Here are two numbers to jot down if you’re interested in gold and the U.S. dollar: 75.47 and 72.93. Those are our current downside targets for the NYBOT Dollar Index, and we are quite confident that both will be reached in the fullness of time. The first lies just 1% below yesterday’s settlement price of 76.28; the second, 4.3% below it. Like you, we’ve heard many compelling arguments from dollar bulls and bears. Some think it is about to turn very strong, while others see a collapse. Our gut feeling is that the bulls will be right, » Read the full article
This tout will officially correct a downside target by a small amount, to 75.47.As noted in today’s commentary, I expect DXY to fall to that number and then to rally for a spell before plunging anew to 72.93. If the higher target is reached around the same time December Gold is hitting 1074, consider that a warning to lighten up on precious metals.
Late Wednesday night, the futures were playing toe-sies with a Hidden Pivot rally target at 9794 (see chart). The actual high so far is 9793, and it could go either way. Notice that I have used, not the one-off ‘A’ here, but the obvious one. That’s because I needed to project the highest target possible from the existing pattern. If it is exceeded, we’ll have to move up to the daily chart to find a rally pattern yet to play out. The most obvious one, going back to the March low, yields a bear rally objective of 10431.
Yesterday’s bullish forecast and target worked well enough for at least one subscriber, Phil D., to make money while he slept: “Bought three minis below 1010 with a stop below your C-point before going to bed, got up this morning and saw we’d bounced just a hair over 1022, so I sold 2 at 1018+. Not a bad return on sleeping. Given the low risk, it seems I should have bought more. Keep looking for that camouflage!” And so we shall, since the immediate forecast still calls for a rally to at least 1074. As of 10:51 p.m., a camouflage “alert” was in effect, since the abc retracement highlighted in the chart failed to reach its ”d’ target (or even its midpoint pivot). When this occurs, the first impulse leg headed in the opposite direction is the one we should look for to help us enter almost risklessly with the trend. So far, however, none of the minor rallies this evening have exceeded the required two peaks.
Google is too hot right now for us to play catch-up, but because we have a score to settle, we’ll be looking for any opportunity we can find to plunder the unwary. The stock appears bound for 553.87, opening up the possibility of our buying cheap vertical spreads near the 550 strike. The December spreads sell for a little more than three bucks, but we’ll want to pay no more than $1.50 or so. That will require legging into the spread, buy side first. Stay tuned, since the trade must be attempted when the stock is falling toward a Hidden Pivot retracement target.
A subscriber reported success yesterday legging into the 1340/50/60 August 16 call butterfly that I’d advised. He did so 32 times at no cost, as suggested, but it took a $10 move in the stock between legs to get filled so advantageously. His maximum profit would be $32,000 with the stock trading at 1350 come August 16. Since he owns the position without cost, no loss is possible, even if PCLN should all to zero or rally to $1000. We’ll do nothing further for now, but I’d suggest that those of you who were unsuccessful keep trying. We’ll shoot for a partial profit if the stock rallies $40-$50 in the next few weeks, but otherwise we’ll doing nothing further. I’ve reproduced a chart that shows why our expectation of a $120 rally from current levels, to a 1358.18 Hidden Pivot target, is not exactly farfetched. Toward that end, a pop above the 1270.59 midpoint pivot would be most encouraging.
I’m tracking a single contract short from 1982.50, based on the following post by me in the chat room at 1:45 p.m. EDT: “Aw, screw it. Just for the hell of it, let’s offer a single contract short at 1982.50, stop 1985.25, risking a theoretical $137.50 plus commissions. I’d hate myself if we actually missed a great short up here.” Actually, it looked like we had missed the short, since I’d suggested initiating it at a longstanding Hidden Pivot target at 1984.25 that was missed by three ticks when this vehicle topped for the day at 1983.50 in the first hour.
The futures subsequently crept back up to 1982.75 later in the session, and it was then that I advised getting short for the hell of it. We remained short at the bell, but anyone who did the trade is advised to monitor it overnight, and to use the 1985.25 stop-loss suggested. That implies that were are risking a theoretical 2.75 points to stay in the trade. If we use the fixed risk:reward of 1:3 that I always advise, we need a move our way of at least 8.25 points, to 1974.25, before we implement a trailing stop. (Had we initiated the trade with multiple contracts, we would take a partial profit there on half the position.) I may suggest an impulse leg-based stop-loss if ESU falls straightaway to 1974.25, so stay tuned to the chat room if you’re unclear on how to do this. It is my intention to come out of this trade with at least a small profit even if ESU blows higher, as is likely. That will be possible if we get the pullback to 1974.25, since a 1981.25 stop-loss would become automatic at that point, subject to the substitution of a trailing stop. Meanwhile, I’ve reproduced an hourly chart (see inset) that shows the sinewy perfection of the pattern we’ve used to get short just beneath its 1984.25 Hidden Pivot.
