It's been three weeks since April Gold generated a bullish impulse leg on the hourly chart, but it could happen as early as Sunday night if there's follow-through to Friday's upswing. That would exceed the 1603.00 'external' peak shown in the chart, refreshing the energy of buyers. It would also put p=1616.50 of this pattern in play as a minimum upside objective over the near term. As always, an easy move through a midpoint pivot would puts its associative 'D' target in play -- in this case 1690.20. We can trade the various Hidden Pivot levels long or short as opportunities arise, so stay tuned to the chat room if you're interested. Incidentally, there is an alternative point 'A' low $2.80 above the one I've used, but we may have to wait until the futures hit the respective p midpoint of each before we choose which 'D target to use. _____ UPDATE (Feb 3, 9:37 p.m. EST): Gold's head-fake Sunday night was short-lived, falling $4.60 shy of the 1603.00 benchmark identified above. The subsequent selloff, all too typical for gold, occurred when index futures took flight, propelled by panicky short-covering. I have nothing new to offer, but the 1616.50 target can still be used as a minimum upside objective. _______ UPDATE (Feb 4, 9:07 a.m.): Gold is getting pulped today, as usual, because the stock market is in the grip of an insane rally. The 1616.50 rally target will remain viable IN THEORY until such time as C=1542.80 is penetrated to the downside. This will come as scant consolation to gold bulls, but it is what the charts say. Worst case, short term: 1540.90 (60-min, a=1603.00 on 1/8 at 1:00 a.m.) _______ UPDATE (Feb 4, 9:47 p.m.): The futures have tripped a minor rABC buy signal of modest appeal at
I'm tracking a long position consisting of 400 shares purchased last week for 28.39 when this vehicle dove to 28.23. Ordinarily I would suggest taking half off at the red line, 29.09, but because so many subscribers took the trade, and to demonstrate how well these 'mechanical' set-ups work to those who hadn't tried one, I'm being a little greedy this time. Accordingly, I'll recommend that you continue to offer 200 shares (or half of the original position) at 29.42. We'll look to exit another 25% if and when GDX achieves the 30.50 target. _______ UPDATE (Feb 4, 9:14 a.m. EST): Gold is getting hit hard ahead of the opening because stocks are once again in the grip of short-squeeze madness. The GDX position will produce a theoretical loss of $288 on four round lots if it is stopped out. I am recommending sticking with it because that is what disciplined trading requires. ________ UPDATE (Feb 4, 9:53 p.m.): The position hung on by a thread today when GDX swooned to 27.77, a dime above our stop-loss. _______ UPDATE (Feb 6, 8:44 p.m.): Were stuck with the position because...well, because we are. Continue to offer half of it at 29.42, with an o-c-o stop-loss at 27.67.
I've gotten a couple of congratulatory emails from Trader Mike congratulating me for nailing THE top in Apple, but I'm not so sure myself. Whatever the case, he's had an opportunity to leg into a June 250-245 put spread 20 times for a $30 credit. That means the worst he can do is make $600 on the position even if the stock rallies to the moon, but as much as $10,000 if it tanks. He credits me for getting him aboard with perfect timing, but my timing was actually a tad imperfect, since the stock went against him -- and my target -- by a few points before it turned south with a vengeance. The fact that he still holds a position is attributable as much to his guts as to my more or less accurate forecast. Subscribers who followed Mike in could have done the same spread for as much as a $1.15 credit, since the long side of the position, the June 250 puts, traded as low as 1.87 after he was aboard. If any of you did the trade, please let me know in the chat room and I'll beef up my guidance. Regarding AAPL's next move, here's a chart that shows a plausible path down to as low as 299.54. over the next day or two. Trade it at your discretion. ______ UPDATE (Feb 3, 9:45 p.m. EST): The dirtballs tipped their (bullish) hand Monday when they took AAPL down to 302.22 on the opening bar even as the broad averages roared higher. This will have been the easiest money they've made in a while, but it has left a trail of death and dismemberment on the hourly chart that may take a couple of days to smooth over. Don't be surprised in the meantime if
