Friday's refreshing death dive may have felt like the start of something big, but the chart suggests we'd probably have been buyers at the close. The 106-point selloff hit the green line after topping midway between p2 and D, generating a classic 'mechanical' buy signal that we've seen work again and again. This is not to say the rally we can expect on Monday will necessarily reach D=3846.75, only that getting long at the green line (stop 3571.75) would probably have been a good bet for at least a one-level ride to p=3709.25. That's a nearly $14,000 opportunity, but we passed it up because staking out a position in the final hour of a Friday is courting trouble and not how we roll. ______ UPDATE (Oct 10, 11:06 p.m.): Although the 'mechanical' buy at 3640.50 (stop 3571.50) remains nominally alive, today's dirge killed my interest in the trade early in the session. (See my post at 12:50.) For their part, sellers did nothing to brag about. They will win on Tuesday, though, unless DaBoyz can gin up some "news" to trigger off a short squeeze. ______ UPDATE (Oct 13, 5:05 p.m.): Use this pattern to make tradable sense of today's lunatic bounce, an affront and disgrace to civilization itself. Although there is little meaning to any statistical news we read these days, traders evidently feel obliged to go nuts with it, even if no one can say whether the news will prove bullish or bearish. Today they interpreted it both ways by turns, but don't expect the psychotic rally that ended the day to get very far, even if it exceeds D=3750.25 (corrected) in an ultimately doomed attempt to fool patient bears.
Friday's psychotic leap took November Crude into a zone of heavy supply, where it had traded mostly within a $10 range between July and September. It seems doubtful that the mechanics who engineered the impressive short squeeze will be able to propagate another as the new week begins. However, if they do, exceeding two 'external' peaks at, respectively, 96.82 and 97.91 within a day or two, that would be the most bullish technical sign we've seen in a long time. More likely in my estimation is that the futures will bog down in a consolidation (or possibly distribution) below the peaks for an indefinite period. We'll let price action speak for itself, however, milking it for all it's worth no matter what happens. The trade posted in the chat room on Friday morning was an example of this, a tightly controlled short that caught the intraday high within three cents.
AAPL's brutal tumble on Friday looked bound at the close for a minimum 137.83, the 'secondary' Hidden Pivot in the thumbnail chart. Because this price point coincides with a key low recorded on last Monday's opening, sellers are unlikely to go for the gusto (i.e., D=134.59) until they've experienced a failed rally attempt from p2. A plunge in the first 30 minutes to p2=137.83 should be viewed as a buying opportunity, especially if you can craft a low-risk trigger using a tight rABC pattern with an a-b leg of no m ore than 20 cents. _____ UPDATE (Oct 13, 4:27 p.m.): The 134.59 target drum-rolled above nailed the low of a nearly 7% bounce that is one of the biggest ever for this stock in a single day. Only one subscriber commented on this -- he said he made money on the way down -- further affirming that subscribers have almost no interest in this stock. I get where you're at, but I will continue to track AAPL anyway because, as I like to remind you constantly, it is the only stock that matters: Get AAPL right, and you get the stock market right. In fact, you could have made money buying anything today when AAPL was bottoming within 22 cents (i.e., two-tenths of one percent) of the billboarded target. Here's a snapshot of the Masters of the Universe adding hundreds of billions of dollars to the world's store of "wealth" by goosing the stock into thin air.
Gold rallied on two consecutive days last week, but I'd caution against getting your hopes too high. For one, the rally occurred off a 1622 low that bearishly exceeded the 'D' target of a clear and compelling downtrending pattern. For two, the down-leg that created that low is strongly impulsive, having exceeded no fewer than three important 'internal' lows recorded since early in 2021. That implies that this rally is merely corrected and should be viewed as such unless it exceeds the 1824.60 'external' peak from August 12. And thirdly, the futures missed a crystal-clear 1750 rally target before turning down last week. That said, the hourly chart remains mildly bullish and can be traded with that bias, especially if buyers get second wind and push the December contract above September 12's 1746 peak this week. _______ UPDATE (Oct 13, 5:30): Yeah sure, that was the bottom.
Silver outperformed gold last week with an impulsive rally that exceeded an imposing 'external' peak at 21.02 recorded on August 15. The December contract is still on track to achieve the 22.615 rally target noted here earlier, but it's hardly a done deal. First a technical hurdle encountered at last week's high must be cleared. Notice that the high occurred precisely at the green line (see inset), which lies at 21.31. That triggered a 'mechanical' short that would require a stop-loss at 22.81 (if initiated without 'camouflage'). My gut feeling is that the stop will be hit, which would negate the mildly bearish implications of the stall. Alternatively, the 'mechanical' short would be the winner if Silver relapses to D=16.84. We should monitor the lesser charts closely in the meantime so that we don't have to wait for the big move either way to determine which trend -- up or down -- is dominant.
