The modest reverse pattern shown (see inset) gives January Crude an easy path to at least 85.28, a Hidden Pivot resistance that looks obscure enough to short with a very tight stop-loss. An easier opportunity would come on a pullback to the green line (x=76.52), where you could bottom-fish with a tightly constructed 'reverse' pattern. The trade is likely to work best if the pullback is sharp and swift. It would require a stop-loss at 73.59, just beneath the pattern's point C low. I have sketched the retracement with crude pulling back beneath the green line to remind you that it is neither a support nor a resistance, nor a target, nor even a Hidden Pivot (which will always be a p or D level). ________ UPDATE (Dec 6, 8:20): See my 13;22 post and follow-ups in the chat room for a detailed explanation of an on-demand trade that worked nicely in almost-real time. Here's the chart.
The bull trend begun in late October showed signs of getting legs when it closed above the 104.42 D target of the reverse pattern shown. There are no immediate external peaks nearby that we could use to gauge the rally's strength, but we'll continue to monitor its temperature nonetheless using other benchmarks such as the 0.618 Fibonacci retracement level that would equate to a price of 109.67. An easy move through it would signify that buying power has not abated as the rally has progressed. ______ UPDATE (Dec 8, 9:27 p.m.): TLT has pulled back only slightly after topping on Wednesday a penny above the 109.67 Fibo line we were using as a minimum upside objective. It looks like it wants to run higher, but let's wait and see.
The bearish pattern shown in the inset is straightforward in suggesting that Bertie will fall to at least 11,484 before bulls have a chance to turn it around. The precise series of bounces from p suggest the target can be bottom-fished with a tight stop-loss and good odds of producing a quick profit with relatively little risk. In the meantime, a rally to the green line (x=21,774) should be used to get short. The implied entry risk of a little more than $3,400 would warrant a 'camo' set-up to limit theoretical exposure to perhaps $200-$300. _______ UPDATE Dec 13, 10:16): Well, bulls have turned this hoax around, all right, using the increasingly lurid story about the epic bitcoin fraud perpetrated by Sam Bankman-Fried to squeeze shorts. How contrarian! How perverse!. It'll be interesting to see where the whales trapped in this vehicle begin to unload it.
As forecast, the Dollar Index has fallen into the 101.30-104.64 range, presumably bound for the 102.34 Hidden Pivot target shown. If so, this would portend a further easing of pressure on bullion over the next 4-7 days, or however long it takes to complete the pattern. A sharp rally in the meantime to the green line (x=106.58) should be viewed as an excellent opportunity to get short 'mechanically', given the steep pitch of the A-B impulse leg.
Last week's commentary went full contrarian with the seemingly nutty idea that 2023 could be a dull year for investors despite the looming possibility of a global economic collapse. Inflation, deep recession, war, disease and political unrest are just a few of the factors that could bring a badly limping financial system down. But suppose the global picture were to brighten significantly? Consider the possibilities: a senile U.S. president is forced to step down; Putin negotiates an end to a war in Ukraine that has become unwinnable; the nascent rebellion in China is joined by sympathetic soldiers; anti-communism rises up around the world, even in the U.S.; free speech returns on a global swell of popularity; and the content of Hunter Biden's laptop gets fully exposed, rousing Americans to root out corruption at the FBI, State and Justice departments. Rebellion against the globalists and communists is stirring everywhere. All hell could break loose, but a positive outcome is hardly inconceivable. Farmers in Canada, Netherlands and elsewhere could prevail over climate-change zealots who would prefer that everyone eat tofu. Brazilians could stymie the fraudulently elected Lula da Silva from opening Latin America's back door to his Chinese comrades; Italy's new premier, Giorgia Meloni, could bring down the EU by demonstrating that supposedly 'far-right' leaders are actually just mainstream champions of a common-sense path back to economic health. There are also mounting protests against Iran's Islamist dictatorship that could strengthen and spread to the Muslim world. They surfaced last week when Iranian soccer players declined to sing the national anthem at their opening World Cup game against England. The Laptop That Keeps Giving Regarding the world's most infamous laptop, no longer can its incriminating contents be suppressed online or by the partisan hacks who run the New York Times, Washington Post, L.A.
