Two conventional ABC patterns are driving crude higher to, respectively, 75.80 and 77.48. Both of these Hidden Pivot resistances are shown in the chart, with HP levels that should be tradable. That implies that a pullback to the green line from Friday's high at our sweet spot would trigger an appealing 'mechanical' buy. Also, a subsequent rally to the target could be shorted with a tightly constructed reverse pattern. The larger ABC has a midpoint resistance at 73.44, and an 'x' green line at 72.26 that also would be buyable. Bottom line: Expect Feb Crude to continue higher, with no dips below C=69.28, to at least 77.48.
Just a little lower and it will be Katie-bar-the-door time for the buck. Last week's moderate rally pushed DXY out of the red zone, but the trend will have to exceed the 104.26 peak recorded on 12/8 to become a safe bet, if only for a short while. In retrospect, the failure to push above the 107.99 'external' peak recorded last February foreshadowed problems. Bulls turned timid just when they needed an extra inch of push, and that may have sealed the dollar's fate over the intermediate term.
Silver futures fared worse than their gold counterpart last week, leaving a 'mechanical' buy triggered on December 29 hanging by a thread. The weekly low at 22.888 came within a dime of stopping out the trade, which I did not recommend. There is a voodoo number not far below the pattern's point 'C' low where bottom-fishing could be attempted with relatively little risk, but we'll nature take its course before we hatch any bullish plans.
The stock market is so pumped with hubris, lies and delusions that I'm beginning to doubt whether the bull market will see Microsoft rally to $430 before everything comes crashing down. I've been using MSFT as a bellwether because it has been the strongest megacap stock in the world for the last four years, and because the company's subscription-based revenues will continue to flow even in a severe economic downturn. The stock's weekly chart implies it will make a very important top if and when it hits 430, but there are no guarantees it will get there. The chart's bullishness is persuasive on this point because of the ease with which buyers exceeded the p=322 'midpoint pivot' of the pattern. However, the implied power of the move would have been greater if the rally had impaled p and never looked back. Instead, MSFT took its sweet old time over a period of five months in turning the midpoint pivot into a launching pad. This, in my estimation, has made the stock an 80% likelihood to reach 430, as opposed to a 95% bet if buyers had pulverized p=322 on first contact. So how do we deal with 20% uncertainty about how and when a top will occur? It is important to get this right, since the bear market that's coming stands to bring even greater hardship to most Americans than the 1930s. People were more resourceful then, with 30% of the work force tied to agriculture, literally living off the land. They were not in hock up to their eyeballs, and women had the option of staying home with their children. The dollar was backed by gold and fundamentally sound. Government statistics tied to job creation, unemployment and GDP growth were not horse manure like the numbers shoveled at us
The futures have turned heavy, although this has not much diminished the prospect of a further rally to the 4950.00 target we've been using since early November to stay confidently on the right side of a bull market that has flouted all reason. Please note, however, that a swoon to either p=4558.74 or x=4363.25 would trigger an enticing 'mechanical' buy, even if many traders would view this as more than just a little discouraging, especially to start the new year. ______ UPDATE (Jan 2, 6:53 p.m.): A nasty day, but my gut feeling is that it happened only because every drooler and village idiot on the planet positioned himself on the last trading day of 2023 for a continuation of December's joy ride. It's just a correction. and buyers will soon be back.
There are numerous conflicting currents acting on AAPL at the moment, but I've settled on a corrective pattern on the daily chart that seems clear enough to rely on in the days ahead. A bounce precisely from p=191.37 would help us get oriented, but any decisive breach of this support either intraday or on a closing basis would portend more slippage to as low as D=188.07. We'll be entering a new year, an event that should have no particular impact on stocks but which often has ignited powerful rallies. In any case, the pattern shown should be easily tradable in all the usual ways, since it began with a 'textbook' impulse leg. _______ UPDATE (Jan 2, 12:15 p.m.): This morning's take-no-prisoners opening shredded every minor 'D' target/support on the hourly chart, generating an impulse leg in the process. This implies that any rally that falls short last year's high at 200 is setting up another leg down.
We used a rally target from the weekly chart to buy put options last Wednesday for 0.19, just pennies off their all-time low. By week's end they had traded for as much as 0.43, giving subscribers an opportunity to cash out of half of them for at least twice what they'd paid. This effectively lowered their cost basis to zero, giving everyone a riskless position with a week left on it. The chart shown is bullish, but if this corrective move picks up steam it could yield a fat gain for everyone. I recommend holding at least a fraction of the original position until Friday afternoon, when the options expire. _______ UPDATE (Jan 2, 6:47 p.m.): The puts traded as high as 0.72 today, nearly four times what we paid for them, so you should be out of at least half of your position. _______ UPDATE (Jan 5): The puts that subscribers bought for 0.19 or less a week ago traded for ten times that today, yielding exceptional profits for anyone who did the trade -- even those who bailed out early. I'd explicitly advised holding a few puts until they expired (see above), a strategy that paid off at jackpot odds when T-Bonds relapsed following an opening-hour short squeeze. Now, the plunge could continue to as low as 95.26 over the near term. Here's a chart that shows the target.
The futures made a little headway toward the 2184.80 target with a marginal penetration of the pattern's midpoint resistance, p=2086.40. The target is slightly higher than the one given earlier, which used a one-off 'A' on the hourly chart. A pullback to the green line (x=2037.10) should be treated as a gift, since it would enable a 'mechanical' buy that looks quite fetching in prospect. The implied 50-point stop-loss would demand the use of a 'camouflage' trigger designed to cut entry risk by at least 90%. I will furnish timely details if possible, so be sure to check your email 'Notifications' if the trade gets close. _____ UPDATE (Jan 5): Sellers pushed the futures down to the green line, triggering a 'mechanical' buy with an unacceptably wide stop-loss at 1987.80. I did not put out a trade because there was no a-b segment clear enough to set up a lower-risk, reverse-pattern entry. We'll spectate for now, but with the goal of jumping in on the long side if the right opportunity comes along.
Friday's selloff early in the session put Silver a tradable step ahead of Feb Gold, since it triggered a 'mechanical' buy at the green line (x=23.80) that has yet to occur in gold. There are no guarantees that the theoretically profitable bounce that occurred subsequently will keep on going, but the bullish signal would remain viable nonetheless, even if the futures slip beneath 23.80. The signal offers no assurance of a further move to D=26.86, only the likelihood of a profitable one-level move from x to p.
Although GDXJ has not reached the 41.81 rally target we've been using, I've switched to a moderately negative picture because of the way bulls got sandbagged last week after slightly exceeding a key 'external' peak at 39.70 recorded on July 18. My expectation is for the pullback down to at least p=35.20, but I'll be looking closely for the first sign of an upturn from above that 'hidden' support (which will be tradable via a 'reverse pattern'). Let's wait and see first whether the downtrend actually trips a theoretical sell signal by falling to the green line, a feat missed on Friday by just 12 cents. _______ UPDATE (Jan 5): Price action has been viciously abusive of bulls, even if swing highs and lows have been more or less predictable. The low of last week's selloff, for instance, came down to within 18 cents of the 35.20 target flagged above, but without generating any appealing bottom-fishing opportunities. We'll back away for now, since GDXJ is going to need more help from bullion futures to get rolling.
