I've drawn a pattern that should suffice to contain the constipated price action of this flaky proxy for global manufacturing. What you can expect in the week ahead is more range-bound trading, but with the prospect of an enticing 'mechanical' buy if the April contract should come down to the green line (x=75.12). The implied entry risk of $10,000 on four contracts is too steep to initiate the trade conventionally, but it may be possible to cut that by as much as 90% with close attention to bullish entry patterns on the lesser charts. Stay tuned to the chat room if interested. _______ UPDATE (Feb 22, 10:01 p.m.): The trade mentioned above triggered, but only on paper, since no one mentioned it in the chat room. Whatever happens next, even if it's a breakdown, promises to be as inconsequential as everything else that's occurred on the daily chart since August. _______ UPDATE (Feb 25): Zzzzzzzzzzzzz. _______ UPDATE (Mar 11): Zzzzzzzzzzzzzzzzzzzz. _______ UPDATE (Mar 13, 6:40 p.m.): April Crude looked ripe for bottom-fishing this afternoon, based on the 70.50 D target shown in this chart. Alas, the futures turned higher from just above it, mooting the opportunity. The pattern seemed gnarly enough to work, but the fact that the three coordinates are so obvious when viewed at-a-glance might have argued otherwise. Today's price action leaves me more open to the possibility that crude may be carving out a short-term bottom. _______ UPDATE (Mar 15, 11:58 p.m.): Crude carved out a possible bottom all right (see above) -- with the steepest one-day plunge since July! The 65.65 low was foreseeable, or very nearly so, but arguably too distant from D=65.03 to cue up the kind of tight-fisted rABC entry we prefer. The bounce was ferocious, but it remains to be seen whether it
Although TLT's downtrend reversed last week from very near the 101.33 Hidden Pivot where we'd expected it, I doubt that this will mark sellers' final gasp. It would take a rally exceeding the 104.83 'external' peak recorded on Valentine's Day to bring some bullish energy to the chart. However, my hunch is that a test of structural support around 99.40, where a double bottom was carved out in the final days of 2022, is more likely.
The Dollar Index made modest progress last week toward a 108.01 rally target we've been using as an upside objective for the intermediate term. It should take 5-7 weeks to reach this number, assuming it is achieved at all. That is by no means assured, however. Until such time as DXY pushes decisively past the p=104.46 midpoint Hidden Pivot where it stalled last week, I cannot offer you a high-confidence forecast. More immediately, bulls will need to breach the 105.31 'external' peak recorded on January 6 to demonstrate their staying power. _______ UPDATE (Feb 25): The Dollar Index exceeded the 105.31 peak noted above by a penny on Friday. That's as significant technically as $2 overshoot, and it implies DXY will continue toward the 108.01 target. Gold will of course remain under pressure.
Only on Wall Street is fake news celebrated with such shameless hubris as we've seen lately. In the last few weeks, flouting a torrent of lousy earnings reports, investors have gorged themselves on stocks. This resurgence, doomed by recession and a grim outlook for earnings, was strongly supported by fake, or at least meaningless, employment data showing strong payroll growth. Never mind that most of the newly re-employed were waitresses, shoe store clerks and cruise-ship saxophonists who got laid off during the pandemic. Now they'll be able to pay the rent again with their own money rather than with taxpayer handouts -- a modest gain that economists, Biden and his remaining few stalwarts would herald as evidence of boom times. Let's not dwell in the meantime on the fact that high-paying tech jobs have been shrinking at a disturbing rate -- by 32,000 in just the last month. None of this was even faintly on Biden's mind, such as it is, when he served up a State of the Union address last week telling us why it is once again Morning in America. In reality, U.S. data alleging 3% GDP growth in the last two quarters conflicts sharply with widespread perceptions that the economy remains mired in a recession begun early last year. The eggheads are so deeply in denial about this that they have returned to laughable speculation about whether America can 'avoid' recession. Signs of Decline But no matter how many jobs are added, and however inflated the stock market and real estate become, the things that determine our standard of living will continue to erode or disappear, just as they've been doing since the 1970s. Who doubts, for one, that the day is coming when the last department store closes its doors, leaving us to do most
The steeply impulsive move begun on Feb 1 from 100.91 warrants a fresh perspective that is cautiously bullish. I've chosen a reverse pattern with a 108.01 target and a 104.46 midpoint Hidden Pivot that can serve as a minimum upside objective for the very near-term. If DXY takes it out without effort and runs up to 106, that would call for an even larger bullish pattern with a 110.95 target. We'll let price action speak for itself, but expect bullion to remain under pressure as long as the dollar is rising.