Early in October, it lifted my spirits to be able to bloviate about how a too-widely-anticipated October crash seemed as likely as a Martian invasion. One lunar calendar-based prediction in particular had October 21 as the crash date, although the forecast went squishy at sundown that day when dark clouds failed to materialize over Wall Street. Even so, the trading world remained atwitter about the guru and his earth-shaking prediction until after the election. Now, five weeks later, who even remembers his name? At the time, I made the boldest prediction that a guru can make -- i.e., that nothing even remotely interesting would happen for the foreseeable future. This was going way out on a limb, since we gurus are always expected to predict that 'something' will happen, even if we sometimes wuss out with a 'sooner or later' qualifier. But more months of nothing? Zilch? Nada? When was the last time such a boring forecast was celebrated for its prescience? And which guru made the call? What makes this one so daring, however, is that even the village idiot knows that the global economy is poised to collapse at any time -- perhaps even before you have read this commentary. Bloomberg's A-Team Instead, we have the usual eggheads and Bloomberg regulars debating whether the U.S. is even in a recession. Yes, the pundits nearly always embarrass themselves. All of us can see that tens of millions of middle-class Americans are making the kind of economic tradeoffs that are usually associated with hard times. But perhaps the eggheads have a point, not necessarily on the top of their heads. Maybe things are not so bad after all, and the economy will continue to limp along until the next outbreak of buy-side psychosis strikes the proletarian mind. To assess the
The off-kilter pattern shown, with a weak A-B segment that obscures the chart's 'mechanical' appeal, yields a picture that could provide two trading opportunities as the new week begins : 1) a 'mechanical' buy at the green line (x=4016.75), stop 4001.75; or, 2) a short at D=4061.00 with a stop-loss as tight as 1.50 points. The first looks more appealing but would require a 'camouflage' set-up on a chart of lesser degree to shrink the implied entry risk of $750 per contract. _______ UPDATE (Nov 28, 9:46 p.m.): So much for bottom-fishing at 4016.75, a trade done in by a Sunday night air pocket that turned out to be honest-to-goodness selling. Going forward, use this corrective 'reverse' pattern, to gauge trend strength and trade, since it has profitability going for it, even if achieved under duress. A decisive breach of the red line (p=3938.75) would telegraph more downside top2=3882.94, or even D=3827.00, a Hidden Pivot support that can be bottom-fished with the tightest stop-loss you can craft. _______ UPDATE (Nov 30, 6:52 p.m.): Stocks screamed higher, not because of bullish buying, but because no seller would dare get in the way when the Fed is talking its book. That's how bear rallies work, instantly adding hundreds of billions of 'dollars' to the financial economy without requiring any effort or even bulls to do the lifting. This short-covering binge is bound for at least 4214.00 -- a near-certainty given the way it vaporized the 4064 midpoint Hidden Pivot resistance.
There are bigger 'reverse' patterns with more ambitious rally targets to consider, but we'll start with this modest ABC, since D=104.42 has yet to be achieved. It almost surely will be, though, judging from the way buyers shredded the midpoint Hidden Pivot and kept on going. If this so-far bear rally is going to get legs, we should expect it to take out D with little trouble and to close decisively above it when the week ends.
Friday's high surpassed a look-to-the-left peak recorded a week earlier, refreshing the bullish impulsiveness of the intraday charts. The original chart contained a bad print down at 1719.00, but cleaning it up has produced a serviceable pattern with a midpoint resistance at 1760.30 that can serve as a minimum objective. A further run-up to D=1774.60 would become an odds-on bet if buyers shred their way past 1760 -- or better yet, close above it for two consecutive days. ______ UPDATE (Nov 28, 9:57 p.m.): Here's a fresh chart that salvages a bullish outlook despite today's nasty reversal. It also treats the 1719.00 low of last Wednesday's wack-o downdraft as though it actually happened, which appears to be the case. The chart has signaled a so-so 'mechanical' buy at x=1740.30 (stop 1718.90) off an intraday high that did not quite reach our sweet spot around 1772.00. ______ UPDATE (Nov 29, 11:02 a.m.): Here's an update on that last chart. It shows the February contract with a D target at 1818.50. Precise play off p=1776.00 suggests this pattern will work well for trading and assessing trend strength. It has already yielded a 'mechanical' buy at the green line that could have been worth as much as $2000 per contract overnight.
The December contract exceeded my minimum expectation last week at 21.50, so I've selected a more ambitious rally pattern with a 22.40 target to keep us a step ahead of the herd if Silver continues to rise as expected. A pullback to the green line (x=21.05) would trigger a 'mechanical' buy, but the balky A-B leg argues against trying to get long with a conventional bid and a 20.59 stop-loss. Camouflage may be the ticket, so stay tuned to that chat room if you're interested. _______ UPDATE (Nov 28, 10:03 p.m.): The futures took a $1200 bounce from within a half-cent of the green line, enabling at least one subscriber to report a quick profit in the chat room. Silver's subsequent relapse has muddied the immediate picture and left me with nothing exciting to recommend for today. My 'voodoo number' for a possible turn would be 20.98 -- worth risking no more than 2-3 cents on a stop. _______ UPDATE (Nov 30, 7:12 p.m.): A bullish pattern going back to early November would be superseded by a larger one if this rally decisively exceeds 22.73, basis the March contract, or closes above it for two consecutive days. The new target, a clear and compelling Hidden Pivot resistance, would be at 24.325, shown in this chart.
