Buyers handled the 1907.10 Hidden Pivot resistance with ease, then closed comfortably above the 1910 top of a daunting supply zone created when gold was distributed in May and June ahead of a $200 downdraft. This all but guarantees more robust upside, presumably with a test of $2000 that has beckoned since last spring. We can trade the rally as low-risk opportunities arise, the first of which could come from a small peak (i.e., look-to-the-lefter) at 1943.70 recorded in late April.
Silver has yet to confirm gold's breakout last week above a key Hidden Pivot target at 1907.10, but this feat will be hard to avoid, given the power of gold's decisive move through heavy supply and close above it. We'll let the chart continue to tell the story in any event, but an eventual, decisive move through D=24.95 would put the March contract on course for a presumptive test of last spring's dual peaks at, respectively, 26.86 (April 18) and 27.15 (March 8).
TLT ended the week stalled at the 107.65 midpoint pivot of a conventional bullish pattern projecting to 115.87. We'll need to see a decisive push past the pivot -- or better yet, a two-day close above it -- before we assume the target will be reached. In the meantime, a bid can be placed at 103.54, stop 99.42, to get long using a promising 'mechanical' trigger. The trade would offer somewhat better odds if the pullback were to come from our sweet spot midway between p and p2.
This doomed short squeeze will face no challenge until it hits the 21,288 'external' peak shown. The rally probably has enough momentum to get past it, but that would do little to allay my skepticism that Bertie is going anywhere. A 'voodoo number just above 22,000 is where we might try to get short, via an rABC trigger that would risk perhaps 10-15 points on a stop-loss. However, if buyers get past that level easily, they would likely be on their way to 24,000, another place where we can attempt to get short with a penny-ante stop-loss. Stay tuned to the chat room or 'Notifications' for more-precise guidance if an opportunity should arise. ______ UPDATE (Jan 18): Bitcoin's unsustainably steep bear rally is rumored to have been driven by sovereign demand from the U.S., Canada and the Philippines to meet the ransom demands of whoever hacked their air traffic systems recently. This can't end well.
The headline explains why the voracious bounders on Capitol Hill are willing to spend so much time, money and effort getting re-elected. For they are not just investment insiders, they are recidivist sponsors of legislation that directly benefits their stock portfolios. It is quite a racket, and whatever laws exist to prevent them from getting rich serving corporate lobbyists above all, those laws obviously are not working. If you're interested in the sordid details behind their headline-worthy investment success, a website called UnusualWhales publishes an annual report filled with titillating information. "By analyzing publicly accessible financial disclosures," the Whale's authors proclaim, "we found that a quarter of Congress actively traded up to $788M in various assets through 12,700+ transactions in 2022. Although this matches the number of transactions in 2021, the total value has dropped." I was unaware of Unusual Whales' efforts to shine a light on our nation's political cockroaches until my brother, Allen, sent me a link to their site. "For me, reading the headline Congress Outperforms S&P in 2022 was all the clickbait I needed," he wrote. "While it's my habit to look for the best in people, I eagerly make an exception for all politicians. The loftier their position, the greater my skepticism. To temper my deep disdain for them, I try to remember the old adage that it's only 98% of them that give the rest a bad name. Their Favorite Plays "Admittedly,' he continued, "the report is too long for me to read at one sitting -- think Tolstoy -- and although I don't think it will provide any revelations, it makes for fascinating reading nonetheless. Imbibe just the opening paragraphs and you'll see how the greed of Republicans and Democrats run on somewhat different tracks. The top sectors with the highest stock investments
Skepticism toward the rally begun in November blurred my vision for a while, but last week's sunburst turned the intermediate-term picture too bright to ignore. It tripped a conventional buy signal at the green line with sufficient brio to suggest a further run-up to at least p=107.38, or even D=115.33. It is the interaction between buyers and those Hidden Pivot resistances that can tell us whether the rally is just getting warmed up -- i.e., whether the brutal bear market begun in March 2020 is finally over. Stay tuned, because I will be tracking this chart more diligently in the weeks ahead. ______ UPDATE (Jan 12, 6:45 p.m.): A strong, three-day rally has stalled almost precisely at the crucial, 107.38 midpoint Hidden Pivot resistance flagged above. As always, a decisive move past it would portend more upside to the (slightly adjusted) D target at 115.36.
