We'll stick with our game plan: a mechanical bid at 38,328, stop 28,819. Since the initial risk would be $9509, the trade is recommended only to those who have profited significantly from my previous bitcoin recommendations. All have been profitable, albeit with sizable draw-downs in some instances. Feel free in any event to interpolate the trade using a cheaper vehicle, such as RIOT or GBTC, to cut entry risk down to size. Please note that a somewhat riskier 'mechanical' entry already triggered at 47,845, using a 41,500 stop-loss. I expect the trade to work, but I did not explicitly recommend it because the lower entry at 38,328, if it ripens, looks like a better bet. Both gambits use an ABC pattern projecting to 66,880, a target given here previously. ______ UPDATE (from the chat room, Mar 10): The paper trade from 47,845 is still going strong. As those of you who have followed my Bitcoin trading signals here and in the chat room will attest, this vehicle has yet to trigger a 'mechanical' trade on the daily chart that didn't make money. I hadn't expected the 38,328 entry to trigger, since that would have implied stopping out the existing trade. It's plain to see that bitcoin does not gift timid bulls with lazy corrections.
Although I can offer no guarantees that the 1702.00 downside target shown in the chart will definitively end gold's seven-month dirge, it looks promising to produce at least a temporary bottom and a high-odds spot for bottom-fishing. A tightly-stopped limit bid very near the target is one way to go, but if you're proficient with 'reverse ABC' (rABC) set-ups, try using the 1759.00 low recorded on February 9 as point 'A' before you start positioning 'C' somewhere below 1703.00. This trick will still leave about $1400 of entry risk per contract, but you can cut that by as much as 80% using an 'artificial' point 'A' at 1782.20, last Wednesday's low. A third option, for Pivoteers who have been attending Wednesday classes regularly, would be to employ a 'camouflage' trigger on the five-minute-or-less chart. _______ UPDATE (Mar 3, 3:50 p.m. EST): The April contract struggled to hold above the 1702.00 target, but if it gives way you should brace for more slippage to D1=1660.40, or thence to D2=1630.50, my worst case low for the bear cycle begun last August. D2 requires using the 'marquee' high, A2=2107.60 -- an unusual choice, but our only option if the downtrend progresses. So far, D=1702.00 has been exceeded by just 2.60, not enough for us to infer the Hidden Pivot support has been compromised. Each of the targets can be bottom-fished with a risk-averse set-up based on the Hidden Pivot method, but if the last is reached, you can be more aggressive.
There are no glow-in-the-dark correction targets in Silver's chart that correspond to the one I've suggested bottom-fishing in gold. The secondary pivot at 25.89 can be used to attempt it, but I'd suggest doing so only with an rABC set-up capable of significantly reducing the entry risk. If you use the 27.41 low recorded on February 24 as point 'A', the implied initial risk would be a tad less than $1000 per contract, a bit rich for my taste. Your best bet, more labor-intensive, for cutting that to $150 or so would be to use a camouflage set-up once p2=25.89 has been touched. _____ UPDATE (Mar 3, 5:54 p.m. EST): Use the 25.03 target shown in this chart as a minimum downside target and a place to bottom-fish if support at p2=25.89 fails. The secondary pivot has already produced a robust bounce, but buying there (25.89) on a second re-rest is not advised.
The global credit-blowout has stoked fears of a money-printing catastrophe like the one that wrecked Germany's economy a hundred years ago, planting the seeds of World War II. However, even a cursory look at the Weimar hyperinflation of 1921-23 reveals why it is extremely unlikely to happen again, especially on a global scale. It was a local event involving physical paper currency that would be nearly impossible to replicate using a global reserve dollar, particularly at a time when digital transactions overwhelmingly dominate. The German hyperinflation featured literal boxcars of D-marks delivered weekly to the biggest employers. The country was a 'union shop', so to speak, and the sums sent to workers ahead of each payday were continually renegotiated to include an adjustment for inflation. The system was put in place in order to hold down unemployment and worker unrest. It worked so well, at least initially, that the Germans enjoyed lower joblessness in 1920-22 than some of the Allied nations that had defeated them in The Great War. Money by the Boxcar The money-filled boxcars pushed the exchange rate to an extreme, in 1923, of 4.2 trillion marks per dollar. However, the periodic spikes in money creation that quickly ramped inflation to this level were caused not chiefly by official money-printing, but by employers who issued their own scrip. This was by agreement with the German government, which was fearful of riots if workers were not paid on time. In fact, Germany's money presses, stressed to the limit, did break down a couple of times during the 1921-23 period. Employers reacted to this emergency with such patriotic vigor that it was immediately following each of their scrip-a-loozas that inflation took unfathomable leaps. No similar mechanism or infrastructure exists to ramp up the physical supply of U.S. dollars. Although it
They don't ring a bell at the top of bull markets, as the saying goes, but perhaps this time it will be different. Indeed, every sentient guru and talking head who is not shilling for Wall Street is properly bearish, and even the chimpanzees who make their living rotating Other People's Money into flavor-of-the-month investment themes were beginning to doubt the stock market's sanity. If a much-needed 10,000-point drop in the Dow is coming, consider it electroshock therapy. Unfortunately, it'll probably take a lot more than that to purge the markets of mental illness as serious as we've seen in recent years. Speaking as a trader and a chartist, I'm looking forward to the violent price swings that likely lie ahead. The Hidden Pivot Method turns out to work best when things get really crazy, as occurred during the dot-com mania and the Great Financial Collapse of 2007-08. It will be interesting to see whether the Reddit kids have scared off institutional heavies who might otherwise get short up the wazoo over the course of a bear market. My hunch is that they will still short like crazy but avoid doing so in individual stocks that could attract dangerous attention. Keeping Suckers in the Game Getting short will not be a piece of cake, since a bear market as long overdue as this one is going to attract many players who are all-too-eager to pick tops. We've tried it ourselves recently using Hidden Pivot targets that precisely nailed peaks in several indexes, although not in IWM, a small-cap vehicle that still has a major target outstanding 4% above, at 234.82. Like so many amateurs, we got spooked out of some DIA puts on Wednesday when the Dow rallied nearly 500 points. That's the way it's going to be the whole
T-Bonds have been a steepening correction since March, but on this particular morning Rick put out a buy in TLT that went profitable instantly. The trade came straight from the ‘discomfort zone’ that so often produces the biggest winners. This lesson details the set-up, which comprises an rABC variation on the old-style ‘counterintuitive’ entry. It is a must-view for anyone looking for high-odds alternatives to ‘mechanical’ entries.
