Buyers' wilding spree on Friday was even more impressive than in gold. Accordingly, you should use the bullish 'reverse pattern' shown to get long with risk very tightly controlled. Buying should be done on a pullback to p=19.03, stop 18.90, much just as I've advised in December Gold. However, please be aware that you can cut risk even more by setting up an rABC trigger on a lesser chart, with the 'c' low anchored within two cents of p. The midpoint pivot shown is tentative and would change if December Silver moves higher Sunday evening, but the 'conventional' stop-loss would remain fixed nonetheless at 12 cents below the final p used for entry. This trade is easier than it sounds, but it is recommended only for subscribers who have been attending Wednesday tutorial sessions and understand how rABC set-ups work. _______ UPDATE (Oct 24, 5:02 p.m.): See my chatroom posts and chart from 9:55 a.m. Tuesday morning. _______ UPDATE (Oct 27, 7:24 p.m.): December Silver appears to be dragging itself kicking and screaming toward the 20.85 Hidden Pivot target shown, but what a mess!
The futures would trigger an appealing 'mechanical' short if this bounce hits x=88.95. The 'conventional stop-loss would be at 92.24, implying a little more than $13,000 of theoretical entry risk on four contracts. That's why I am recommending this trade only if you know how to fashion a 'camouflage' trigger to reduce that to $600 or less theoretical per contract. I'd suggest paper-trading otherwise so that you can see for yourself not only how 'camouflage' works, but how consistently. ______ UPDATE (Oct 24, 6:25 p.m.): Cancel the trade, since the futures are taking too long to reach the green line (x=88.95). There's not much to say about the trend, since there hasn't been a trend in more than three months.
The dollar tripped a 'mechanical' buy signal on last week's pullback to the green line (see inset), but it came off a high that fell short of our sweet spot midway between p and p2, and that's why I'm not recommending aggressive action. My gut feeling is that the signal will produce at least a one-level move from x to p, but my still-bullish long-term forecast for the dollar implies that the bounce, if there is one, should do better than that. Alternatively, if weakness stops out the pattern's 'C' low at 110.06, that would suggest a more significant correction lies ahead before DXY can blast off for D=117.16 or perhaps higher. _______ UPDATE (Oct 27, 12:16 a.m.): I expect the Dollar Index to take a potentially tradable bounce from exactly 109.28, the 'D' target of this pattern.
Buyers impaled the green line (x=29.26) with such force on Friday that I've used a conventional pattern to project higher prices. Critical resistance lies at p=30.90, and we'll need to see how bulls handle it before we extend the bullish outlook beyond mere conjecture. If they can close GDXJ above it, however -- ideally on the same day they've hit it -- we could expect more upside to at least D=34.17.
The seemingly strong rally that ended the week merely balanced out three days of bland weakness that had preceded it. In the S&P 500, the upthr ust steepened by the hour but ultimately failed to surpass any important prior peaks. The bear seems out to challenge bulls and bears alike with its obviousness. For one, most of the larger trend moves of the past two months have been reversals off price spikes outside regular hours. And for two, middling ABCD patterns in stocks and futures are finishing at their 'D' targets with predictable regularity. That sums up last week's kabuki in the E-Mini S&Ps, when they head-butted the 3777.00 'D' target of a large 'reverse pattern" repeatedly, only to die a hair short of it at the bell. Docile Sellers Sellers have been particularly docile for more than a month, allowing DaBoyz to twiddle their thumbs until optimal short-squeeze conditions surfaced. Sometimes news was the catalyst, although there seems to be no such thing as bullish or bearish news -- only news to spike the market whichever way seems most opportune at the time. Friday is DaBoyz' favorite day, when half-hearted selling is easily reversed with rallies that gain momentum as the day wears on. That's because no one wants to go home short over the weekend on a day when bears have looked anemic. And so it goes for a bear market that seems destined to become the granddaddy of them all: weeks-long stretches of price action so tedious and haphazard that predicting a Sunday evening opening, or the reaction to Fed 'news' or to earnings announcements, has become a coin toss even for diligent chartists. All bear markets have a touch of Frankenstein in them, but this one's nasty sense of humor promises to be something to endure.
TLT's decisive breach of the 97.19 midpoint support earlier this week (see inset) implies it will continue falling to at least 86.48, or perhaps even to 73.69 if that secondary Hidden Pivot support fails. These numbers correspond on the weekly chart to 30-Year interest rates of, respectively, 4.20% (achieved today, presumably slightly out-of-synch with TLT) and 4.65%. That last number, my worst case, is lower than the 4.90% I'd estimated earlier, but it appears to be a good target for a potential top. _______ UPDATE (Oct 24, 4:32 p.m.): I hadn't noticed this pattern earlier, but it is mildly promising for a temporary bottom at D=91.77. This Hidden Pivot target was effectively fulfilled with today's 91.85 low, but there was little to encourage in the so-far weak bounce that has followed. The pattern was confirmed by the precise bounce from p=98.32 which would have made today's price action worth bottom-fishing.