The futures spent Friday in a vicious short squeeze that itself would become short-able if it touches the green line (x=4014.00). I have my doubts the rally will get that far, but we need to take it slightly seriously anyway, since it generated an impulse leg of daily chart degree. The trade carries about $13,000 of theoretical entry risk, assuming a stop-loss at 4180.25 on four contracts. That means it should only be attempted with a 'camouflage' trigger. Prompt me in the chat room if ES gets there, and perhaps we will be able to improvise in real time. ______ UPDATE (Jan 12. 9:54 p.m. EST): The futures spent the entire session in full-nitwit mode, with wild swings greeting news of moderating inflation. Since no one on Earth has the foggiest idea what this means or how it might affect Fed policy, I'll avoid wasting energy pondering such questions and simply track the short trade as having filled at 4014, stop 4180.25. This will be a good test of a 'mechanical' entries that came from an explicitly detailed recommendation. Since the trade caught a 66-point downdraft to 3954 after the futures topped at 4020, I'll treat the short as having been half-covered at a middling 3974. That leaves us with two contracts and a 4054 basis. Let me know in the chat room how you handled the trade, since that might allow me to tighten my guidance. For now, bid 3950 to cover a third contract, o-c-o with a stop-loss on both of the remaining contracts at 4022.
The bearish pattern shown is one we haven't looked at before, but it might provide a better frame of reference for trading this contract than the bullish rABC we've been using. It shows an unfulfilled D target at 67.88 in a conventional ABCD pattern that has produced no fewer than three 'mechanical' shorts, all profitable. It would create yet another with a powerful rally to the green line (x=86.79). However, my gut feeling is that the better opportunity will lie in bottom-fishing if and when CLG hits the target. Some subscribers may hold a bullish call spread in USO that expires Friday. It is based on a recommendation I made in the chat room, but I am not tracking it because only one subscriber mentioned doing the trade. Check the 12:20 post for further details. _______ UPDATE (Jan 12, 11:27 p.m.): The call spread traded as high as 1.45 today, but it could max out at 2.50, five to eight times the price paid, if USO ends the week with a further rally of 1.37 or more.
The chart uses a conventional pattern yielding a downside target at 120.82 that nearly matches an important one we derived earlier from a trendline. It will allow us to trade precise levels if the opportunity should arise. So far, though, even after Friday's sharp, go-along rally, AAPL still failed to generate an impulse leg on the daily chart. That would occur if buyers push this hoax above last Tuesday's 130.90 peak, but even then I wouldn't get too excited. A counterintuitive feature of this chart is that if the rally were to go ballistic, hitting x= 148.33, that would trigger a compelling 'mechanical' short. With close observation, though, we may be able to get short well beneath that level, presumably in a boring 'discomfort zone' where the rally seems fated to die.
[The following went out in mid-December to clients of Doug Behnfield, a Boulder-based wealth manager and senior vice president at Morgan Stanley. The letter provides an insightful view of the economic landscape as we enter the new year. Doug foresees falling stocks, falling inflation (or possibly modest deflation) and a continuing rally in long-term Treasurys. He is one of the most successful investors I know, and also one of the wisest. I have featured his work here many times in the past and am grateful for the opportunity to share his timely thoughts with Rick's Picks readers. I've substituted my own charts from Tradestation for the ones in the original report because they reproduce with greater clarity. Also, the irreverent picture above was my choice, not Doug's. He was assisted in preparing the report by his son Max Behnfield, a financial advisor at Morgan Stanley; and by Amelia Guidi, vice president and financial advisor in Morgan Stanley's Boulder office. RA ] As we wind down a challenging year in the financial markets, there are many events that have occurred that shaped the outcomes that are much easier to see in retrospect. At this time last year, the stock market was making its last glorious run to all-time highsjust as Jerome Powell, the chairman of the Federal Reserve, was being handed the Keys to the City in terms of controlling inflation by President Biden. Powell immediately set out to alter the course of monetary policy that had been Fed Doctrine since 1987, when Alan Greenspan took over as Fed Chairman from Paul Volcker. What has happened since has been quite dramatic. Considering the very recent, downward reversal in long-term interest rates and the accompanying rally in the bond market, now seems like an appropriate time to chronicle what has transpired over the
