Thursday's upthrust had subtle power, surpassing no fewer than three minor peaks without a pause. However, bulls expecting a quick second leg up got stopped out twice on successively lower lows. This weakness should be regarded as less worrisome than if the rally had simply sputtered out and died. Both gold and silver are waiting for a sign from the dollar, which has been their unrelenting nemesis lately. My short-term expectation for the buck is mildly bullish, but we'll just have to wait and see. If the week begins with a Sunday night/Monday morning lurch above the 23.885 'external' peak recorded last Wednesday on the way down, it would give bulls a good shot of reversing the nasty slide of the last five days.
Shorts panicked Friday afternoon, sending this ETF into a bullish spasm that tripped a theoretical short at 270.29. Since we don't know how DaBoyz will open index futures Sunday night, there was little justification for bold action. If DIA were to gap higher Monday morning, following the lead of a rampant E-Mini Dow, a move exceeding not merely C=274.59, but the 'external' peak at 277.40 recorded two days earlier, would be warning bears not to get in the way aggressively. Alternatively, if the week begins with pronounced weakness, use p2=261.70 as a minimum downside target, and thence D=257.41. Both can be bottom-fished with as tight a stop-loss as you can abide. An rABC set-up on a chart of lesser degree will likely be the best way to do this. _______ UPDATE (Sep 29, 5:46 p.m. ET): Buyers chickened out just shy of the 277.40 peak noted above, but they appeared to be staging for a second try after dipping halfway into the gap created by Monday's short-squeeze opening. If Mr. Market is as devious as we know him to be, he will pop DIA above the recent 277.12 peak and then pull out the rug. Here's the chart. _______ UPDATE (Sep 30, 6:13 p.m.): Well, we had the breakout and the possible beginning of a big correction. Now let's see what bears are made of.
The bearish pattern shown, with a 10,445 target, looks quite serviceable and should have worked perfectly. The trouble is, after tripping a theoretical sell signal at 11,413 way back on on September 6, the futures have spent three weeks avoiding the target as though it were a tar pit. It remains valid nonetheless and should work nicely as a back-up-the-truck support for bottom-fishing if hit on Monday. I should also mention that virtually every 'mechanical' short signaled on this chart since Sep 9 would have produced a profit of around $6500 per contract, albeit it with commensurate risk. The next 'mechanical' short would be signaled on a run-up to x=11,413, but this would be, not sloppy seconds, but sloppy thirds, and so I am not recommending the trade. The many failed attempts to go lower would seem to argue for a bullish bias, and that is indeed where we will point when the new week begins -- on the lesser charts, perforce, since the larger ones all say NQ is still a sale. ______ UPDATE (Sep 29, 6:33 pm. ET): The very sloppy price action of the last three weeks has not yet invalidated the bearish target at 10,445, but we will pass up this foul-smelling temptation to get short nonetheless. _______ UPDATE (Oct 1, 6:20 p.m.): The rally feels unstoppable, doesn't it? If this one's going to fail, the logical place for it to happen would be just above C=11,735 (see inset). We'll be waiting with a small-interval rABC pattern to get short with a penny-ante stop-loss..
The chart, with an imaginary rally line extending into the cosmos, is of course facetious, but you get my point: nothing can hold this beast back for long. It continues to benefit from freaked-out bears who understandably lack the guts to stand their ground ahead of weekends. On Friday, they drove the futures up to a level just shy of the point 'C' high of a bearish ABC pattern that served us reasonably well last week. The rally was stronger than in the Dow or the S&Ps, and it would seem to imply that stocks will open with a lurch higher as the new week begins. If DaBoyz are in full command, look for the Cubes to push above the 286.66 'external' peak notched on 9/4. I will be looking to get short nonetheless around 276.40, albeit with risk very tightly controlled. It is a low-odds trade that I am not recommending unless you know how to fashion an rABC stop-loss risking perhaps 8-12 cents. The 252.83 target is still theoretically viable but no longer a great bet. ______ UPDATE (Sep 29, 7:07 p.m. ET): The opening felt too squirrelly to short, so I took no position; nor did I end the day with a strong bias._______ UPDATE (Oct 1, 6:35 p.m.): The Cubes are stealing up on an important resistance, a midpoint Hidden Pivot at 286.20. If they fist-pump past it or close decisively above it, that would hold very bullish implications for next week. Let's see whether buyers can harness Freaky Friday for this heroic task.
