AAPL's clever handlers are going to milk every last ounce of potential from this short-squeeze rally, so don't even think about intercepting it until you've made a pile of money on the uptrend. Friday's goosing failed by pennies to impulse above the 'external' peak at 149.77 recorded on May 17, but only because DaBoyz believe they will get more mileage if they complete the job on Sunday night, when sellers are likely to be at their most chicken-hearted. AAPL has been more market follower than leader lately, a sign that fund managers are extremely eager to get this rally rolling even if it lacks some key participants. If the stock catches fire, however, here is a pattern with a 162.12 target you can use to get a tradeable handle on the trend.
Unfortunately for the global economy, crude looks poised to move even higher, to at least the 119.51 target shown. We've been using an even loftier target at 140.12 that's associated with a larger pattern tracing back to 2021. But let's see how buyers handle the lower resistance before we try to gauge the staying power of the rally. The D resistance will be shortable, potentially with a very tight stop-loss, since it can be expected to show precise stopping power similar to what occurred at p=111.38. I recommend the trade if you've made money on the way to the target. _______ UPDATE (Jun 1, 1:38 p.m.): Here's a pattern you can use to get a tradeable handle on crude over the next few days. Notice how it tripped a 'mechanical' winner earlier today.
As the bear market runs its course in the months and years ahead, it will be punctuated by sharp and sometimes spectacular rallies to convince investors the worst is over. That is how Mr. Market will trap most of them into sticking with stocks until the bitter end. For only when the last bull has thrown in the towel and mass capitulation takes stocks down to levels practically unthinkable now can a floor be created for the next bull market. The first such bear rally started in mid-March and lasted for two weeks. It was not particularly impressive because it didn’t have to be: a mere 15-percenter would have pushed the S&Ps to new record highs. The rally failed well shy of that benchmark, however, before a punitive relapse set in. Stocks appear to have bottomed last week, but not before piercing a Hidden Pivot support that should have held if the current rally is going to achieve new highs. Last week’s commentary was skeptical that the rally would retrace fully half of the downtrend since the bear market began on January 4. That would equate to a top near 4300 in the S&Ps. Using the recent low at 3807, there is now a technical basis for a more confident and precise forecast. Specifically, the S&P 500 appears bound for a minimum 4305.50, basis the June E-Mini contract. The futures look all but certain to reach that number, given the way they impaled the ‘midpoint Hidden Pivot’ at 4056 toward the end of last week. Less certain is that the rally will end there. Indeed, if it blows past 4305, that would suggest Mr. Market has nastier plans for bears who may have overly enjoyed the April/May plunge. Not Quite Impossible Will the rally achieve new highs? I strongly doubt
I am unable to find the pattern shown in Edwards and Magee's supposedly definitive book on technical analysis. None of their wedges, pennants, channels, flags or triangles exhibit the seeming power of this one, with its rising whatchamacallit juxtaposed against Q1's mountainous upthrust. There may be no precedent for such a globally important commodity as crude oil exhibiting this kind of behavior. But could the rally simply reverse nonetheless, sending quotes plummeting to levels that would be commensurate with the worldwide recession/depression that is brewing? I have been conflicted over this question, having argued both sides of it in recent commentaries. For the sake of clarity, however, I will treat the chart as I would any conventional ABCD, relying mainly on price action at the midpoint Hidden Pivot, 114.33, to tell us what is going on. It may turn out that last week's high, which fell 1.04 shy of C-D's midpoint, will turn out to have been an important top. If not and the futures popped through it this week, that would reinforce the case for a continued rally to as high as 140.12. Since that seems impossible with the current collapse in China's manufacturing sector, it can only imply, as I noted here earlier, that a catastrophic disruption in supply is looming. _______ UPDATE May 26, 5:42 p,m.) The futures poked slightly above the 114.33 midpoint resistance, but this is not technically significant. Let's see what the next day or two brings.
