Although crude oil is certainly tradable using Hidden Pivots, it rarely traces out patterns that I like. This one is an exception, however, and it promises to do everything we might ask of it. That means: 1) providing a good 'buy' signal at x=73.83, which it has already done; 2) offering a tightly stopped short at p=75.34; 3) making a move to D=78.37 a high confidence call if p is penetrated decisively; and 4) yielding a high-odds 'mechanical' buy at the green line if a pullback to it should occur from in-between p=75.34 and p2=76.86. Are you ready for this cornucopia of opportunity? _______ UPDATE (Jun 23, 7:25 a.m. EDT): The futures gapped explosively to within three cents (0.03) of the 78.37 target I flagged above as a good bet. If you took that bet and then got short at the target with a stop-loss as tight as a nickel, you could have caught and up and down ride worth as much as $4,000 per contract.
We've been in a tug-of-war with this rabid weasel, hoping against hope that it will get just a teensy comeuppance -- a fake one, admittedly -- with a feint below the grandiose 100,000 level. Saylor et al. must be quite pleased that there are no serious sellers in this vehicle, let alone short sellers. Holding it aloft is as easy as keeping a beach ball afloat in a swimming pool. My downside target remains 97,616 nonetheless, but in the meantime, I see a possible bottom-fishing opportunity at 102,053, a proprietary 'voodoo' support. This is a slight revision of a 101,174 correction target given earlier. Risk no more on the stop-loss than you would on a 20-to-1 filly that had a promising morning workout. ______ UPDATE (Jun 24, 9:52 a.m. EDT): Looks like Sunday's print at 99,039 will be as low as this charmless little hoax will go. I haven't given up on the 97,616 target, but we should put it aside now for the sake of practicality. The next stop on the way up will be at 109,243 (corrected upward on 6/24 at 3:08 p.m. EDT), my minimum objective at the moment.
This symbol has tracked my forecast for the last couple of weeks, but what now? Up or down in the week ahead looks like a coin-toss at the moment, but if rates break lower, expect them to fall to at least 4.278% (p2, the secondary Hidden Pivot), and to take a tradable bounce from that number. Best case (for borrowers, that is) would be for further slippage to d=4.161%, which presumably would be signaled by a decisive breach of p2=4.278%. Alternatively, if rates move higher, signaled by a two-day close above 4.439%, look for a move to 4.559%.
I've masked the proprietary origins of the 3326.40 target shown, but suffice it to say it is the 'd' Hidden Pivot target of a big 'reverse' pattern. However you slice it, it looks like a promising spot to try bottom-fishing with a stop-loss as tight as 1.50-2.00 points. It can also be used as a minimum downside objective, since the 'd' target of a smaller reverse pattern was exceeded on Friday. The overshoot was just a point or two, but that is enough for us to infer that more weakness is coming. We used a similarly derived target last week to get aboard a $33 upthrust within $2 of the low. Gold has been equally nasty toward bulls and bears alike over the last two weeks, but if it breaks the 3326.40 support easily, it is bulls who are likely to get flayed -- all the way down to as low as 3251.40, or even 3176.40. I'm not saying much about the bullish case because gold has been such a little sonofabitch lately, but if it surprises by heading higher Sunday evening, look for a run-up to at least 3437.80, the midpoint Hidden Pivot resistance of a conventional pattern on the hourly chart (A= 3313.10 on 6/8). A close above that number would indicate still more upside to at least 3519.40. My longer-term projection is quite bullish and calls for a rally to 3695.30. _______ UPDATE Jun 24, 10:12 a.m. EDT): The futures have breached a would-be concrete midpoint support at 3326.40, and that means they are likely to fall to at least 3251.40; or, if that Hidden Pivot support fails, to a worst-case 3176.40. Either number can be bottom-fished aggressively, provided you have the chops to limit entry risk to no more than $250 per contract. Here's the chart.
July Silver aborted a textbook 'mechanical' buy at 36.349 last week, a sign that there is something wrong below the surface despite the 12% rally in June from 33 to 37. Perhaps bulls just need a breather? SI is notorious for reversing after stopping out previous highs and lows. This is what it did on Friday, bouncing 50 cents after dipping a couple of ticks beneath the 35.580 low recorded on June 12. However, I doubt the reversal will get legs, since the move following the breach of a too-obvious support. We'll give it the benefit of the doubt nonetheless while stipulating that the uptrend must surpass three small peaks, the highest of them at 37.045, to regain our respect.