TLT, an ETF proxy for the long bond, is headed down to at least 95.85, a 5% fall from these levels. That would imply that rates on the 30-year are about to rise from a current 3.84% to 3.91%. However, my long-term forecast calls for a 5% rate on the Long Bond and 4.9% on the Note, so TLT presumably has a long way to before it hits bottom. Most immediately, though, look for more slippage to the 97.72 target shown in this chart. It is all but certain to be hit, but it can also be used to bottom-fish with a tight rABC trigger. _____ UPDATE (Oct 18, 8:52 p.m.): TLT's dip beneath the 97.72 target precipitated an outpouring of interest in the chat room that I would never have imagined existed. This latest show of weakness has not much depleted our supply of downside targets, the next of which lies at 95.85 (as noted above). That Hidden Pivot support isn't likely to last long either, since rates on the 30-Year have a long way to go before they reach my target at 4.9%.
The sound of one hand clapping was all that bulls deserved at last week's high. Although the exhaustion spike on Tuesday exceeded a challenging 'external' peak, buyers elected not to take on a second that lay just inches above it. We'll give them the benefit of the doubt nonetheless, since the two-week surge begun from 25.80 was nominally impulsive on the daily chart, and because the surge featured some deftly engineered short-squeeze gaps on the way up. For now, let's kick back and observe price action on the lesser charts. If Friday's sell-off continues, exceeding 29.71 (15-min, a=32.35 on 10/4), that would imply bears are in charge, at least for the near term. ______ UPDATE (Oct 14): GDXJ is close to creating yet another gratuitous hump on the intraday charts, presumably bound for a test of late September's 25.80 low. If you trade this vehicle, here's a chart with a 26.83 target
Gold has impaled a significant midpoint Hidden Pivot resistance at 1686.50 with this morning's strong upthrust, clearing an easy path for more upside to D=1750.70. This tout updates an earlier one that displayed the wrong chart, but it also has given me an opportunity to acknowledge the very bullish price action witnessed in the last two hours. The pattern will yield excellent odds for bottom-fishing any swoons with a 'mechanical' bid, but if the opportunity fails to develop we can still buy on the way up using other tactics (which could conceivably include a small-pattern 'mechanical' entry).
The December contract is headed lower than the 3488.00 target shown, but it still looks like an opportune spot to try bottom-fishing, given the precise bounce from p=3916.88. Sliding the pattern's point 'A' high up to either of two alternatives shown in the chart yields additional downside targets at, respectively, 3401.75 and 3362.00, That last Hidden Pivot support is my worst case for October. However, there is little likelihood the Mother of All Bears will not take a breather at one of those levels, notwithstanding the fact that my expectation is for the S&Ps eventually to fall far beneath the pandemic low at 2174.00. That would represent a further slide of 40% on top of the 25% that has already occurred, but I doubt the bear market will be so kind, since it will be correcting a 30-year spreed of malinvestment. _______ UPDATE (Oct 3, 6:18 p.m.); The 3712 peak of today's powerful short squeeze precisely achieved the D target of this reverse pattern before the futures eased into the close. If they push above the peak tonight or tomorrow, that would activate this bigger reverse pattern, with a 3846.75 target. Notice that its Hidden Pivot midpoint resistance is coincident with the smaller pattern's p. That implies double resistance, and any decisive push past it should be assumed strong enough to reach p2=3778.00 at least. The pattern looks well-suited for profitable 'mechanical' buy set-ups. _______ UPDATE (Oct 7, 9:11 a.m.): Houston we have a problem. The prop-desk drama queens have pancaked index futures ahead of the bell on absolutely meaningless news that the economy added 263,000 "jobs". The fact that this has occurred after the December contract missed achieving my 3846.75 target by 26 points, or 0.6%, is a sign that the bear market is about to resume with full fury.
How refreshing to see the Masters of the Universe choking on Apple shares Friday after efforts to hold the stock aloft until the bell collapsed. The stock finished on the low of the day, presumably bound for a test of June's watershed bottom at 129.04. Expect a tradeable bounce on the way down from the 136.06 Hidden Pivot target shown in the chart. The stock's vertical ascent from mid-June to mid-August never spread to the broad averages. That had been DaBoyz' intention, and it appeared they might succeed when AAPL got within 3.7% of new record highs on August 17. Alas, sustaining altitude until hoards of other stocks caught up proved too challenging, and AAPL began to roll down like an aerobatic plane in a hammerhead stall, Earlier, I described in detail how the stock's canny sponsors levitated it without risking much. This occurred mostly via short-squeeze rallies in thin, overnight markets, and with gap-up openings that allowed instantaneous leaps of $2-$4 on zero cash outlays. This trick will not work nearly as well now because perceptions concerning the company's prospects have darkened with the onset of recession in Europe, a key market. The U.S. consumer economy is close behind, and the one-two whammy is certain to depress sales of the pricey iPhone. Rick's Picks will continue to track AAPL closely and trade it aggressively in both directions. Get AAPL right and you get the stock market right. We've been doing it with consistent precision, so stay tuned. _______ UPDATE (Oct 3, 6:30 p.m.): The algos and hubcap thieves who work the night shift must be tuned to Rick's Picks, since they front-ran my 136.06 target by 34 cents. Ordinarily I would not assume they are on a target of mine like fleas, but in this case the pattern seemed