Although GDX dipped below the 37.26 downside target we'd been using, the 18-cent overshoot was not necessarily bearish. Even so, we should be prepared for another leg down. As a practical matter, I'd suggested taking our cue from the lesser charts, which in fact yielded up a mildly bullish impulse leg before the week ended. This is not sufficient reason to bet the ranch on a continuation of the rally, but we can at least give bulls the mild benefit of the doubt as the new week begins. At the very least, they will need to push above an 'external' peak at 40.32 recorded last Tuesday if they are to earn more credibility. _______ UPDATE (Oct 6, 8:54 p.m.): Bottom-fish at p=37.33 with as tight a stop-loss as you can abide. If it gets tagged, brace for more downside to as low as 34.60. Here's the chart.
What came to be known as the South Sea Bubble was so pumped up before it popped in 1720 that investors apparently viewed nearly every opportunity as a sure thing. The York Building Company, for one. After being purchased by the Hollow Sword Blade Company, it mutated into a provider of water to London, to a buyer of confiscated Jacobite estates in Scotland, to an insurance company. With this checkered past, the stock still soared from £1oo to £1000 in a single year. The South Sea Bubble itself involved slave trade and rights to conduct business with trading companies in the New World. Rich and poor alike were enticed to pour their savings into such ventures, ostensibly because they believed there was no way to lose. Even Isaac Newton, whose IQ supposedly was around 200, got suckered. He made a pile of money and cashed out when the bubble was in its early stages, but he plunged in again just before the bubble burst and lost everything he'd made -- about $20 million in today's dollars. Newton is said to have remarked, woefully, that "[he could] calculate the motions of the heavenly bodies, but not the madness of people." How crazed were they? One inventive firm that went public in 1720 famously advertised itself as "a company for carrying out an undertaking of great advantage, but nobody to know what it is." Suffice it to say, enough pigeons went for this pitch to make the company's promoters rich. It is not known whether any of the company's shares were in Newton's portfolio. All the Rage If all of this sounds too stupid to actually have occurred, then you haven't heard about SPACs. The acronym stands for "special purpose acquisition companies," and they are all the rage these days on Wall
[Apologies, but my WordPress publishing app is so screwed up that updates for Friday may be somewhat limited. RA] Wednesday's quiet opening was a fooler that gave no hint of the ferocious selling that followed. The Dow and the S&Ps opened moderately higher, extending a two-day rally that traders obviously assumed would continue. Instead, the broad averages rolled over in the first hour on light selling that picked up tempo as the day wore on. This is dangerous price action, considering that the stock market is headed toward a Friday late in September. It suggests that the next leg down, starting by week's end or possibly Sunday night, will come only after bears have suffered at least a day of ratcheting pain. For their part, bulls are unlikely to turn ebullient, just complacent. Watch for the news to cooperate, offering a sordid mixture of headlines from the global police-blotter.
A bull-trap opening greased the skids for the nasty plunge that followed. It caught bulls and bears with their pants down, so there's likely to be follow-through on Thursday. If the selling breaches the 266.00 midpoint support decisively, brace for more downside to as low as 257.41 over the near term. Mechanical shorts can be attempted on snapback rallies to the red or green line, but I am not recommending bottom-fishing with the usual tight stop loss because the A-B impulse leg is low-quality, having failed to surpass any interesting prior lows. _______ UPDATE (Sep 24, 9:20 p.m.): The short trade played out on Thursday exactly as I'd mapped it the previous night. If you did the trade, please let me know and I'll establish a tracking position. In any event, half should have been covered on the selloff that followed DIA's brief pop above the green line.
If the Cubes fall to the 254.96 target today, it will have been three weeks in coming. It has been a tortuous path for bears, even if the gap-down opening on 9/17 all but clinched the ride. The corresponding target for AAPL is 100.99, a Hidden Pivot that at this point looks unavoidable. A secondary 'hidden' support lies at 257.89 (60-min, a= 280.36 on 9/16), and you can bottom-fish there with a stop-loss as tight as eight cents because it is so well located, away from any 'structural' supports. _______ UPDATE (Sep 24, 9:41 p.m.): The rally to the green line (268.02) tripped a mechanical short. No one reported doing the trade, but in any event, half should be covered at p=262.96.
I gave up too early on a soon-to-expire butterfly spread targeted on 100 when the stock rallied nearly $10 this week, but the position appears to have come back from the dead. The original target, 100.99, is now feasible for this week, although the stock has been too squirrelly to be easy pickings. If the target gives way easily, look for more slippage to 95.61, a Hidden Pivot derived from the record high at 137.98 notched on 9/2. It's unlikely to be easy yardage, however, since there are plenty of shorts remaining to be covered from early September's highs above 130. ______ UPDATE (Sep 24, 9:44 p.m.): A reminder: AAPL will fall only when the thieves and pederasts who control the stock want to buy more of it at fire sale prices.