Amazon has taken flight, up $230 at the moment, or a little more than 12%, following earnings announced moments after the close beat analysts' expectations. The stock looks bound for 2342.79, the Hidden Pivot target in the chart above. You have to wonder who the geniuses are who get paid to do the expecting, since their estimates so often fall a few crucial pennies shy of whatever numbers are released. Do these Wall Street shills perhaps receive bonuses for lowballing their dartboard predictions? This would make sense, since estimates that can be easily beaten have potentially lucrative implications for insiders. Short-Covering Fools If analysts are merely dumb, even dumber are traders who bet against after-hours eruptions that have become the hallmark of this bull market. Ironically, short-covering fools are the only source of buying power strong enough to goose stocks past heavy layers of supply and prior peaks. The more bets the fools pile up against the aging bull, the more spectacular the stock market's leaps. Just look at Tesla. The biggest winners, of course, are those who hold millions of shares in the small handful of companies worshipped by portfolio managers. The net worth of these zillionaires grows in mere minutes by sums that took a lifetime for robber barons like Carnegie, Astor, Rockefeller and Morgan to accumulate. Rather than treat himself to a good Cuban cigar, Bezos could buy, oh, New Zealand, or Ted Turner, the Sioux Nation or the Rockettes, to celebrate.
April Gold's wild gyrations came within an inch of triggering mechanical buy signals twice today at the green line shown in the chart. The trouble is, there was a $10 rally separating them, and the first pop should easily have reached the 'D' target at 1600.50. Instead, after the futures topped $10 shy of it, bulls had to endure a mini-crash at day's end when bullion quotes reflexively dove on a late-afternoon short-squeeze in the broad averages. If the weakness carries into Friday, the futures would become a moderately enticing buy at 1564.60, the midpoint Hidden Pivot support of a pattern on the 30-minute chart that began on January 8 from 1603.00. To cut the entry risk down to less than $1 theoretical, I'd suggesting using an rABC pattern where a=1581.60 at 9:00 a.m. on 1/30.
A stock-market rally fizzled for a rare change, possibly because AAPL's after-hours leap Tuesday on strong earnings wasn't quite strong enough to knock the crowd's socks off. It was impressive, to be sure -- a 19-point jump amounting to about 6%. But this evidently wasn't quite powerful enough to be regarded as freakish. Tesla demonstrated what freakish is all about after the close, ripping shorts' testicles off with an 84-point thrust to a so-far high of 659.95. This was somewhat above the ambitious, $639 rally target I sent out to subscribers on Jan 14, when the stock was trading more than $100 lower. The rally is unlikely to have a discernible impact on the the broad averages as the week draws to a close, however, because TSLA, unlike AAPL, is not regarded as a respectable stock that moves higher to discount future earnings, but rather as a rabid badger impelled by one of the most vicious short squeezes in history. TSLA reported 'strong' Q4 earnings after the close, and the imbeciles who were short ahead of this news richly deserved what they got. So will the analyst who ostentatiously predicted TSLA will hit $6000 a share, but that will be another story for another day. For what it's worth, the company would have lost $28 million in Q4 if not for regulatory credits, according to Wolf Street editor Wolf Richter.
A killer virus on the prowl around the planet evidently was not on investors' tiny, fevered brains Tuesday as they reminded us yet again that betting heavily on a rally when stocks have been down for two straight days is nearly always a winner. The S&Ps rose an impressive 32 points, with a corresponding gain in the Dow Industrials to 28,722 that has made 30,000 an odds-on bet. The leap that Apple shares took when record earnings were announced after the close is likely to have a bullish impact on the shares of Microsoft , Facebook, Amazon and Boeing when the respective companies announce earnings between now and Friday.
