We'd been focused on a Hidden Pivot at 99.05 as a target for this phase of the dollar's long-term bull market, but when DXY sold off sharply without having reached it, I took a closer look at the daily chart. The slightly altered pattern yields a new target at 98.93 that turns out to have caught the exact top of last week's rally. The pullback so far has been moderate and has not diminished my bullish bias for the long-term. But given the decisive precision of the recent top, it would appear that bulls are spent for the time being. _______ UPDATE (Sep 23, 6:15 p.m.): Here's a chart with a new target at 99.94 that is starting to look better than the one given above. Use it with confidence, but don't expect the dollar to get there any time soon. A pullback to 97.76 would trigger a 'mechanical' buy signal. _____ UPDATE (Oct 20, 2:33 p.m.): The dollar's steep slide this month has caused whack-a-mole bears to surface in droves, but here's a chart to remind us that the dollar is still in a bull market and that it will become a buy at some point. At the moment, the rABC pattern shown implies the signal to do so would trigger at 97.49 provided the C low at 97.14 has not been breached.
I proffered a quite bullish target at 21,032 five weeks ago, but bitcoin seems in no hurry to get there. In fact, this CME vehicle, which reflects the best bid and offer in real time across many markets, tripped a 'mechanical' short at 10,081 on last week's run-up to 10,667. We passed up the trade as unappetizing, but if it gets stopped out at 10,795 as seem likely, that would imply the uptrend's three-week stall has ended. The weekly chart still says that a pullback to 7609 would offer an excellent, albeit increasingly unlikely, buying opportunity. More immediately, assuming the stop on the theoretical short is hit, BRTI should be presumed bound for at least 12,260, a midpoint resistance tracing back to the start of the bull cycle begun on June 9. _______ UPDATE (Aug 6, 10:00 p.m. ET): BRTI plunged $1103 today after topping an inch from the 12260 target. Are there any bitcoin traders out there who are paying attention to these targets? _______ UPDATE (August 11, 2:10 p.m.): Bitcoin has held its own after buyers were repelled by the 12,260 pivot shown in this chart. The rally did not make it to our sweet spot, but because the push was so robust, I'll recommend a 'mechanical' buy on a retracement to x=10,675, stopped just below C=9090. _______ UPDATE (Aug 14, 9:56 p.m.): The trade triggered and feels scary as hell at the moment. That is the way good mechanical trades are supposed to feel, since our bid is placed at a level where most bulls have already been brutally shaken out by a steep selloff. This is just such a set-up, but we'll hang with it nevertheless just to see how it goes. Bitcoin's reputation for being able to flout the concerns of the real word is
Going sharply against a bearish consensus, Rick's Picks has been enthusiastic about Treasury paper since late 2018. Going back a year or more, few except hardcore deflationists saw yields on the Ten-Year Note crashing 2%, especially with GDP hitting 3%. Today's powerful rally pushed them down to 1.87%, precisely matching the forecast sent out to subscribers on July 2, a month ago. So what next? If rates don't turn from right here, expect them to continue down to at least 1.81% over the near term. That is equal to a 'midpoint Hidden Pivot' support shown as a red line in the chart. A bounce from that number should be presumed not only likely but tradeable. However, if $TNX were to close below 1.81% for two consecutive weeks, or trade more than 50 basis points below it at any time, a 1.47% target would be in play. _______ UPDATE (Aug 15, 9:26 p.m. ET): Yields have rebounded after bottoming 0.02 points below the 1.47% target we've used for weeks as a minimum downside objective. It has taken TNX four months to get there, so the bounce should take at least a week or two to play out, assuming it's just a bounce. However, if this vehicle relapses and heads lower within the next few days, breaching the low, that would imply rates are headed significantly lower.
Going sharply against a bearish consensus, Rick's Picks has been enthusiastic about Treasury paper since late 2018. Going back a year or more, few except hardcore deflationists saw yields on the Ten-Year Note crashing 2%, especially with GDP hitting 3%. Today's powerful rally pushed them down to 1.87%, precisely matching the forecast sent out to subscribers on July 2, a month ago. So what next? If rates don't turn from right here, expect them to continue down to at least 1.81% over the near term. That is equal to a 'midpoint Hidden Pivot' support shown as a red line in the chart. A bounce from that number should be presumed not only likely but tradeable. However, if $TNX were to close below 1.81% for two consecutive weeks, or trade more than 50 basis points below it at any time, a 1.47% target would be in play.
