TLT turned leaden last week, failing to capitalize on two conventional 'buy' signals at the green line. The still-bullish pattern shown seems likely to be negated this week with a move or feint beneath C=106.28, but I doubt this would mark the beginning of a significant downturn. TLT should still be viewed nevertheless as in a bear rally with potential to 116.71 or even 124.99 over the next 6-10 weeks (rABC on daily, where a=139.01 on 3/18/20). ______ UPDATE (Dec 21, 8:30 p.m.): I've shifted to a somewhat larger 'reverse' pattern, since the rally target of the smaller one was slightly exceeded. The pattern is unorthodox, but it's all we've got for now. Its usefulness will be tested if TLT drops to the green line (x=96.79), triggering a 'mechanical' buy signal (stop 91.84).
Nearly three weeks of consolidation may have doused the flames from November's volcanic eruption, but the labored ups and downs over that period haven't diminished the odds that the next bull leg will hit 1907.10. The target, a Hidden Pivot resistance of daily-chart degree, is shown in the inset. It became no worse than an even-odds bet to be reached last week when the futures briefly poked above the midpoint resistance (p) at 1820.30. They subsequently missed triggering a mechanical buy at the green line (x-1776.90), but the trade will still be viable when trading resumes Sunday evening. With implied entry risk of around $17,000 on four contracts, this one is for subscribers who know how to cut that to $1500 or less using 'camouflage'. The green line should not be construed as a support or a target; it is just a reference point we use to do certain types of trades. _______ UPDATE (Dec 23): The 'mechanical' buy at 1776.90 noted above is still valid and carries the same caveats. _______ UPDATE (Dec 27, 10:27 p.m.): The C-D leg has become so labored and punitive that I am no longer recommending a 'mechanical' buy on a pullback to x. The 1907.10 target remains theoretically viable nonetheless.
There is more enthusiasm pushing silver than gold, although both are likely to hit their respective 'D' targets more or less simultaneously. (March Silver's lies at 24.95.) That makes a 'mechanical' buy at the red line (p=22.86) somewhat riskier, since the required stop-loss at 22.16 might tempt silver's handlers to drift their way down to it if gold's sluggish behavior continues. A scarier plunge to the green line (x=21.83) would paradoxically offer a better 'mechanical' buying opportunity, but we should plan on initiating the trade with a 'camouflage' trigger so that the implied entry risk, which would exceed $20,000 on four contracts, is not so terrifying. _______ UPDATE (Dec 23): The futures made a marginal new high last week that fell 42 cents short of my 24.94 target. It remains valid nonetheless and can be played via a 'mechanical' buy at the red line (22.86), stop 22.17. Nudge me in the chat room for real-tie guidance that can help cut entry risk by 90% or more.
Crude's fright-mask squeeze last week would have made a tempting short if it had reached the green line (x=79.44). Alas, buyers quit at 77.75, sending the futures into a $3 dive on Friday to 74.29. The 67.74 downside target remains valid, and so our trading bias should be bearish as a new week begins. Nudge me in the chat room if another fake rally hits x=79.44, and I may be able to provide timely guidance.______ UPDATE (Dec 22, 9:00 a.m.): See my posts in the chat room earlier this morning regarding timely and real-time trading opportunities in the February contract.
The bigger the picture, the less glamorous bitcoin seems. Each time it embarks on yet another doomed rally, we are reminded that the supposedly smart money is just as trapped as the hoi polloi. This bitcoin proxy, which reflects best bids and offers in real time across whatever crypto markets still exist, appears bound lower to at least 11,484. Bitcoin long ago stopped leading the flow of speculative money and now lags it, a lowly slave to the stock market's ups and downs within the context of the bear market begun last January. If Bertie were to rally to the green line (x=21,774), that would be a gift to bears who'd rather short into strength than weakness.
