I've shrunk the picture somewhat with a truncated a-b leg that projects a tradeable low at 164.90, well above the 146.25 target presented here last week. However, if AAPL should eventually relapse and close below last week's 171.96 low for two consecutive days, it would shorten the odds that the more bearish target will be reached. In the meantime, the best opportunity I could foresee for the next two weeks would be 'mechanically' shorting a run-up to x=189.90. Otherwise, AAPL still looks like a good bet to fall to at least 164.90 eventually, so our mid-term trading bias should remain bearish.
December Gold's failure last week to reach an 'easy' midpoint Hidden Pivot at 1954.30 seems like weakness, but I hesitate to draw so obvious a conclusion about a vehicle that likes to surprise us at the turns as much as this one. My bias remains mildly negative, however, and that implies the futures will at least feint beneath the 1913.60 point 'c' low of the reverse pattern shown. That would certainly be tradeable for bottom-fishing, but we'll let price action determine our next move. At the closing bell on Friday, bears remained in charge despite a sharp rally from a mid-morning low. _______ UPDATE (Aug 28, 3:44 pm. EDT): Just posted in the chat room: "I can't promise you that last week's low will prove to be the start of a major bull leg, Sparty. But I'm confident this bullish pattern, with a 1995.00 rally target, will make you money regardless -- and it could also clarify the outlook. Today's high occurred a single tick from p, validating the pattern. It has also set up an appealing 'mechanical' buy if Dec Gold should pull back to x=1934.00 (stop 1913.50). Click here to call up the chart.
September Silver became a 'mechanical' short in theory with last week's run-up to the green line (x=24.403), but it looked too revved up as the week ended for the trade to be enticing. My gut feeling is that the futures will hit the red line (p=23.33) first, even if they eventually stop out the short, but we'll look for low-risk opportunities to test this theory rather than trade with a bias. If bears lose this round, that could signal a run-up to as high as 28.48 over the next 5-7 weeks (daily, A= 20.42 o 3-10).
The daily chart yields a mixed picture, the same as the one in COMEX gold. My bias is slightly more bullish for the ETF, though, since the moderate rally that began the week exceeded an 'external' peak that was absent from bullion's graph. This created a bullish impulse leg with potential to lift this vehicle as high 38.28 within the next 2–3 weeks. Friday's pullback to the green line (x=34.30) generated a weak 'mechanical' buying signal, but we'll ignore it until we've seen a few more daily price bars. ______ UPDATE (Aug 28, 6:29 p.m.): Today's robust rally closed just a micron above p=35.63, a compelling Hidden Pivot midpoint, but that's sufficient to tip the short-term outlook bullish. A sharp stab higher or a close above p for a second straight day would make more upside to D=38.28 a strong bet.
I seldom give a second thought to head-and-shoulders patterns, since they are everywhere one seeks them. The one shown is so well-formed, however, that it's worth pondering. Putting the pattern aside and looking at the chart intuitively, there is obviously a lot of weight sitting on bulls from distribution that took a month to carve the ominous picture shown. With the average price of a gallon of regular gas threatening to push above $4, we should cross our fingers and hope the pattern works its magic, sending crude down to the low $70s and denying refiners a windfall blowoff to $5/gal.
TLT tripped a 'mechanical' sell signal at the height of last week's run-up, which featured a powerful gap-up opening midweek. Buyers spent the rest of the week head-butting the green line where the short was signaled, making the ostensible opportunity seem less appealing at the closing bell. We'll be better able to predict the next significant move once we've seen how this vehicle behaves on Monday, so stay tuned. Sharp weakness would portend more slippage to D=88.93. _______ UPDATE (Aug 28, 6;39 p.m. EDT): TLT has given nothing back since a short squeeze pushed it sharply higher last Wednesday. This created a quite bullish 'island reversal' that has shortened the odds of a further run-up to D=97.84, the Hidden Pivot target shown in this chart.
