Rick Ackerman

I've led the front page this week with an election week scenario that has the E-Mini S&Ps topping at 6102 on or around Election Day. This Hidden Pivot resistance comes from a composite monthly chart, so don't expect resistance precisely at that number. However, the overall look of the monthly chart is sufficiently compelling to warrant a yellow flag when the futures get there. The target lies 4% above Friday's close, 0r 256 points. Coincidentally, a lesser pattern from the daily chart yields an almost a precisely matching Hidden Pivot target at 6102.75. That means double-stopping power, so don't miss the opportunity to get short there if you trade this vehicle. Don't hesitate to nudge me in the chat room for timely guidance.

You can always tell when portfolio managers are hard at play, immersed in an epic circle jerk that has become more tediously familiar with each passing week. And so it went on Friday, as money migrated for no discernible reason from certain, temporarily disfavored stocks to flavor-of-the-day hotties.  It seemed almost as though the chimpanzees who purport to manage everyone's money were on a conference call that morning, scripting a narrative simple enough for Jim Cramer to shill to the legions of widows and pensioners addicted to his show. The Dow was down more than 300 points at its lows, even as the lunatic-sector stocks -- you know them as the idiotically misnamed 'Magnificent Seven' -- winked at the thrashing their poor cousins were getting on less sexy exchanges.  The Naz was borne aloft as always by light volume and timid resistance. Bears evidently were too gutless to resist the uptrend, which in recent weeks has become increasingly confident of a Trump victory. 4% Above Sits Trouble Even so, there is a palpable feeling that the stock market has been nutso for so long that it's overdue for a sea change. That could mean irrational exuberance will peak on or around election day. But Mr Market could also surprise with a rally that turns even steeper than the one that has prop-washed the flesh from sane observers and skeptics. So which? The chart above makes a compelling case for something in-between. The 6102 S&P target lies 256 points, or 4.4%, above Friday's close. It would not be as large a gain in points as occurred in August or September. However, if the top were to coincide with the November 5 election, the entire gain would have occurred in just seven trading days. That looks like a good bet, but I

MSFT would somewhat outperform the E-Mini S&Ps if it achieves p2=444.97 around Election Day. Although the secondary pivot is not as reliable a place to go short against the trend as a midpoint Hidden Pivot, the fact that the 4.4% rally it would take to get it there is so close to my predicted 4% rally in the S&Ps makes the target worth considering as a short. We'll look to buy near-the-money puts with a week or two left on them when MSFT hits 444.97. If you're keen to trade this one, stay tuned to the chat room or your email notifications when the stock gets close.

Last Wednesday's low at 91.66 triggered the 'mechanical' buy that had been noted in the previous tout. Simultaneously, a second such buy signal occurred at the green line (x=93.21) of this smaller pattern. It carries a commensurately smaller stop-loss, but we'll back away from the trade nonetheless, since the pullback to x came after TLT had barely reached the red line. Ideally, the retracement for a 'mechanical' set-up should come from our 'sweet spot', which lies midway between p and p2.

The December contract has been a good bet to reach the 2803.40 target since September 12, when it blew past p=2576.75, retested it a week later, then never looked back. However, the pattern is sufficiently clear and compelling to temper our enthusiasm when the target is reached.  Recall that we have always felt great, looking for more, just as gold was topping. A tradeable high looks likely at 2803 even if it proves not to mark an important top.  We should treat it as such unless buyers impale it on first contact. Alternatively, if the December contract closes for two consecutive days above 2803, you can assume it is bound for at least 2940 (A=1933 on 10/6/23).

Correcting the reverse pattern shown has taken December Silver below the 'hidden' midpoint support at 33.63, implying it will likely require a move down to p2=32.91 for the futures to regain their footing; or even to d=32.19.  In fact, a snap back rally to x=34.35 would trigger a 'mechanical' short, even if my enthusiasm for initiating the trade would not be high. If the retracement does hit d=32.19, though, it would be an excellent opportunity to bottom-fish with a tight stop loss. ______ UPDATE (Nov 2): The futures danced to our beat last week, triggering a 'mechanical' short at x=34.35 that would have evinced little pain. Now they are on their way down to d=32.19 of this pattern. You can bottom-fish with a reverse-pattern trigger that uses a= 33.26 from Oct 25.  That implies a 72-cent trigger interval, but you can reduce it by perhaps 95% by using a pattern from the 5-minute chart or less. _______ UPDATE (Nov 6, 8:26 p.m.): You can still try bottom-fishing using the 32.19 'd' target to set up a low-risk trigger, but this chart shows what to expect if 'd' fails to hold.  Worst case for the intermediate term could be as low as 28.455, but there's no reason to assume it will be that bad unless sellers start crushing p and D/d supports of different degree.

Like gold futures, GDXJ has breached the midpoint support of a reverse pattern of daily-chart degree. This implies it has farther to fall, presumably to at least p2=51.81, but possibly to d=50.55. Since it could find traction in either place, tightly stopped bottom-fishing is advised, especially if you trade this vehicle actively. Alternatively, a rally to x=54.32 would trigger a 'mechanical' signal to get short. It would be more appealing than the one I mentioned in the futures, but the trade should be tied to a tight stop.

Bitcoin is impressive for its effortless glide at ridiculous heights. In retrospect, we can see that its deep-pocketed sponsors used the 2022 crash to accumulate more of the stuff with the sort of bold confidence that is rarely seen in exchange-type markets. Do big banks that have endorsed bitcoin know something? Only that none of them will break ranks by selling cryptocurrency. The reason is that they have little in inventory; it's all just a game to them -- one with huge upside potential if bitcoin ever becomes fungible for small transactions. For the time being, though, it is only a nominally usable form of currency, inferior to credit cards or cash and held almost entirely for speculative purposes. It is just sardines for trading, not eating, as the old joke goes. Considered from a technical standpoint, the weekly chart shows a clear target of at least 81,069, about $7.300 above the record 73,791 high achieved last March. However, the correction has dragged on for so long that I doubt it is merely to support a rally that would achieve only a marginal new high. In any event, bitcoin has been compressing for long enough that it would appear DaBoyz have $100,000 in mind, and my hunch is that they will succeed in moving it there. My forecast for the stock market is not nearly as bullish, and it's difficult to imagine what scenario would drive such a divergence. However, I am not buying the silly notion that bitcoin, which has zero intrinsic value, will replace dollars as the coin of the realm, much less supersede gold as a safe haven when the banking system collapses. If anything, the implosion will forever destroy our misplaced confidence in all types of virtual money.

The Dollar Index didn't so much impale the 103.11 midpoint resistance last week as overwhelm it. This shortens the odds of DXY's achieving our 106.06 target (slightly revised) over the next 3–4 months. It is encouraging to see gold performing so well despite the pressure of a strong dollar, but also scary to imagine the implications this might hold for so deeply troubled a geopolitical world. A clear implication is that Treasury bonds and notes, not wildly popular lately, continue to be a promising place to secure one's savings. ______ UPDATE (Oct 27): Last week's steep rally pushed the Dollar Index toward the 106.06 target much more quickly than I might have expected. If bulls exceed it easily, you can be sure that a test of two important peaks near 107 that were recorded in the past year near is coming.