Putting aside the two targets in the stratosphere that I flagged here yesterday, there’s a minor corrective one at 1052.25 that you could use for bottom-fishing with a stop-loss as tight as two ticks. Please note that it would take a print today at 1047.50 to turn the hourly chat bearish. ______ UPDATE(1061.25): The stop-loss would need to have been at least four ticks, since the actual low occurred at 1051.50. The subsequent bounce points to 1068.25, subject to midpoint resistance at 1063.00, but neither number looks like it will be worth much for trading purposes. _______ FURTHER UPDATE (10:16 a.m.): The futures have topped so far this morning at 1069.00, suggesting the 1068.25 pivot flagged above was not so useless as I had imagined.
The futures have the potential to hit 122^08 on the next thrust – a target that has been corroborated by the stall within two ticks of its sibling midpoint 120^11. The best way to board would be to use a camouflage ‘B’ that is recorded somewhere between 120^14 and 102^16. The opportunity will be potentially available as long as the ‘C’ low at 118^13 is not violated. Since it could come and go quickly, you’ll need to be ready, so I’d suggest setting a chart alert at 120^15.
The futures failed to reach a targeted pullback low at 993.00 yesterday, suggesting that the bounce off the actual low at 996.30 is likely to reach its ‘D’ target, 1012.10. The futures appeared to be corroborating this scenario Monday night by pushing above the uptrend’s midpoint pivot. _______ UPDATE (10:20 a.m.): The futures blew past 1012.10 on the first hourly bar where they encountered the resistance, implying more upside over the near term to at least the next Hidden Pivot target, 1029.10. Its sibling midpoint at 1012.70 is a logical place for a consolidation to bottom, so buyers should take note if a pullback comes down that far.
The midpoint pivot at 101.28 that I’d flagged yesterday in the chat room as a place to try bottom-fishing appears to have served subscribers well. Several subscribers have reported getting long at that price ahead of the so-far 88-cent rally that has ensued. This morning’s low never exceeded the pivot by more than eight cents, and the rally since could have produced a gain of as much as $800 per contract for anyone who was aboard. Because of the fills that were reported, I’m going to establish a tracking position for your further guidance. Assuming four contracts were entered initially, you should take partial profits on half now if you haven’t done so already. For tracking purposes, I’ll assume an exit at 101.80, a dime below where the futures are currently trading.
I’ll further suggest using an impulse leg-based stop on the 30-minute chart. This implies that a swoon now to 101.19 would take one out of the position. The stop-out price will rise to 101.45 if the current bar’s low, 101.72, becomes a point C low (where A=101.46 at 9:00 a.m. ET). _______ UPDATE (10:40 a.m. ET): A very nasty downdraft has erased most of the rally in a single bar on the 30-minute chart. Stick to the 101.19 stop for now, but use a breakeven stop if you held only one contract.
The leaps have been opportunistic, powered by short-covering whenever the mood is right. Most of the time these days, however, the futures are taking mincing steps in both directions, creating a challenging environment for profit-seekers in the middle hours of the day. One thing to notice, however, is that the rallies, particularly in this vehicle, and whether weak or powerful, seldom proceed from the first signaled entry point. Instead, the ‘money trades’ launch from a second or third point-C lows of ABCD patterns, and they do it with such repetitious reliability that one can practically discard the first signaled entry opportunities routinely. This is the kind of price action we might expect when ‘everyone’ thinks that stocks will move higher on a given day. ‘Everyone’ can be right, but that doesn’t necessarily mean they can make money easily. For your interest today, I am including a chart that shows a modest rally target at 1895.00. I’m guessing it will be easier to get short there with a tight stop than to get long for the ride to it. However, because the futures will be in record territory at that point, we shouldn’t want to impede their progress too aggressively.
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Since March 20, when GDXJ was trading for around $40, I have been looking for a potentially important low at 34.00. More recently, I revised that target to exactly 33.76, a ‘Hidden Pivot support’. Yesterday it came within a single penny of nailing the exact low of a vicious swoon. The low may or may not prove to be the last gasp of a correction that has been in progress for the last five weeks, but it stood to be an opportune place to try bottom-fishing. In that regard, quite a few subscribers reported getting aboard at or near the low, and so I’ve established a tracking position for their further guidance. It consists of 200 shares with a cost basis of 33.58. The price takes into account an initial purchase of 400 shares for 33.79, then the taking of a partial profit on half the position at 34.00. The bounce so far has hit 34.90, meaning GDXJ has trampolined $1.14 cents since hitting my three-week-old target. For now, traders should stop themselves out of the position if GDXJ breaches two prior lows on the 5-minute chart without an upward correction. As of this moment, that would imply placing the stop at 34.37 (and remember: it must be exceeded by an unbroken, downtrending leg). You should also offer a round lot (or half of the remaining position, whichever is greater) to close for 36.80, good-till-canceled. _______ UPDATE (11:38 p.m. ET): The herky-jerky spasms in the first 90 minutes altered our stop-loss so that it would have taken a 34.07 print to stop us out — 23 cents beneath the actual low. I’ll now suggest raising the bar by using an impulse leg-based stop-loss on the 30-minute chart. That would imply a fall today touching 34.29. Please note, however, that the stop could change if zig-zag action early in the session creates any distinctive new lows on the intraday charts. Our target for the next profit-taking interval is still 36.80. _______ UPDATE (April 23, 1:38 p.m. ET): A powerful surge today has hit a so-far high of 36.89, allowing anyone who was long to take a partial profit at 36.80, as suggested. For tracking purposes, I’ll assume 100 shares with a profit-adjusted cost basis of 30.36. In practice, you should still be holding 25% of whatever position you acquired initially, with a 30.36 cost basis. For now, use no stop-loss.
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We don’t pay much attention to this vehicle other than at key turning points, but the short-term pattern shown looks like a lay-up for traders who see futures contracts as no more than bouncing dots on a chart, waiting to be exploited. There are actually two trade possibilities here: 1) a ‘camouflage’ short as USM slips below the 132^13 midpoint; 2) and a very tightly stopped long from within a tick or two of the 131^17 target. Good luck! Please report any fills in the chat room so that I can establish a tracking position for your further guidance. ______ UPDATE (3:17 p.m. ET): The short was tricky to initiate, but once aboard, your reward came quickly with a drop to a so-far low at 131^26. As noted above, the short should be covered and reversed near 131^17. ______ UPDATE (April 6, 3:57 p.m.): The low of Friday’s violent price swings was 131^21 — not quite close enough to have gotten you long easily. Although this could prove to be an important low for the short- to intermediate term, under the circumstances I’ll assume no subscribers were filled. _______ UPDATE (April 11, 1:03 a.m.): Next important stop on the way higher: 135^17. _______ UPDATE (April 20, 11:10 p.m. ET): Last week’s fleeting stab to 135^10 came within less than a quarter-point of my target — close enough for us to consider it fulfilled. It took the futures more than a month to get there, so we should expect this correction-or-worse to last for at least a week or so before bulls attempt to push T-Bonds to new recovery highs.
The Dollar Index is giving off mixed signals, consolidating just below a midpoint pivot after creating a strongly bullish impulse leg yesterday on the hourly chart. If the retracement goes lower than the ‘d’ target at 76.33, the whole bullish enterprise would become suspect, notwithstanding the dog-and-pony show slated in Pittsburgh this week.
This Just In... for Tuesday
In the chat room, I’ve posted a note concerning an over-the-counter mining stock of interest. You can find the note at 16.22 hours.
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