ES will become a juicy 'mechanical' shorting opportunity when it hits the green line (x=5194.50), probably on Monday or Tuesday. Entry risk is $7000 per contract, so the trade is suggested only to subscribers who know how to set up a risk-averse, 'camouflage' trigger. I posted an equally appealing trade on Friday, based on a pattern that was gnarly perfection. Unfortunately, I neglected to consider that AAPL's earnings were due out after the close. Ordinarily, I would say the pattern should have 'known' that the company was going to announce a $110 billion buyback that would send the S&Ps, if not the stock itself, into a rabid, short-squeeze. AAPL's reaction so far has been a relatively modest 7% gain, although it's possible DaBoyz will milk the news to produce yet more unearned 'wealth' when stocks start to trade Sunday night. So how did AAPL trash a bet-the-farm trading pattern? I don't know, but the short from the green line that triggered on Friday was performing well until the news hit moments after the bell. If the stock had moved lower, I'd have bet the ranch bottom-fishing the 'D' target as well. The lesson here is that we should be very careful about taking positions ahead of the close, especially if one of the biggest-cap companies in the world is about to report earnings. You should take a close look at the pattern posted in the chat room nonetheless, since it is as fine a specimen of 'gnarly' as I could imagine -- one that should work for you most of the time.
The bullish reverse pattern shown implies that the rally that ended the week is bound for a minimum 421.63 -- still somewhat shy of a major Hidden Pivot resistance at 430.58 that has capped AAPL's bull market since mid-March. We'll wait to see how buyers handle the resistance before we infer that new record highs are coming. If so, let's be alert to the possibility that a marginal feint into record territory would fake out enough bulls and bears to set up a hellacious dive similar to one in IBM that I featured here a while back.
June Gold ended the week in a dither about what comes next. Three marginal penetrations last week of the p midpoint support implied that sellers lack the conviction to push the futures down to D=2235.70. We'll be better able to judge their mood and capabilities after we've seen how the markets open Sunday evening. In any event, it would take a decisive push above C=2364.40 to suggest bulls have the wattage to take out mid-April's record peak at 2448.80.
Last week's tedium left July Silver with somewhat further to fall before sellers are likely to exhaust themselves. Specifically, the futures will need to come down to at least 25.90 for that to happen. This appears likely due to the way the downtrend crushed the midpoint Hidden Pivot support at 28.045 the first time sellers encountered it following mid-April's 30.19 peak. There are no easy hooks for determining a trigger interval to bottom-fish, so we may have to calculate it in real time if and when the target is hit. Stay tuned to the chat room and your email Notifications if you care..
You can use the 'locked' reverse pattern shown to evaluate the trend and find tradeable opportunities. It has triggered two winning 'mechanical' shorts already, but I doubt that a third blip up to the green line would deliver. That implies GDXJ will surpass C=44.70 if it exceeds the green line; or alternatively, fall to at least p2=38.00 if it takes out the red line first. Even If sellers win this round, it will still be possible to bottom-fish at either p2 of D=35.77, so stay tuned.
For a vehicle that appeared bound for $100, June Crude came in for quite a drubbing last week. The decisive down-move through p=79.94 on first contact implies the selling will likely hit 72.91 before bulls can turn things around. That would diminish the odds of an eventual move to par, especially if D is easily breached. Alternatively, the most bullish event I could foresee would be a sharp turn from p2=76.43. If that happens and the futures go on to exceed the April 26 peak at 84.46, that would all but clinch a follow-through to $100.
TLT's tortuous descent has depleted whatever energy may have been imparted to the trend by last autumn's impulse leg. Under the circumstances, we shouldn't count too heavily on the downside target at 85.94 to provide a precise turning point for bottom-fishing. We can still do the trade with a camouflage trigger that will risk only small change, but let's also allow for the possibility that this erstwhile cinder block has finally carved out a bottom. Odds of this would shorten if the still youthful rally surpasses April 12's 90.95 peak without a pullback on the daily chart. _______ UPDATE (May 10): Bulls showed a little life last week when they popped above an 'external' peak at 90.95 from April 12. This created an impulse leg of daily-chart degree, shortening the odds that an important bottom is in. Now let's see if buyers can complete the small ABCD pattern shown to its D target, or even exceed it. That would be the most bullish sign we've seen in this vehicle since last autumn.
Some of you may remember Gary Liebowitz, a troll that I 86'd from the site years ago. He still harangues me now and then, and I am saddened to report that his rage has only worsened, especially where Trump is concerned. Here's a pungent note from Gary that just plopped into my email box. I am reprinting it here because it casts him in a role he was born to play: useful idiot. Your deflationary theory has already been proven wrong as the current market is careening towards a TOP as it and YOU ignore the real signs of a 40-year INFLATIONARY Cycle that has started. As predicted by Warren Buffet himself when discussing cycles. He acknowledged this pattern. The dollar is moving UP (WITH) rising Inflation. 10-year note will oblige. In an election year the FED will be FORCED to sit on its hand even if clear signs of inflation are seen. Your refusal to accept the current reality matches you love of a fascist. From Rape, extortion, sedition, and treason there is no act Trump can commit that will allow you to change your mind. Rigid fanatical cult-like thinking is always a prescription for disaster. But since 50% of this nation believe as you, I can only conclude the recent fascist Hitler with his 12 year reign is more common and repetitive than anyone thought possible. Millennials' Burden Gary hasn't gotten everything wrong. I'd have to concede, for one, that I did not foresee the current round of inflation. However, I still believe that a catastrophic deleveraging -- aka deflation -- is the only mechanism through which public debts that long ago ceased to be repayable can be discharged. The inevitable bear market in stocks, postponed by fiscal and credit stimulus of almost unimaginable proportions for far longer
The bounce begun last week from 4963 promises to set up the juiciest shorting opportunity we've seen in this vehicle since last July. The rally has come almost precisely from the sweet spot of the rABC pattern shown, implying that if it touches the green line, a 'mechanical' short from there has a better chance of achieving D=4777.50 than getting stopped out above C=5333.50. The pattern has been useful so far, having correctly signaled the drop that occurred after a theoretical 'conventional' short was triggered on the initial fall through the green line. The new trade is recommended only to subscribers who are comfortable with 'camouflage' triggers that can cut the entry risk by as much as 95%. In this case, the implied 139-point stop loss carries theoretical risk of nearly $7,000 per contract.
MSFT blew past the 404.83 midpoint 'hidden' resistance of the pattern show before settling back, penetrating it with sufficient force to imply that the rally is likely to achieve the D target at 421.63. That would still leave the stock somewhat shy of a 430.58 target that was first aired in 2023 and which has held precisely for more than a month. We should be prepared for a marginal new high, since that would set the kind of hook that would trap bulls and bears alike as the latter scrambled for cover. We'll be ready to exploit any such 'fooler' if it happens.
