The 4109.00 target for the December futures (see inset) replaces one at 4090.63 that was tied to the expiring September contract. The target is a midpoint Hidden Pivot, and it can be used on Monday as a minimum upside objective. If it gets blown to smithereens -- which seems likely, given the vicious short squeeze we saw on Friday -- that would put D=4317.00 in play as no worse than an even bet to be reached. 'Mechanical' trades triggered on the hourly chart seem highly likely to work, given the power of the impulse leg and the no-nonsense look of the pattern itself. We won't necessarily have to wait for a dramatic swoon, since small-chart 'camouflage' set-ups along the way can get us aboard practically at will with risk tightly controlled. Stay tuned to the chat room if interested.
The last time gold slipped into a discomfort zone was the third week in July, just before it trampolined from the tiny space between two important lows on the weekly chart (see inset). It is probably fixing to do something at least as irksome now, presumably by bouncing with equal or greater ferocity from somewhere beneath the breakdown line shown in the chart. My hunch is that this will not occur following a merely marginal penetration of the line, but rather from either p2=1671.10 or D=1619.90 of this pattern. Use the former for now as a minimum downside target. And yes, just in case, we should allow for the vexatious possibility that, with no breakdown at all, the low is already in. We cannot be fooled about this if we monitor impulse legs on the lesser charts for the next couple of weeks. ______ UPDATE (Sep 12, 10:09 p.m.): My distrust of this rally is so intense that we'll need to judge it strictly by-the-book. That means we can at least withhold our enthusiasm until such time as the 1757.90 'external' peak created August 28 on the way down is exceeded. _______ UPDATE (Sep 13, 7:03 p.m.): Gold is looking so atrocious that a reversal from near 1700, where three lows have occurred since July 21, seems assured. Anything in the range 1699.60-1703.10 will be in the discomfort zone and therefore opportune for bottom-fishing with a tight reverse-pattern. ______ UPDATE (Sep 15, 4:14 p.m.): It's getting ugly. Sellers drove gold through the round number 1700.00 with such ease that it became resistance before it even had a chance to be tested as support. Shifting to the weekly chart yields a new downside target at 1619.90, a Hidden Pivot that can be used as a minimum downside projection if p2=1671.10 doesn't hold.
Rallies from midway between p2 and D in patterns as obvious as this one usually go further than we tend to imagine initially. Keep in mind, though, that if they reach the green line -- in this case x=21.310 -- that would trigger a 'mechanical' short with excellent odds of producing a profit. We'll go with the flow in any case, which means that the 16.84o downside target will remain our minimum, short-term downside objective unless last week's modest bounce exceeds the 'external' peak at 18.80 recorded August 16 on the way down. _____ UPDATE (Sep 12, 10:17 p.m.): Today's lunatic leap has energized the bullish case while demoting the use of x=21.31 to get 'short' mechanically. I'm in wait-and-see mode, waiting for a sign of whether the rally is for real. ______ UPDATE (Sep 15, 4:19 p.m.): The 'mechanical' short is viable in theory, but I'm going to pass it up. A close above x=21.31 would hint that the really IS for real.
AAPL's quasi-criminal handlers created a bullish impulse leg on the daily chart Friday in the usual way, with a short squeeze on a volume-less opening bar. We'll respect the uptrend but trust it only as far as we could heave an anvil. In this case, that implies looking for a short-able top, or perhaps just a stall, at D=158.37 of the modest reverse pattern shown. If the stock pops above it there will be three opportunities for DaBoyz to increase the putative strength of the rally by exceeding each of the 'external' peaks nearby, the highest of them at 162.61 on August 29. ______ UPDATE (Sep 12, 10:51 p.m.): This is the steepest short-squeeze DaBoyz have managed since late July, and it has turned the hourly chat robustly impulsive. That implies it is not going to simply roll over and die, especially in answer to your prayers, and that any pullback must be regarded as corrective and therefore a buying opportunity. _______ UPDATE (Sep 13, 7:07 p.m.): Although AAPL might seem to have trashed my last update, that won't inhibit me from attempting to bottom-fish with a tight reverse-pattern 'C' anchored at 151.74. In any case, I wouldn't count out the scumballs who make their living by simply shaking this stock down and then running it back up on zero volume -- just as they've done hundreds of times. ______ UPDATE (Sep 16, 12:31 a.m.): After plummeting in the early going, AAPL got its best bounce of the day off 151.78, four cents from the number drum-rolled above. No one mentioned doing the trade, so I didn't track it. The subsequent relapse took the stock from 154.30 down to 151.58, and thence to 151.11 in after-hours trading. If AAPL continues to fall, use 148.58 as a minimum downside objective and a place
I'll leave crude on the core list for now because it is such an important commodity. However, I will provide trading guidance only if it is explicitly requested for charts posted by subscribers in the chat room. The pattern in the hourly chart shown was validated by Friday's stall almost precisely at p=86.89. As always, a decisive move through it, especially if it occurs shortly after first contact, would portend more upside to, in this case, at least p2=89.74; or if any higher, to D=92.58. _______ UPDATE (Sep 16, 12:46 a.m.): Use D2=77.75 shown in this chart as a minimum downside target if crude relapses.