The spread between permabulls and permabears is at an extreme these days, even for October. This is the month when pessimists' hopes are highest that an epic bear market will correct dangerous excesses that have been building up in the financial system for more than 50 years. A presumptive and welcome side effect of such a crash is that it would reset things in accordance not with the designs of nefarious plotters, schemers and conspirators who meet every year in Davos, but in a more natural way that inflicts pain on borrowers and financial evildoers more or less in proportion to their sins. We permabears should be careful what we wish for, however, since deep hardship affecting the broad middle class, the poor and even the very affluent could persist for a long time -- perhaps a decade or more as occurred after the Crash of 1929. It is particularly troubling to consider that it took a world war in which 50 million people died to end the Great Depression rather than persistent fiscal and monetary meddling by the government. Anyone who thinks the Fed will ultimately lift us from the economic abyss into which we are about to descend should recognize that it is the banksters who will have put us there. The Death of Wokeness Meanwhile, it is unsurprising that some top technical forecasters disagree vehemently over what lies just ahead. One who sits in the pantheon of chartists says that, for cyclical reasons, the stock market is about to embark on a major rally. A colleague achieved instant success -- soon to become notoriety? -- with his own cycles-based forecast calling for a crash starting this week and continuing until the November election. Although I fear that a severe crash is coming that will tip the U.S.
Mr Market screwed with bulls' and bears' heads Friday, falling steadily and hard after making an intraday high just ahead of the opening bell. In the chat room, we anticipated this with jackpot bet recommendations in AMZN in AAPL that involved the purchase of puts early in the session. There were no significant rallies intraday, nor even the customary attempt by DaBoyz to put the squeeze on shorts in the final hour. Although this would have caused bulls to back away rather than gamble on a felicitous opening Sunday evening, the futures paradoxically would have generated an attractive 'mechanical' buy signal if they'd sold off even harder and reached the green line at 3564.00 (see inset). That's what I am recommending, provided you're comfortable enough with 'reverse-pattern' trades to set up this one with entry risk held to no more than $150 per contract. A conventional entry, bidding at x with a stop at 3501.75, would not be appropriate because the initial risk would be around $3100 per contract. I am aware that many are bracing for a possible crash this week based on the widely circulated prediction of a guru who uses the lunar calendar. I doubt he'll be right, since forecasts that get as much attention as this one seldom pan out. For my part, I can see more downside to only 3361.25 over the near term, but my outlook would darken if that Hidden Pivot support is easily breached. I have been saying stocks are primed for a severe crash that could begin at any time (although probably not next week for the reason given). The first sign of this would appear if, as noted above, the 3361.25 'hidden' support is easily exceeded, especially on a closing basis soon after it is initially touched. Regardless, this number
Last week's low just pennies beneath my 134.59 target would be an unlikely place for a good bottom, as a glance at the chart suggests. The stock will want to test the June low at 129.04 to bolster confidence for the next significant bear rally. We'll be on the alert to catch a ride north, but it's liable to take work and patience, since AAPL could noodle around down there for days or even weeks, stopping out bulls with so many false starts that they'll eventually give up. There's $9 of potential downside to exploit along the way, but that too will require close monitoring of the lesser charts. A 'voodoo' number at 131.41 looks promising for catching a tradeable bounce, so be ready when AAPL gets there. ______ UPDATE (Oct 17, 9:05 p.m.): AAPL's opportunistic leaps on the opening are by now so familiar that we should be shocked if DaBoyz ever attempt this money-saving trick with honest-to-goodness buying. Today's headbutting precisely at p=142.74 confirmed the pattern and its target, 147.19. Consider it a done deal if buyer's fist-pump their way past p, especially in the early going. An unexpected pullback to x=140.52, the green line, would trip an attractive 'mechanical' buy, stop 138.28. _______ UPDATE (Oct 18, 8:40 p.m.): The stock's handlers let go of the leash, but it only seemed like they'd lost control. AAPL finished with a riskless/costless gain, leaving a classic 'mechanical' buy at the green line. I must confess that I was elsewhere at the time.
Don't get your hopes up that gold is going to make an important bottom any time soon. It had a chance to do so with the robust leap it took on September 28 from within a millimeter of the 1619 Hidden Pivot target shown in the chart. But the subsequent rally, which took a week to play out, fell just shy of a 1646 peak recorded three weeks earlier, narrowly failing to create an impulse leg of daily-chart degree. It would have been the first such occurrence in eight months and a welcome sign for beleaguered bulls. Alas, more disappointment seems likely if the December contract drops below 1619. That would turn the would-be impulse leg into a merely corrective one, sending gold groping for a bottom at, best case, 1600.