The rally has sputtered out in a bad place, more than a little shy of the 74.87 target I'd flagged. I still expect that Hidden Pivot to be achieved, but we will need to be careful about where we re-board or augment long-term positions. For now, I'll suggest bidding 66.14 with a stop-loss at 63.23. This is a textbook 'mechanical' buy, but it is somewhat riskier than attempting it at the green line (where a 57.40 stop-loss would apply). If it comes down to that, we should initiate with a 'camouflage' trigger. This means using a pattern of small degree to signal a 'buy' at its point x, 25% along the C-D leg.
The 96.36 downside target we've been using remains viable. The current, countertrend move would need to surpass the 'external' peak at 100.54 recorded on May 29 to imply the long-term downtrend may be about to change. Even then, that would generate a 'mechanical' sell signal that we would likely ignore. More immediately, anything above 99.39 early in the week would be a faintly bullish sign.
Tulipmania and the South Sea Bubble have nothing on the bunco game Wall Street has been running with Microsoft shares. I write on this subject often because the numbers are so huge, and because the game, which is intertwined with the biggest financial con-job in history, is not one you will ever read about in The Wall Street Journal or on Bloomberg.com. It thrives on the madness of crowds and grows bigger with every uptick in MSFT and the galaxy of stocks in its vortex. Microsoft's share price has gone from 393 to 483 since April, adding roughly $687 billion to the macro ledger. That is twice the size of California's budget for 2025. It would buy a Porsche 911 for every man, woman and child in New York and Chicago, or a super-deluxe Disney World vacation for every family in America. A clue to how the game works lies in the relentless smoothness of MSFT's ascent. You could comb through a thousand charts without finding one remotely like the one pictured above. You don't have to be a technical analyst to see that the long rally has been tightly controlled every step of the way. This kind of price action is quite rare, but what makes it extraordinary is that it is not happening to just any stock, but rather to the most valuable stock in the world, a $3 trillion company with a lock on the operating systems of a billion-and-a-half desktop computers. The stock has been ratcheting higher on relatively thin volume and a dearth of bullish buying. Short-covering has done most of the lifting, with more urgency and power than merely optimistic investors could ever supply. Ka-Ching! MSFT's manipulators knew what they were doing when they goosed the stock into a sensational short squeeze on April
There were few headlines out of the Middle East over the weekend, mainly because only Israel and Iran are capable of judging the damage, and neither is saying much. Wall Street, on the other hand, seems quite confident that whatever is happening, and irrespective of the outcome, it will be quite bullish for stocks. As much was evident on Friday, when the lunatic sector (aka 'the Magnificent Seven') bounced back from heavy losses early in the session, then spent the remainder of the day building a plateau from which stocks can launch anew when the all-clear signal comes. This would be appallingly reckless behavior, but we have become used to it as the stock market has increasingly decoupled from geopolitical and even economic reality over the last decade or so. It's possible investors are simply envisioning a brighter tomorrow, with Iran no longer able to export terror to the world. China and North Korea will continue to threaten, of course. But their ability to spread malice and death will be significantly impaired once Israel has cut off the arms and legs of their Iranian proxies. Jihadism will still be with us, and active to the extent its chief sponsor, Qatar, has plenty of crude oil to sell. But perhaps with the inspiration of nuclear terror in remission for a few years, and an entire generation of jihadi leaders rubbed out by Israel, the world might enjoy a period of relative peacefulness. How odd would that be? [Check out my latest interview on This Week in Money. It delves into the mania that has seized investors in stock and real estate assets.]
The futures ended last week's sprightly death dance poised to move higher as soon as Wall Street gives the all-clear for nervous Nellies worried about the war between Israel and Iran. Although the September contract hasn't signaled a certain move to the 6358.00 rally target, it has shown enough buoyancy to make a pullback to the green line (x=5948.00) an enticing buy with a 5811.00 stop-loss. Use a 'camo' trigger to cut that down to size so that theoretical entry risk is no more than $175 per contract.