Friday's gap-up rally exceeded by a few cents a minor 'D' target at 31.05 that I'd flagged here earlier. This is mildly encouraging, but check out the weekly chart (inset) for perspective. Even if the uptrend were to continue a further $4, exceeding mid-June's 'external' peak at 35.26, the move would still be $7 shy of creating a bullish impulse leg on the weekly chart. That is what we should require if we're to infer that the bear market begun from $66 two years ago is over. From a trading perspective, however, our short-term bias should wax aggressively bullish if and when buyers push this sack of lug nuts above the 'external peak at 31.35 recorded on August 29. _______ UPDATE (Sep 16, 12:57 a.m.): This pattern, with a worst-case target at 23.60, seems to be working, although an opportune 'mechanical' short on the run-up to the green line failed by a hair to trigger. ______ UPDATE (Sep 28, 10:40 p.m.): The most powerful one-day rally since May was impulsive on the lesser charts but not very, since it exceeded only a single, minor 'external' peak on the 30-minute graph. After an engineered short squeeze on the opening bar, GDXJ spent the rest of the day slogging into a gap from last Friday, but it would need to surpass the 30.28 peak recorded two days earlier to start looking impressive.
Leave it to the pundits to tell us what the hell the stock market was celebrating on Friday. The FAANG stocks inspired an inexplicable rampage, just like in the good-old days, and everything seemed right with the world. In the view of those anointed by television producers to make sense of Wall Street's non-stop nuttiness, it is always the central bank's seeming intentions that have caused shares to move, whatever the direction. This is occasionally true, but the tortured reasoning it requires to flesh out the point hardly satisfies skeptics who see a world in meltdown. Shouldn't shares be falling steeply in order to discount the growing unlikelihood, if not to say impossibility, that the U.S. economy will ever return to normalcy, whatever that might be, let alone to good health? There are so many gangrenous appendages in the all-important consumer sector, for one, that it is reasonable to speculate that Amazon will be the only retailer left after this so-far wishy-washy recession turns lethal. The Simple Explanation For the record, there is a simple explanation for the sharp rally that ended the week, and it is this: Every trader on the planet came to his desk Friday morning eager to short every uptick. And so they did, creating perfect conditions for a short-squeeze that put stocks relentlessly on the rise until 15 minutes before the final bell. What happened then underscored the quasi-criminal nature of the game: stocks dove, but only far enough to sodomize holders of call options who were doubtless counting their chickens. Some would have been holding Chipotle 1725 calls that had fluctuated intraday from $5 to $15 and were worth $8 at 3:46 p.m.. Sitting pretty, right? In fact, the calls went to zero in the final 14 minutes when CMG mysteriously plunged to 1723.
I've arbitrarily selected the bullish 'reverse' pattern shown because today's rally triggered a buy signal that allows a projection of p=110.94 as minimun upside for the bounce. Other such signals have failed, but this happened when TLT was not looking quite so dismal. The ETF proxy for the long bond has been looking so bad, actually, that giving it the benefit of the doubt for once in a rare change seemed like the decent thing to do. Don't pass up an opportunity to get long 'mechanically' if TLT pulls pack to the green line after hitting our sweet spot between p and p2. _______ UPDATE (Sep 8, 9:55 p.m.): Wow. The imminent failure of the buy trigger noted above is impressive, even if we already knew that every conceivable factor acting on the long bond is bearish right now. No question, investors take the fraudsters at the central bank more seriously than your editor. Wll TLT ever rally? Stay tuned.
After stalling briefly at p=18.27, the December contract is trying to turn it into support. By merely closing above the midpoint pivot, however, the futures have made p2=18.53 no worse than an even-odds bet to be achieved. A pullback in the meantime to the green line (x=18.00) would trigger an attractive 'mechanical' buy; stop 17.73. The implied $5400 entry risk on four contracts warrants a 'camouflage' set-up on the 15-minute chart or less to reduce the theoretical risk by at least 80%.
The impulse leg shown is such a killer, having exceeded two major 'externals', that two outcomes seem quite likely: 1) the rally will reach p=4090.63 at least, and probably p2=4194.19 or even D=4297.75 eventually; and, 2) any 'mechanical' buy that triggers on the way up is a good bet to produce a profit. The Catch-22 is that the steepness of the ascent won't likely allow the one- or two-level pullbacks needed to trigger 'mechanical' entries. That doesn't mean we can't play, only that we'll need to improvise to get aboard more or less risklessly in unconventional ways. _______ UPDATE (Sep 8, 10:20): Today's headless-chicken price action created this conventional sub-pattern, which remains usable. Notice the $10,000 'mechanical' winner (on four contracts) triggered around mid-session by the gratuitous swoon to the green line. Now, a decisive thrust through D=4042.50 would reaffirm the ease with which this rally will reach p=4090.63.