I haven’t tracked currencies that closely, but because they tend to move very precisely to Hidden Pivot targets, traders should consider exploiting them whenever possible. Notice how EUR/USD has broken beneath a midpoint Hidden Pivot at 1.34841 after noodling around near that pivot for a few hours on Thursday. This suggests that it is bound for D=1.34197, at least. You can bottom-fish there with a stop-loss as tight as 3-4 ticks. Notice as well that there are two slightly higher possibilities for point ‘A’. The correction targets they yield lie, respectively, at 1.34114 and, worst case, 1.33992. I expect these numbers to work very precisely, so use them in whatever way suits you best. Note as well that a last-gasp rally to p=1.34738 after EUR/USD has fallen a bit would be short-able.
The futures looked like they could go either way as Monday’s session drew to a close. However, the stall within 0.70 of the 1318.30 midpoint resistance I’d flagged implies that a decisive move past it would reach its D-target sibling at 1331.60. Alternatively, my worst-case target for the near term would be the 1278.20 Hidden Pivot support in the lower-right quadrant of the chart — or possibly even 1271.70 if any lower. The accuracy of this target would be affirmed by a bounce, possibly tradable, from within two or three ticks of the 1302.00 midpoint support. ________ UPDATE (9:57 a.m. EDT): Gold has bounced $14 this morning from a low just two ticks (0.20) from the 1302.00 midpoint pivot flagged above. Now, if the futures breach the support, we’ll know EXACTLY where they are headed. _______ UPDATE (July 23, 12:01 a.m.): Someone in the chat room said that because everyone seems to be bearish on gold right now, perhaps we should take the other side of the bet. I’m a bit bearish myself, and thus this response: “Rather than take chances and let gold disappoint us for the zillionth time, we should simply stipulate that the August contract close above 1318.90 before we get excited. That’s the midpoint resistance, on the 180-minute chart, of a=1292.60 on 7/15; b= 1325.90 on 7/27; and c=13-02.20 on 7/22. At that point, I’d lay even odds of a move to at least 1335.50; above 1337.00, the futures would be a good bet to hit 1381.40. Whatever happens, bulls will have to prove their case. _______ UPDATE (July 24, 1:20 a.m.): Sellers paused for a relatively blissful nine hours yesterday just inches above the 1302.00 ‘hidden’ support I’d flagged, presumably to sniff the flowers before going back on the attack.
Netflix’s so-far $37 selloff has followed a peak last week at 475.87 that slightly overshot a Hidden Pivot at 474.50 I’d characterized as ‘a big-picture target where an important top is even more likely.’ A chat-roomer who evidently took this prediction to heart reported buying puts last Thursday for 1.24 that he cashed out for 8.90 yesterday. This could be just the start of NFLX’s comeuppance for all those who inflated this gas-bag to undeserved heights. If you took a position and are still holding it, please let me know in the chat room and I will update guidance. For now, though, let me suggest that you take profits on half of any short position entered near the recent top. _______ UPDATE (July 10, 10:23 p.m.): Bears failed to achieve a Hidden Pivot target yesterday, presumably because DaBoyz shook the stock down so hard on the opening bar that it exhausted sellers prematurely. The missed target suggests that traders will enjoy decent odds bottom-fishing the midpoint pivot shown at 433.62 (see inset, a new chart) with a stop-loss as tight as 8 cents. If it’s hit, expect the selling to continue down to at least 423.05, a Hidden Pivot that can be bottom-fished with as tight a stop-loss as you can abide. _______ UPDATE (July 14, 11:07 p.m. EDT): A turn from 428.20, precisely between the two pivots flagged above, left our bid high and dry. The bull leg that has followed could be the start of a rally cycle with the potential to reach 486.86. First, though, let’s see whether buyers can tackle a midpoint pivot at 457.53 that is associated with the target. _______ UPDATE (July 16 at 6:47 p.m.): Let’s not overlook the downside — specifically, the 433.69 midpoint pivot and its D sibling at 411.67. Bears can short the break for a move to either, and both can be bottom-fished with the tight stop-loss you can abide. ______ UPDATE (July 22, 12:15 a.m.): The stock turned higher from $2 above the midpoint support, implying that bulls are about to dominate once again. Call prices are on the moon, however — way too expensive for a straight directional bet. Instead, I’ll suggest buying the August 2 – July 25 calendar spread eight times for 1.50, day order, contingent on the stock trading 451.00 or higher. Please report any fills in the chat room. _______ UPDATE (July 22, 12:05 p.m.): With today’s huge air pocket, the stock obviously remains in the grip of DaBoyz. My assumption will always be that steep declines in NFLX are brazen shakeouts, engineered by strong hands to steal stock at fire-sale prices from weak hands. In this instance, the downdraft appears likely to hit 413.00 before DaBoyz run it up again. If and when that number is hit, you can bottom-fish there with the tightest stop-loss imaginable. (Note: I’ve revised the target downward by 0.96 since the original update. Also 435.25 is the midpoint pivot and therefore worth a tightly stopped short on a rally to it.)
Yesterday’s high fell a nickel shy of an 11.93 target that leaps to the eye from the hourly chart. If UNG should exceed that number on a closing basis, however, expect buyers to take it higher, to at least 12.45.