Shorts were on the ropes the whole day and getting no relief Tuesday evening. The rally during the regular session tripped a theoretical 'buy' signal at the green line (3272.25) that portends more upside to at least p=3311.25. I'll recommend shorting there, presumably with an rABC pattern on a lesser chart, but only if you've caught a profitable piece of the action on the way up. As always, an easy move through the midpoint resistance would shorten the odds of more upside to D -- in this case, 3389.50. That would be quite a rally, equivalent to about 1000 points in the Dow Industrials. They'd be trading just below 30,000 at that point, presumably drawn as if magnetized toward a historical milestone. _______ UPDATE (Jan 29, 9:14 p.m.): Bulls couldn't get it going for a rare change, a failure that has opened a path down to p=3240.88 (click here to see chart). Traders can try bottom-fishing there rABC-style, with a suggested point 'A' at 3270.25 (1/29 at 10/20 a.m.). An easy breach of this Hidden Pivot support would portend more downside to as low as D=3189.00. ______ UPDATE (Jan 20, 8:43 a.m.): The 3240.88 target given above nailed the low of a 31-point dive overnight within a point, allowing subscribers to make hay -- as much as $900 per contract -- on the subsequent 18-point bounce. And so they evidently did, based on reports this morning from several happy campers in the chat room. Here's a chart that shows the futures bouncing precisely from the targeted low. ______ UPDATE (Jan 30, 4:29 p.m.): The bounce continued from the tradeable low identified above, attracting ferocious short-covering in the final hour. This left bears on the ropes and bleeding badly. Their panic seems all but certain to drive the futures to at
AAPL shot higher on record revenues reported after the close, and although the move wasn't quite strong enough to be described as freakish, it did put an ambitious, 337.22 target in play. It could also set the stock up for a 'mechanical' buy if AAPL should pull back to the green line at 313.72 without first having exceeded the so-far high at 327.90. Buyers' failure to hit the target in the moments following the news may have been due to the strong rally that had already occurred during the regular session. AAPL was up around $9 at one point, pushed by buyers who evidently were confident not only about the impending good news, but in the stock's likely reaction to it. This is bound to have a bullish effect on some other corporate giants yet to report this week, including Microsoft, Amazon, Facebook and Boeing. DaBoyz, it would appear, are fully in command once again, inured to any coronavirus news that falls short of catastrophic. _______ UPDATE (Jan 29, 9:23 p.m. EST): If bulls are still in charge, a 'mechanical' bid at 321.56, stop 316.34, should produce a winning trade that hits the 337.22 target shown in the chart. I am not recommending the trade because it is riskier than the mechanical buy at 313.72 noted above, but we can watch from the sidelines nonetheless for signs of weakness (or strength). _______ UPDATE (Jan 30, 3:16 p.m.): For the record. the 'risky' trade proffered above showed a theoretical profit of as much as $1100 on the opening bar. Looking ahead, although I am not in love with the stock at the moment -- not that I ever was -- it would trigger a 'mechanical' buy of larger degree at 313.54, stop 305.88 (see the original chart). The objective would be 336.47
Buyers hung tough on Monday because DaBoyz were able to exhaust sellers ahead of the opening bell. They won't be able to rig the game this way on Tuesday, however, since the 'coronavirus effect' -- on stocks, not humans -- is already well in play. Rumors continue to swirl concerning the death toll in China, but it would take a very large pile of bodies to slow Wall Street's buying orgy for more than two days. Investable funds are effectively unlimited, implying they will continue to exert irresistible, upward force on stocks. Coronavirus, on the other hand, is hardly an immovable object -- just a scary news story that continues to mutate but will lose force with nut-so investors if dead bodies fail to pile up to the sky. Absent that pile of bodies, however, and for the time being, bulls would seem to hold the edge. That could change following Tuesday's market close, however, with the release of Apple's earnings. The reaction should give us a good read on the robustness and vigor of the bull market, setting the tone for earnings announcements later this week from the biggies: Boeing, Facebook, Microsoft and Amazon.
