ESZ11

Are the futures finally fixing to drop out of the tedious distribution pattern that has been under construction for the last six weeks?   If so, they'll fall all the way to  1088.75 before bears have a chance to reverse the tide. That is a Hidden Pivot midpoint associated with the very bearish target at 954.00 drum-rolled here earlier.  A plunge to the lower number seems like a lock-up to me at this point, although we must always allow for the seemingly impossible to occur. In this case, that would mean an unpaused upthrust exceeding 1258.00, an external peak recorded in early August when the futures  were in a free fall.  Most immediately, I'd suggest avoiding this vehicle, since its preternaturally tight price range tonight suggests it is being tightly controlled by the usual bunch of arse bandits.  Want to learn how to nail swing highs and lows precisely, and to manage trade risk yourself? Click here for information about the upcoming Hidden Pivot Webinar on October 5-6 and a $50 discount.

Night owls looking for a low-risk trade might be reduced to playing the right-hand margin of the 15-minute charrrrrrrrrrrt (see inset) if they are ready to jump on the futures when this tout is published momentarily. The impulse leg is subtle and perforce legitimate, but it will be gone if the rally exceeds 1999.50.  Your best bet five minutes ago was to buy the 'd' target of the pattern, but as 'c' has migrated higher, the odds have changed.  The bigger picture unfortunately is not worth examining.

Now in its sixth week, this excruciating distribution of stocks in a very probable bear market could induce seasickness in anyone tracking it too closely.  Moreover, although the ups and downs seem slavishly mindful of Hidden Pivot supports and resistances, price action seems to be getting increasingly difficult to leverage with the usual camouflage tactics. We can deal with this by simply looking for subtler price reversals, but we shouldn't expect to catch the next big-but-fleeting leg down in the Mother of All Bear Markets. For the moment, catching anything will require diligent attention to the lowly one-minute chart, on which a potentially shortable pattern (or perhaps a minor swing point worth bottom-fishing) is developing as I write these words.

A previously noted Hidden Pivot resistance at 1224.00 is still my minimum upside target for the near term.  Please note, however, that it would come in the context of the "dueling impulse legs" shown in the accompanying, daily chart.  We should infer from this ambivalent price action that the bounce begun on August 9 from 1072.00 is not destined for greatness; rather, it is most likely a bull trap -- one, perforce, with enough power, persistence and...nastiness to have shaken most shorts loose by now.  If they are to get serious relief and have things go their way once again, it would be signaled by a downdraft today hitting 1182.25.  That would create a strong bearish impulse leg on the hourly chart by exceeding a low that marked a tradable bottom last week.  _______ UPDATE (12:14 a.m. EDT): After opening down 12.50 points Sunday night, the futures have drifted lower, to 1191.25.  They will need to fall a further 1.75 points to hit a Hidden Pivot midpoint at 1189.50 associated with the pattern: (5-minute chart) a=1212.75 on Friday's closing bar; b=1194.50 on Sunday at 6:25 p.m., and c=1198.50.  If the support is crushed, however, the next place where buyers might find traction lies at 1180.50, its 'd' sibling.  Either of those numbers can be bottom-fished with a stop-loss as tight as you can abide, but if the first is exceeded by more than a point or so, the second would become an odds-on bet. _______ UPDATE (11:54 a.m. EDT):  Last night's kamikaze dive stopped at 1181.50, a single point from my Hidden Pivot "deck". Most interestingly, even on the one-minute chart, at least two potential camouflage trades turned into bull traps by stopping out their respective point 'C's.

A Hidden Pivot resistance at 1224.00 flagged here yesterday is our minimum upside target now that the futures have shredded its sibling midpoint, 1199.75.  Night owls should pay heed to the developing, bullish pattern shown in the chart, since a dip followed by a rally to its still-undetermined 'X' entry price could create a camouflage buying opportunity.

If our perspective is the 240-minute chart, yesterday's rally was a yawner. Even so, we'll need to respect the impulsiveness of it, along with the prospect of a 'c-d' follow-through.  The correction has already qualified as a legitimate 'b-c' leg, having fallen below the 1182.50 "window" line. Now, it would take a rally touching 1187.00 to trip a theoretical entry signal. Since 10 points (i.e., $500) of entry risk is about ten times what we will accept on any trade, a long entry will necessarily entail camouflage.  Accordingly, you should zoom down to the 15-minute chart or lower to find your 'x' entry spot if and when the futures approach 1187.00.  Please note that that number -- though not necessarily the bull trade -- would be invalidated if there's a dip below 1176.75 overnight. _______ UPDATE (12:48 a.m. EDT):  A camouflage entry at 1188.00 was possible around 5:45 a.m. and although the position was a "success," reaching its 1188.75 midpoint, you'd have needed to reboard after getting stopped out to catch the maniacal, short-squeeze leap to  1199.75 on the opening.  That, by the way, is the exact Hidden Pivot Midpoint of a 1224.00 target that comes from the same pattern that I've displayed (point 'C' was ultimately to equal 1175.75), so any progress above it would ordain more upside of 24 points.

A frustrating day for bears ended with the promise of yet another on Wednesday. Notice in the chart how the intraday high slightly exceeded the look-to-the-left peak at 1169.50.  The move is therefore impulsively bullish and it could conceivably yield an opportune long entry for night owls.  If you're game, I'll suggest looking for your spot at the right-hand edge of the 15-minute chart, where the most recent impulse leg,  with a 'D' target at 1174.75, began from 1154.25 at 12:15 p.m.  _______ UPDATE (2:11 a.m. EDT):  The futures are getting hit tonight and are down 15 points at the moment.  Bears shouldn't get their hopes too high, however, since the modus operandi of nighttime traders is to exhaust sellers on ostensibly "bad" news in order to run the index futures higher on zero volume ahead of the opening. Want to learn how to nail swing highs and lows precisely, and to manage trade risk yourself? Click here for information about the upcoming Hidden Pivot Webinar on October 5-6 and a $50 discount

The maniacal bounce in the final hour from yesterday's lows is robustly impulsive on the hourly chart, warning shorts not to get too complacent, even if you entered well above these levels.  For trading purposes I'll suggest using a camouflage buy-stop at the conventional entry spot shown hypothetically in the chart. (In that regard, please note that it will take a relatively hefty pullback to bring this vehicle into the retracement window.)  Finally, I'll mention that the very bearish target given here earlier at 954.00 is still valid -- not to mention, a good reason to try and lay out some shorts near its midpoint sibling, 1088.75.  That is logically a good minimum upside target for this short squeeze.

Open up some space in the lower half of the daily chart and you can see how a fall to at least 1088.75, the midpoint support of the pattern show, has become visually unavoidable.  It's tied to a 'D' target at 954.00, so, presumably, there will be a long way to fall if and when the midpoint has been exceeded to the downside on a closing basis for two consecutive days.  As of around 1:30 a.m. EDT, camouflage opportunities to get short were hard to find, since the downtrend was so well developed. A minor cycle on the 15-minute chart had surpassed an 1139.25 midpoint support, presumably bound for its 'D' sibling at 1133.75.