A handful of tech moguls already control the global flow of information, but their influence over our lives will only expand and deepen if Congress doesn't do something soon to pry their greedy hands from the ultimate fruits of AI development. I say this while recognizing the irony of casting our elected representatives as the good guys here. Many if not most of them are in cahoots with the industries they purport to regulate, and some on Capitol Hill could rightly be described as allies of giant companies run by power-hungry men who bend too easily toward the enticements of fascism. So what have the evil titans of the digital world been up to? For one, they have gone all-out to convince us they're gung-ho for open-source development of AI code. Who could object to that, especially since they've seeded the project with enough money to ensure the kind of breakthroughs that will pay off financially. And for two, they've rolled out industrial-strength AI platforms online that can be downloaded and used by nearly anyone. Many subscribers are paying up for bells and whistles that can help their businesses operate more efficiently. Law firms, for instance, have been axing paralegals in droves, since it doesn't require a human brain to churn out boilerplate that no one reads. And students either too lazy or too stupid to think for themselves, let alone think critically, have gained more time to do the things they really enjoy and care about, such as hook up on Tinder and play beer pong. Such a gift! There Are Strings But there are strings attached, and this is where motives and possible outcomes get sticky. The strictures that a handful of AI poobahs have placed on the creators of chat bots are more than a little troubling.
Since the dollar bettered my moderately bullish expectations last week, I've deployed a bigger reverse pattern that will give the rally more running room. Even so, we'll be watching closely for a stall, possibly fatal, at p=104.65. That's a midpoint Hidden Pivot resistance, and the usual rule applies: If it is impaled on first contact, that would shorten the odds of a further run-up to the next HP level, p2=107.19. The Matterhorn is March 8's 105.88 print, and if it's decisively exceeded, the 109.72 target would be in play. That could not but reflect a sea change in the global financial picture, so we'll be keeping a close eye on the price benchmarks noted above. ______ UPDATE (Aug 23, 7:06 a.m. EDT): The dollar is headed for a crucial test of the 104.03 Hidden Pivot resistance shown in this chart. Remember, almost NO ONE wants a strong dollar, since it will increase the financial burden on EVERYONE who owes dollars. (Do you know anyone who doesn't?) That is the chief and most destructive symptom of deflation, and it is a vastly larger creature than the relatively puny inflation that Covid stimulus loosed on the economy. The deflation juggernaut has been gathering irresistible force since long before Covid, and we may be about to find out whether its time has finally come. With mortgage rates above 7%, it is already enjoying a powerful tailwind.
Last week's sharp decline missed the minimum downside target at 4336 flagged here last Sunday by an inch, denying us an opportunity to play the bounce into Friday's close. This is no tragedy, however, since the futures are unlikely to go much higher before they resume their fall to the "D' target at 4237.75 shown in the chart. My confidence in this outcome is based on the decisive penetration of p=4436 on Wednesday. It is still more bearish that the futures never closed above the red line after breaching it for the first time. Getting short has grown more difficult as the downtrend has lengthened. However, if you aspire to catch a ride south, tune to the chat room, which has been well up to the task.
The update I put out Wednesday night nailed the week's low at 1914.20 within $1. However, because no one reported a trade, I haven't established a tracking position. I expect the downtrend to resume this week and to hit D=1897.90, a Hidden Pivot that can be traded with a tightly wrought rABC (i.e., reverse-pattern) trigger. There could also be a tradeable bounce from 1911.50, but it should be bottom-fished only by Pivoteers who know how to find this voodoo number. The 1897.90 pivot is obviously important, since a breach could send December Gold groping for traction below the Feb/Mar lows around 1883. _______ UPDATE (Aug 23, 10:23 a.m.): Gold is off to the races this morning, presumably on a track to nowhere that has come to resemble a Möbius strip. Despite my skepticism, however, and because the rally is solidly impulsive on the intraday charts, I'll offer this bullish view as though I were a true believer. Like most fetching 'reverse' patterns, this one is all but guaranteed to work well no matter what your purpose.