There is nothing exceptional about the pattern shown -- except that this is not the bearish chart of some $50 stock, but rather a tradeable proxy for vast sums of money. Size should have no bearing on the odds of a further fall to D=3650.25, implying that vast additional sums of money are likely to vanish shortly from the ether of the global financial system. The week ended following a stab well beneath a major downside target at 3850.00. Although a vicious short squeeze to 3902.00 reversed the loss, the technical damage is irreparable and implies a continuation of the downtrend. The steepness of the squeeze has made Sunday's opening unpredictable, even if we 'know' this rally will be a short sale at some point. Also, p2=3761.44 promises to be an opportune spot for bottom-fishing when it is reached. ______ UPDATE (May 23, 8:15 p.m. EDT): Use this reverse pattern, with a 4048.50 target, to exploit this vehicle. An overnight pullback to the green line would signal a 'mechanical' buy, stop 3808.50, but you could attempt it at p=3928.50 if your 'mechanical' chops are up to speed, _______ UPDATE (May 24, 6:54 a.m.): Hard selling overnight has pushed the futures down as much as 60 points, but there was no 'mechanical' buy at p because the rally never reached p2 first as required. The bottom-fishing tactic is still valid at x=3868.69, but because it carries theoretical entry risk of $3,000 per contract, I'd suggest the trade only if you're able to cut that to $300 or less. If I'm in the chat room when the trade ripens, and it will, I'll provide explicit details for effecting a camouflage entry. ______ UPDATE (May 24, 9:38 p.m.): We missed a nice trade when the futures plummeted 66 points in the early going but failed
Last week's plunge generated an impulse leg of weekly-chart degree, implying that any rally will be merely corrective and an opportunity to restock short positions. The bounce came off a low less than a dollar from the 131.81 target we'd been using to nail the bottom. The pattern in retrospect was far too obvious to have worked as precisely as we've come to expect. Increasingly gnarly ABCD patterns will continue to serve us for trading and forecasting purposes, but it's clear that the whole world is now front-running obvious targets. Looking just ahead, AAPL would need to pop above 141.56 to become impulsively bullish on the hourly chart. ______ UPDATE (May 23, 8:22 p.m.): The stock is headed most immediately for the 145.96 target shown in this chart. There have been no pullbacks sufficient to trigger a 'mechanical buy, but the pattern is gnarly enough to produce profitable results no matter how you use it. ______ UPDATE (May 24, 9:57 p.m.): Buyers failed so miserably to fulfill the promise of the bullish pattern linked above that AAPL could weigh on the market Wednesday. Let's move to the sidelines for now. _______ UPDATE (May 26, 5:56 p.m.): This time it was the stock market dragging a punk-looking AAPL higher rather than the other way around. If the stock gets in gear, the broad averages look primed to soar.
The shallow correction off a targeted high at 1846.00 portends another burst of strength this week. That's assuming one of gold's notorious mood changes doesn't occur when trading resumes Sunday evening. A strong upthrust should be presumed bound for the 1894.80 target shown in the chart. This is a 'reverse pattern,' and levels 'p' and 'x' should be suitable for bottom-fishing with 'mechanical' bids. Stay tuned to the chat room and keep email notifications switched on if you want to stay apprised. ______ UPDATE (May 25, 4:20 p.m.): The burst of strength has turned leaden. We won't give up on this glue horse yet, though, since it may simply need to consolidate for a bit longer after last week's sprint.
A pattern identical to gold's projects a rally to as high as 22.88 over the near term, although the latter has performed more bullishly recently. There have been no 'mechanical' buying opportunities since the futures bottomed ten days ago, but one would be signaled on a pullback on Monday to x=21.03. Bulls should be careful near 'D', since the target is sufficiently compelling to suggest a short-able pullback will occur there.
The dollar bull is showing signs of fatigue, so let's be ready for the first major correction in more than a year. It would not likely diminish prospects for an eventual move to the 112.14 rally target shown in the chart. However, DXY may first have to come down to the green line (94.22) before it has fully corrected the bull market begun in 2014. A plunge of that magnitude would undoubtedly be read by economists and pundits as a phase in the dollar's demise, but it would actually make the greenback a screaming 'buy' from a Hidden Pivot standpoint.
Although we might have expected Bertie to get some respite after completing a head-and-shoulders pattern over the last ten months, it is instead breaking down again. Mid-May's breach of an important Hidden Pivot midpoint support at 31,434 hinted that bitcoin's long dirge since peaking near 70,000 last November is not over. However, the May 12 stab beneath the H&S pattern's 'floor' implies things may be even worse than they had seemed. Accordingly, we'll stick with the 14,751 target for now while allowing for the possibility of a tradeable bounce from p2=23,092. For now, you can use that secondary pivot as a minimum downside target. _______ UPDATE (May 31, 11:03 p.m.): Bertie's bullish wilding spree may have seemed impressive, but it noticeably failed to exceed the middling 'external' peak shown in this chart. This is a subtle sign that the rally is unlikely to get legs, so be prepared.
