The stock's handlers, undisputed geniuses of the Einsteinian buy-and-hold strategy, did so well keeping AAPL aloft last week that we should assume they can keep this short squeeze going for at least another week or two. They did after all trick investors into stupidly shrugging off the implosion of iPhone sales in China, a remarkable obfuscation that demands our respect. Accordingly, I'll suggest using a voodoo number at 186 as our minimum upside target for the next two weeks. The stock will first need to fake its way above the 182.34 'external' peak recorded on October 12, but that is hardly an insurmountable problem for world-class thimble-riggers who have mastered the art of producing volumeless leaps whenever they need a big rally and there are few actual buyers around.
At last! Friday's heroic leap spiked GDXJ through the upper trendline of a longstanding channel that was featured here last week. Even more encouraging was the close above it, although the rally fell 29 cents shy of an 'external' peak at 36.14 recorded on September 15. It will need to be exceeded to create an impulse leg we could trust. Better still would be a move surpassing a second peak of somewhat higher degree at 37.08 from August 30. But any move above the lower peak would allow us to view even significant weakness subsequently as merely corrective.
We've all been wondering when $2000 will start looking more like support than resistance, an eventuality that showed no sign of happening over the last few weeks with the futures cavorting there and teasing bulls. It was an annoying exercise in tedium as gold slid up and down a greased pole of hopes and expectations. It doesn't help that most of the action took place beneath a slew of 'external' peaks recorded last May and July. My hunch is that the excruciating excess of deliberation is a consolidation for a sustained move that will ultimately leave $2000 in the dust. We'll continue to trade with a bullish bias unless a salaciously appealing opportunity arises to get short temporarily.
Recent price action in silver does not justify a bold prediction at the moment. However, my patiently bullish outlook for gold implies it will drag silver higher when the time comes. The most positive thing that can be said of the latter is that the spike high that occurred on October 20 exceeded an external peak at 23.81 that would likely have trapped many enthusiastic buyers badly. That means the moderate selloff since has been corrective and should be viewed as a buying opportunity. As such, our focus will be on doing so on weakness that meets our criteria for bottom-fishing. Stay tuned.
We ended the week with a nice score in crude futures that is detailed in the chat room. Check out Friday's discussion thread to determine whether you could have followed my simple, explicit instructions to reap a gain of at least $1070. It came by way of a day trade initiated in the early afternoon. This gambit went against the trend, leveraging a presumably minor breakout that died almost precisely at the p2 secondary target of our bullish pattern. So what's next? The selloff from just beneath June's $94 top comes as a surprise, since my recent forecasts have called for a run-up to at least $117. That's still possible, and the target will remain theoretically viable in any case unless the December contract plummets below $63. But the inability of DaBoyz to manipulate the price above the June high diminishes the likelihood of a blowoff. It's possible the 92.48 peak in late September was a terminal move, but the rally could still re-ignite if the Israel/Iran war escalates sufficiently to curtail global energy supplies. _______ UPDATE (Nov 10): Crude got savaged last week as sellers pushed the December contract beneath two important lows -- one internal the other external -- without an upward correction. This generated a strong impulse leg that will require an even more powerful upthrust exceeding 83.60 to undo the damage.
[A change of tone and tempo this week from our good friend Richard Charles, owner of Lake Tahoe-based Alpine Capital. His observations concerning gold's historical role during periods of intense global strife should remind us that bullion's sometimes crazy price swings should not be investors' focus right now. RA ] With plans to attend memorial service for a dear teacher friend of 92, as Rick asked for a modest commentary, thoughts turned to finite things. JFK’s poet laureate Robert Frost wrote: Nature's first green is gold, Her hardest hue to hold. Her early leaf's a flower; But only so an hour. Then leaf subsides to leaf. So Eden sank to grief, So dawn goes down to day. Nothing gold can stay. In 92 years, Vera survived the Great Depression, The Great Inflations and World Wars. She saw a few years of peace dividend in a country with more riots than years of her lifetime. At this time we face a market test in our lives and history. Wednesday, waiting for the latest Fed decision on interest rates, we saw a record low Put to Call Volume Ratio of 3%. We consulted several sources to make sure it was not an artifact. Our experience is when people give up buying or selling puts for income, protection or speculation, TTOBGH, -- that’s the old ball game, honey. What to do ? Always, the question of survival and thrival -- or at least less loss. When I was a young Merrill Lyncher, we had a customer gallery on our trading floor. I was always interested in what the well-dressed old guys had to say. In 1980 gold briefly breached $1000 as Hong Kong produced $1000 gold coins to commemorate the Year of Elizabeth II and Lunar Monkey Year. I asked the eldest market
Since triggering a theoretical buy signal at the green line (x=105.89) a month ago, the dollar index has corrected only slightly and not closed below it. This implies that the next significant move will up and that it will take DXY to 112.20, the Hidden Pivot midpoint of a long-term pattern that projects to as high as 124.82. This is bad news for all who owe dollars, although it may eventually force the big spenders on Capitol Hill to rein in deficit spending. I used to think a strong dollar would force an end to Powell's tightening regime, but perhaps the deflationary implosion it could cause is what he intended all along.
Gold completed a shallow consolidation last week before launching toward the 2068.00 target we've been using as a minimum upside objective. If buyers plow through this Hidden Pivot, our next price objective would be 2133.10, calculated by sliding the point 'A' low of the reverse pattern down to an 1820.00 low recorded last November. That would produce a conventional ABCD pattern, but it would be sufficiently gnarly to make the resulting Hidden Pivot levels useful for trading.
The spike that capped the recent rally narrowly failed to surpass an 'external' peak at 24.05 recorded a month earlier. It was not all we might have hoped for. But there was more resistance than appeared, including a second, very sharp peak that caught bulls off guard before crushing them in a two-day cascade. Now, looking on the bright side, with gold promising to drag silver higher, we should expect this pullback to give way to an exuberant thrust that clears not just the prior peaks, but also a midpoint Hidden Pivot resistance at 24.02. Once the December contract is above them, we'll be able to trade 'em up as bulls cruise to at least p2=25.60.
The October 20 rally top at 35.36 failed to impulse above some peaks from mid-September, casting a shadow on the chart shown. This dour price action will likely have consigned GDXJ to a test of the midline of a channel that has contained this vehicle's ups and downs for the last six months. However, since my outlook for gold and silver is bullish, I expect the midline to hold and to support a bounce that breaks out of the channel. My minimum upside objective thereafter would be 42.09, the 'D' Hidden Pivot target of a reverse pattern flagged here earlier.