The 'mechanical' set-up I detailed here last night caught this morning's trampoline bounce two pennies off the low. The subsequent rally was a doozy, adding 7.4% to the value of GDX shares in just a few hours. Subscribers who bought call options as advised saw them at least double in value, and in one reported instance quintuple. It depended on which strike and expiration date you used, but the gains would have been impressive regardless. I posted my own bet in the chat room shortly before the trade filled: bid 0.26 for 6th Sep 29 calls. I subsequently closed out 25% of the position when the options doubled in price, then offered 6th Sep 31 calls short for 0.27 to create a riskless $2 vertical spread. If I am filled on the order, I'll have a chance to make $200 per spread with no loss possible. I am not establishing a tracking position because all who took advantage of this opportunity are solidly in-the-black and presumably capable of managing your own positions. I will, however, continue to post any adjustments I make to my own position. _______ UPDATE (Aug 2, 11:06 a.m. ET): My order to short GDX 6th Sep 31 calls @ 0.26 has filled, making me long the Sep 29/31 vertical call spread at a cost of zero. If GDX rallies a mere 10.7% over the next month, I stand to make as much as $200/spread (which I have done in size). No loss is possible. Since each spread makes me long the equivalent of 20 shares, I may scalp against it. It is a positive-gamma spread, or backspread, meaning I will get somewhat longer if GDX rises. _______ UPDATE (Aug 6, 10:21 p.m.): I plan to add 6th Sep 30 calls to my long position if GDX
On July 9, we ran a chart from our friend Peter Eliades of Stockmarket Cycles that showed the New York Composite Index head-butting a trendline whose provenance traces back to the 2009 start of the bull market. With the selloff of the last two days, the trendline appears to have racked up yet another prescient call (see graph above). Three separate attempts in July to get past it failed, and the resulting top is looking more important with each new wave of selling. If you count the number of times the trendline "worked" since last August, there were no fewer than five instances where it provided support, and then five since October where it acted as resistance. This is quite impressive and would become even moreso if the weakness we've seen this week starts to snowball. Put Options Doubled Peter's trendline resistance closely coincided with a Hidden Pivot target for the E-Mini S&Ps at 3028.75 noted here on July 23. The actual top occurred three ticks above it, at 3029.50, allowing subscribers and Facebook followers to get short in timely fashion using DIA puts. Numerous subscribers reported 'doubling out' on those puts in the Rick's Picks Trading Room today. By closing out half of their options for twice what they paid, the half of the position that remains is effectively free and riskless. Closing out half of every 'doubler' is a strategy we recommend for virtually all option trades. If you don't subscribe but would like to follow the discussion in the Trading Room (and in the breezier Coffee House), take a free two-week trial subscription by clicking here. No credit card is necessary.
[I will be running this commentary over the weekend so that more people find it. It sounds a bearish theme that I believe will put traders a step ahead of the news for weeks to come. RA] Powell gives Wall Street a scoop of ice cream, and how do the spoiled little brats react? For starters, by setting the curtains on fire and peeing on the living room carpet. The Dow Industrials plummeted 480 points Wednesday after the Fed announced a 25-basis-point rate cut that had been universally expected. Some gratitude! It's safe to say this won't be the last time investors act like a five-year-old throwing a tantrum as they try to pry another 50 basis points from the Open Market Committee. Every parent has been through this and knows the consequences of giving in. The correct reaction is to deny the kid his treat or he'll start demanding one before every meal. The first few times, the kid will stomp his feet, cry, kick and scream. But once a parent gets past the withdrawal stage, things will calm down. How Far? Unfortunately, the banksters have done just the opposite, serving up a dollop of ice cream when the stock market is trading at record highs, America is at full employment and GDP growth is stronger than it's been in a generation. It is unprecedented for the central bank to loosen under such circumstances, but by doing it anyway they have created a monster. How far will stocks have to fall to make Powell & Co. cough up another 50 basis points? We're about to find out.
Our focus on charts of small degree confirmed that so-called rABC trades are nearly always available. Executions can be tricky, however, since the time interval between ‘C’ tops/bottoms and the ‘x’ trigger point can be as short as a few seconds. Watch this recording if you remain to be convinced that it’s worth the trouble.
Apple shares took an exuberant leap Tuesday evening, propelled by strong revenue growth announced after the close. DaBoyz were able to trigger off a short-squeeze because revenues increased with iPhone sales in a relative funk. This likely surprised many traders, since they had been hearing about iPhone's slump in the U.S. and China for the last two quarters. However, a look behind the numbers suggests that AAPL's nearly 4% rally may have been undeserved. For one, although it's true that every area of the company's business other than iPhone grew, the 13% rise in revenues for iPad, Mac and services including music and the apps store was the smallest quarterly increase in nearly four years. Also, profits actually declined for the third straight quarter, falling 13% to yield a slightly-higher-than-estimated $2.18 per share. A Competitor Shows Pluck There was one more reason to view the after-hours rally as at least mildly heedless: Huawei, an increasingly strong competitor in smartphones, announced very strong revenue growth despite the company's blacklisting in the U.S. Under the circumstances, if Trump strikes a trade deal with China that takes some pressure off Huawei, look for AAPL to give up today's gains in a trice when the news hits the tape.
Rick is on a brief hiatus, celebrating a birthday with friends and family. Commentary and trading guidance will resume as normal on Wednesday.