The modest bear market rally begun in October likely ended last week when stocks turned sharply lower after failing to achieve clear 'Hidden Pivot' rally targets. Now, if the selling should continue to exceed minor abcd targets as occurred last week, that would affirm that Papa Bear is back. AAPL in particular, the world's most valuable stock, took a dive that has another 10% to go before good support is likely to materialize near $120 (see chart, above). The smart money that manipulates AAPL was finding it increasingly difficulty to distribute stocks to widows, pensioners and rubes. Making the shares affordable to the masses was their intention when they split the stock 4:1 in August 2020. AAPL was trading for around $600 at the time, priced well beyond the reach of most individual investors. How the Game Works The split allowed AAPL's canny institutional sponsors to rig the stock's price action so that AAPL could forge steeply higher without requiring large infusions of cash. This simple trick was always performed in the dead of night, when volume typically dries up. The smart guys would pull their bids, letting AAPL fall for no apparent reason. With sellers exhausted ahead of the opening bell, it was easy for the thimble-riggers to trigger off a short squeeze, gapping the stock well above the level where overnight selling had begun. It was even easier to create bullish gaps when AAPL wafted higher overnight on thin volume, since the day began with shorts already spooked out of their wits and hemorrhaging losses. Covering their positions was costly because DaBoyz backed off their offers, causing the stock to soar on light volume. Very little stock changes hands in these gaps. AAPL could be trading for, say, 147 on the close, and then open the next morning
Bloomberg News, buzzed on Fed Kool-Aid as always, thinks the banksters have engineered a soft landing for deflation. Although it's true that price bubbles in everything from used cars to styrofoam surfboard blanks have begun to detumesce, there is no reason to think the shrinkage will stop when inflation falls to some 'comfortable' level. That's not how deflation works, especially when it is correcting excesses of the biggest financial bubble ever. In residential real estate, the implosion has been mild enough so far that sellers actually seem to think they'll get their price if they wait long enough. Sitting pretty? Only in their dreams. With 30-year fixed mortgages currently averaging 7.5%, many first-time buyers might be starting to wonder whether they will ever own a home. They need little convincing in the meantime that we're in a recession, even if owners of unmortgaged homes priced above $2 million think the U.S. economy is hunky-dory. Muddling Toward a Crash If business merely muddles along in 2023 without slipping deeper into recession, the gap between buyers and sellers can only widen. To the extent this is already happening, we're in the beginning of a silent crash in residential property values. It is particularly deceptive because mortgage-based transactions have dried up, turning price discovery opaque. Incipient deflation is more visible in commercial real estate, with vacancy rates above 15% in Houston (18.9%), Dallas (17.6%), San Francisco (15.5%), Washington (15.2%) and Chicago (15.08%). These figures grossly understate the problem, since many urban centers are slipping into a self-perpetuating spiral of declining tax revenues, decaying public amenities and an exodus of workers to places that are more livable and affordable. Texas, Tennessee, Florida, Arizona and Nevada are among the biggest gainers, California the biggest loser. San Francisco, for all of its natural gifts, could be
AAPL looked like hell last week, stopping out the point 'C' low of a weak bullish pattern, but making little headway on the obligatory bounce. Desperation will not provide the distribution opportunities its handlers seek, but their one good trick -- gapping the stock down on the opening in order to exhaust sellers -- hasn't been working lately because shorts are not as easily spooked. Well below the pattern is a downward sloping, red line. It is the lower trendline of a channel I'd said could contain some big swings in 2023 without allowing a major breakdown or breakout. For your information, the upper channel-line will come in at around 172 this week, the lower at 121. In theory, that would free the stock to swing wildly over a 51-point range as we enter the new year.
After stumbling out of the gate last Sunday evening, DaBoyz just couldn't get it going. It was two steps up, four steps back all week before they threw in the towel on Friday with exhaustion selling in the final hour. The intraday high had missed p=4029.25 by more than a smidgen, implying more weakness lies ahead. If I'd lowered my expectations at the opening, I might have seen this juicy reverse-pattern short come into focus. Oh well. If the futures take out last week's lows, I'd wait until they fall to at least 3863, a voodoo number, before attempting to bottom-fish. _______ UPDATE (Dec 12, 9:37): Not a bad trick, getting this hoax to waft 60 points higher with nary a bullish buyer in sight. It was all short-covering, and it failed to surpass even a single 'external' peak. That would require a print above last Monday's 4047 peak. Let's see if bears are sufficiently unnerved to supply the necessary lift. My guess st the moment is yes, although I doubt the rally will breach the next significant external peak, 4119.25. Since we should never have to guess about such things, here's a chart that can not only tell us everything we need to know, but also enable us to profitably trade the move however high it goes. _____ UPDATE (Dec 13, 10:45 p.m.): What the heck was that all about??? We'd wanted the faked death dive portion of the day to touch our 'mechanical' bid at the green line (4022.44). Although I'd said in the chat room that the six-point gap wasn't close enough to x to do the trade, it would have qualified based on the new, mainly visual standard I am using to judge such opportunities. In any event, the 4245.25 target remains viable as a short-term
The nasty, two-day plunge that ended the week has set up a paradoxically appealing 'mechanical' buy at the green line (x=106.12, stop 104.65). The best 'mechanical' trades are supposed to look scary, and this one certainly does. I can't guarantee that a round lot bought with a 106.12 bid will bounce all the way to D=110.49, but I'd say odds of at least a one-level rebound (i.e., to p=107.57) are about 80%. If you've been paper-trading the more frightening 'mechanical' set-ups, I'd suggest that you sit back, relax, and continue to keep score in order to develop enough confidence to trade them with real money.
