Last week's decline in 10-Year rates was the biggest since September, catalyzed by Fed easing of 25 basis points. The chart implies there could be a further fall to as low as 3.706%, but I have my doubts. In fact, the steep slide triggered a 'mechanical 'buy' at 4.073% that suggests rates are more likely to rise from here or perhaps a little lower, to at least 4.452%, than they are to fall below 3.937%. If they crack that last number hard, however, odds of more slippage to 3.706% would be no worse than 50-50. FYI, I've substituted the 10-Year for the 30 because the shorter duration is a more sensitive indicator of interest rate risk.
From a Hidden Pivot standpoint, the only thing of interest that occurred in this vehicle last week is that it failed by 11.50 points to hit a juicy target at 7023.00 that I'd advertised. We were therefore unable to get off an opportune short, not because the target was front-run, but because the gratuitous daily blips that have been passing for rallies lately were too weak to reach it. A logical conclusion is that the clueless meandering within the channel shown is starting to break down, and that the two recent breaches of the lower line might be significant. I promised to be sparing in my use of the words 'topping process', but that 's what we are lookng at, it would seem, and it has become almost too tedious to watch. However, since I always try to leave you with a price target no matter how muddled the price action, I'll proffer a bearish one at 6748.00. which comes from conventional A=7027.25 on Feb 3. It can be traded despite the pattern's obviousness, but I'll recommend it only to those of you who know how to execute a CI (counterintuitive) entry.
I restored AAPL to the core list last week with reservations. The company is a dim also-ran in the AI race, having only recently found a partner in Google, the creator of Gemini. There is also the chance Musk will eventually make iPhones obsolete. He keeps insisting that Starlink has no phone on the drawing board, but he's probably just trying to screw with Tim Cooke's head. When the XPhone finally arrives, with superior hardware and no monthly service charge, that will be it for Apple. Concerning the chart, AAPL's steep slide on Friday triggered a 'mechanical' buy at the green line (259.09), stop 243.41. Ordinarily, we're supposed to feel queasy about excuting such trades, since they will always be going against the trend. In this case, however, I will recommend it only to Pivoteers who know how to fashion a reverse-pattern trigger that risks no more than $3.00 per share theoretical on the entry. It should be good for a one-level ride to p=274.76 if it works.
Friday's moderate rally triggered a 'mechanical' short at 5033.50 that I am not recommending. The signal is a weak one because the bounce came off an intraday low that felt unthreatening. The signal is also divergent from a stronger signal in Silver that triggered earlier in the week and which is already profitble, albeit only slightly. My gut feeling is that a bullish breakout in Gold will settle the argument, but we'll wait for this to happen rather than jump the gun. If Silver wins, that would portend a fall in this vehicle to as low as 4700.60 in the week ahead.
The chart shows two bearish patterns at work in Silver,.The larger is a conventioanl ABC with a D target at 44.50, a 42% fall from here. I doubt it will be reached, however, because of bears' failure to overwhelm the midpoint support at 68.13. The implication is that a decline to 56.32, if it gets that far, would offer an excellent buying opportunity. The smaller pattern says bears won't even get that far -- that the correction begun from the Jan 29 high at 121.78 will end at d=69.34. Together with the midpoint support at 68.13, the two Hidden Pivots will present a formidable challenge to bears. Be ready to bid aggressively there if the chance arises.
Subscribers who used the 128.13 bottoming target I posted in the chat room at 12:35 could have gotten an $8 ride from just above Friday's low. The rally left GDXJ hovering within a bearish pattern that projects to as low as 110.79. There is no way to judge the likelihood of this, nor will there be until we've seen how sellers interact with the midpoint hidden Pivot support at 126.20. The trend could also go the other way, blowing out the 141.60 high that forms the pattern's point 'C'. For now, though, GDXJ remains on a theoretical sell signal from x=133.90 that was showing a small loss when the week ended.
The 'mechanical' short recommended from the green line (x= 5.9093) last week narrowly survived getting stopped out when a midweek upthrust failed to surpass the conventional pattern's point 'C' high. On Friday, the futures fell far enough to touch the midpoint Hidden Pivot support (p=5.7035), where we customarily take profits on half a position. If you are still in the trade, plan on taking an additional 25% off at p2=5.4978, the seondary Hidden Pivot, saving the remaining 25% for a possible ride down to D=5.2920. Since there has been little discussion of the trade in the chat room, I will likely replace 'Doc' Copper soon with another symbol as part of a continuing.
AI hubris has got itself in a bind, trapped between two conflicting stories, neither of which seems likely to end well. One story has the boys in the billionaire's club throwing untold sums of money at a technology that seems increasingly unlikely to produce commensurate returns. The other story has been threatening whole sectors of the economy with creative destruction: software development, financial, legal and accounting services, money management, entertainment and even trucking. Each day, there's a menacing new headline about some industry whose workers, mostly white-collar, are about to be replaced by thinking machines. The recent trucking news concerned the logistical problem of routing vans so that they are filled with cargo all the time. Artificial intelligence has taken on this challenge, squeezing out inefficiencies in ways that human workers could not have imagined just a few years ago. The shares of companies that do this work crashed last week, victims of AI's Grim Reaper. It won't end there, either, since driverless fleets of trucks are coming, and soon. Humans will be needed to load and unload them -- that is, until Musk robots come along to relieve them of their jobs. A Chimpanzee Reflex Whenever creative-destruction stories hit the tape, the chimpanzees entrusted with America's 401(k) savings instantly dump the shares of all companies likely to be impacted. The trouble is that the list is growing so fast that it has become hard to imagine an area of the economy that will not be affected. We are talking mainly about job losses, and there seems to be no end to the number and variety of positions in AI's crosshairs. So what's an investor to do? Our money is on Musk, arguably the only player with a strategy imaginative enough to encompass and integrate AI's myriad possibilities while also
The chart leaves no doubt that this short-squeeze rally will reach the 7023.00 target. Friday's move impaled the midpoint resistance (p=6887.25), then went on to poke a hole through p2=6955.13 and close within a hair of it. Is this sufficient power to produce the bullish breakout investors have awaited since the Halloween top just above 7000? Probably. Although d=7023.00 will still be worth shorting, you should do so with a delicate 'reverse pattern' trigger that risks no more than 3.00 or so points per contract. In the meantime, bull trades will likely enjoy safe passage at least to 'd'.
I've returned AAPL to the list, since MSFT's dirge is no longer representative of the animal spirits that have been moving the markets higher. The chart shown leaves room for a possible double top, but I've selected a lower point 'A' in order to project a likely move to new record highs. The move through p=274.76 is not quite powerful enough to guarantee this, but it will offer 80% odds if the stock can close for two more consecutive days above p=274.76. At the point, the secondary Hidden Pivot (p2=290.42) would become my minimum upside objective. If a pullback to the green line (x=259.09) were to occur first, it would offer a stellar opportunity for a 'mechanical' buy, stop 242.00.
