equal of the impulsive move we witnessed on Thursday. It may take a rally of one or two days' duration to set the hook so that bulls can be reeled in, gutted and filleted.

The Hidden Pivot support at 1025.75 given here yesterday worked well, since it caught the low of a 25-point decline within 1.25 points. Now that it has been exceeded, albeit only slightly so far, we should use a Fibonacci-based support at _____ as a minimum downside target. Alternatively, an upside thrust that surpasses _____ would hint of a bullish turn to end the week (and quarter).   

If the futures can close above a _____ midpoint resistance, they presumably would be bound for a minimum 1086.00, its 'D' sibling. They are showing surprising timidity, however, and so a downside target at 1025.75 must be given equal weighting. The midpoint support corresponding to that number is ____, so a close beneath it, or a decisive penetration intraday, would hint of more weakness to come. Actually, yesterday's low at 1041.50 was probably decisive enough to imply the futures are already bound for _____. That last number can be bottom-fished with a stop-loss as tight as two ticks, but don't do the trade unless there is enough time remaining in the session to exit it.