QQQ poked its rapacious snout just above a compelling Hidden Pivot resistance at 337.10 last week, then rolled down with somewhat more conviction than the Dow. It ended the week toward the lows, leaving the possibility of a hung jury when the new week begins. We’ll reserve judgment for now, but if short-covering should shred the resistance and leave it behind, I’d have to grudgingly concede that the 352.09 secondary pivot shown in this chart is in play as a minimum upside objective. Another interesting aspect of the chart is that QQQ would trip an enticing ‘mechanical’ buy if it were to plunge 12% to the green line at 290.77. ______ UPDATE (Feb 25, 5:53 p.m.): It's been a long time since a week ended with a crushing decline, but perhaps this will be the one patient bears can celebrate. The fact that the selloff begun ten days ago from a high 1.09 points above our longstanding target at 337.10 at least makes it interesting.
The futures spent the entire week head-butting a 3938.25 target that has been in play since early November. Ordinarily we might infer that a major top is in the works. But these are not ordinary times, and a practically inexhaustible supply of credit dollars has given the trend an aura of invincibility. My hunch is that an unexpectedly strong dollar and high borrowing rates will snuff the good times, but even then it will take time to sap the manic energy behind the rallies. Let's see what another week brings. In any event, the futures would need to fall all the way to 3652, or about 6%, to generate a bearish impulse leg on the daily chart. _______ UPDATE (Feb 24, 7:14 p.m. EST): Bears are caught in a short squeeze that is the first in a month, although it has yet to turn savage. That will likely happen by week's end if it happens at all, and it will be announced by a decisive push through the 3925 midpoint Hidden Pivot shown in this chart. At that point the futures should be presumed headed toward the 4046 target, although I cannot yet say for sure whether it will be reached or, alternatively, if the trend will fail at p2=3986. _______ UPDATE (Feb 25, 6:04 p.m.): Wednesday night's sharp reversal left barely intact a mechanical buy I'd suggested paper-trading. However, the more interesting fact is that the trade was an instant loser even though the set-up was textbook attractive. This suggests sellers are getting antsy, even if no one has hit the panic button yet. Perhaps this is a bout to occur ahead of Friday's closing bell?
The longstanding target at 318.30 was effectively fulfilled last week when DIA got within 0.70 points of it just ahead of Wednesday's regular-session opening. Even so, the Dow ETF remained buoyant for the remainder of the week, finishing near the middle of the range. A lunge higher on Monday or Tuesday is not likely to get very far, but let's stipulate that DIA must close above 318.30 for two consecutive days before we assume that bulls are still in charge. Otherwise, a rolldown is coming, possibly turning into a long-overdue avalanche. ______ UPDATE (Feb 23, 8:23 p.m.): The hoax that wouldn't die, apparently. Since DIA hasn't actually touched 318.30, let me suggest buying a few cheap, soon-to-expire puts if and when it does. Treat them as you would a scratch-off lottery ticket, since you won't be getting much better odds. All you'll be doing is satisfying a gambling jones for picking tops, but what's so wrong with that? ______ UPDATE (Feb 24, 7:20 p.m.): The puts came to us for as little as 0.38-0.40, but I suggested blowing them out shortly thereafter when DIA fist-pumped its way past the 318.30 target. This implies more upside to at least 327.45 (60-minute, A= 261.41 on 10/30; B= 299.49 on 11/9). ______ UPDATE (Feb 25, 6:08 p.m.): Today's dive failed to generate a bearish impulse leg on the intraday charts, but I wouldn't count on relative strength in the Dow to save the day for other broad indexes that fared worse. Key support lies just below 300.
IWM's recent failure to achieve either of two rally targets I'd drum-rolled is curious, given that it has been the vehicle of choice for portfolio chimps paid to throw other people's money at superficially appealing 'themes'. The more important of the targets is 234.82, derived from a pattern that stretches back to the beginning of the bull market in 2009. The other is the 232.72 target shown in the inset. It's possible the chimps, abetted by their unwitting slaves, short-covering bears, will lay waste to the two Hidden Pivot obstacles in the week(s) ahead. For now, though, we can infer only that Big Money has stalled, presumably waiting for bears to provide the kind of boost that mere bullish buying cannot. Given the targeted tops that have occurred recently in the Dow, QQQ and S&Ps, the burden of proof will be on the optimists as the week begins. ______ UPDATE (Feb 24, 7:25 p.m.): The lunatic brigades were back, bolstered by short covering that drove this gas bag to within easy distance of 234.82. Right now, that's the only place I'm recommending getting short. _______ UPDATE (Feb 25, 6:12 p.m. EST): Our chances of getting short at 234.82 further dimmed today, although IWM's dive has yet to do any serious damage to the intraday charts. Let's see what Friday brings.