I've drawn a bullish pattern to begin the week, but only for the purpose of exploiting the midpoint resistance at 4140.75 to get short. Friday's close was ostensibly bullish, but the rally was so lacking in guts that whatever attempt DaBoyz make to head-fake Sunday/Monday's opening seems doomed to fail. Ordinarily I'd suggest getting short with a limit offer at the red line and a very tight stop-loss at 4142.25. However, because I've hung out the trade on the front page, I'll recommend using a 'camouflage' set-up with a less visible entry point. ______ UPDATE (Feb 14, 4:16 p.m.): The test-the-water short got blown to smithereens, albeit with little or no pain for subscribers who followed my real-time guidance in the chat room. The subsequent, psychotic spasms failed by a hair this morning to trigger an opportune 'mechanical' buy, but the 4220.75 rally target of the pattern from which the short was culled remains viable as a minimum upside objective.
TLT took a $2.20 bounce from with six cents of the 104.45 target flagged here for bottom-fishing, but the rally was short-lived. The relapse has further to go and looks likely to achieve the 101.66 downside 'D' target shown in the chart (inset). A pause at p2=102.90 could occur, but the way sellers crushed the 104.14 midpoint support, the respite is unlikely to be tradeable. Bottom-fishing precisely at 101.66 doesn't look promising either, since the herd will be nervously focused on the nearby low at 101.78 recorded on Jan 5. ______ UPDATE (Feb 16, 8:26 p.m.): A minor Hidden Pivot support at 101.33 has precisely contained the latest plunge of this sack of lug nuts, but it remains to be seen whether it has terminated it.
GDXJ took four months to rise to within a penny of the 41.16 target I'd billboarded since November, so we shouldn't be too eager to jump back in while it takes a proper rest. At the moment, the ETF looks unlikely to avoid more slippage to at least p=33.49, but we'll need to find another marker to re-board on the anticipated weakness, since the pattern is spent for trading purposes.
The chart shown is experimental. It is continuous, meaning that it blends highs and lows from different contract months to produce a 4257.50 rally target. The A, B and C coordinates are related, but only as cousins, not siblings. Will the 'D' target still work? The 'p' midpoint certainly did, precisely containing the C-D rally leg, albeit not for long. We've been using the 4233.50 target of the same pattern, except derived 'organically' from the March contract. Last week's short squeeze got within 0.5% of it, but my gut feeling is that the futures have consolidated enough already to blow past 4233.50 on the next upthrust. That target can be used nevertheless to get short with a tightly compressed rABC pattern, but I'm going to suggest using 4257.50 as well, if and when the futures get there. Incidentally, it is 'backstopped' by a 'voodoo resistance' at 4252 that could also be used to anchor an rABC short.
AAPL appears hellbent on reaching the top of a channel that has contained its huge ups and downs for more than a year. If the stock gets there within the next two weeks, the line's presumptive stopping power would be felt at around 168. It's reasonable to ask whether the rally is capable of reaching the line, but any progress above it would seem as unlikely as the emergence of a booming global economy from a debt contraction that has only recently begun. We shouldn't assume that this is impossible, but neither should we pass up the several opportunities to get short nearly risklessly that would occur as the stock ascends toward the channel line. _____ UPDATE (Feb 15, 8:30 p.m.): Here's a speculation for Thursday if you've got money burning a hole in your pocket: Buy two expiring AAPL 155 puts if the stock touches 156.30 before 11:00 a.m. ET. I estimate they'll be trading for around 0.73. Stop yourself out if AAPL exceeds 157.38. ______ UPDATE (Feb 16, 8:51 p.m.): The stock touched 156.33 and then crashed, sending Feb 155 puts that could have been bought for as little as 0.53 to 1.90 in less than two hours. All of this happened after 2:20 p.m., when, as I'd anticipated, I was too busy to provide timely guidance. That's why I suggested an 11:00 a.m. cutoff for the trade. Fortunately, some subscribers who ignored the clock and acted on my recommendation (see above) above were rewarded with windfall profits by day's end. Here's a graph of AAPL's delightful plunge -- doubtless a surprise to everyone but us.
