Buyers Probe Major 'Hidden Pivot' Resistance

December 14, 2016

The March contract on Tuesday exceeded a long-term target at 2270.00 by three points, a seemingly modest feat that could have very bullish implications going forward. Although the small overshoot was not sufficient for us to regard the 2270.00 Hidden Pivot resistance as conquered, the slight breakout should be regarded as a shot across the bow of bears who might be looking to get short at these levels or to hang onto existing short positions.  They could breathe a little easier if the day’s record high at 2273.00 endures and the futures fall beneath 2259.50 on Wednesday. But if buyers instead push this vehicle still higher and close it above 2270.00, that would be warning shorts to dive for cover.

There is a corresponding target at 2299.00 for the December contract, in which we hold a single-contract tracking position that is showing a theoretical gain of about $8000 after adjusting for partial profits taken on the way up.  But even if the December futures stall and reverse from 2299.00, the March contract would at that time be trading a decisive 25 points above its 2270.00 target. This would have quite bullish implications into year’s end, at least. Traders should use the pattern shown to exploit any further strength Tuesday night or Wednesday. It shows a minor rally target at 2283.75 that can be exploited with a ‘mechanical’ entry at either the red or green line. If you’re unsure about how this tactic works, stay tuned to the chat room, since quite a few subscribers have been actively trading the E-Minis. As always, an easy push past clear Hidden Pivot resistance should be taken as a sign that the trend will continue at least to the next — in this case to at least 2309.50 (30-minute chart, A= 2075.25 on 11/9; B= 2208.25 on 11/30; and C= 2174.25 on 12/4).  That number too has the potential to mark an important top, but bears shouldn’t count on it too heavily, given that the bull market has been chugging along since 2009. If you do plan on shorting there, I’d suggest cushioning the stop-loss with profits made by being long on the way to it.

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