Last week's $7000 rally sputtered out $1000 shy of my 113,127 target, denying us an opportunity to reverse the position for the return trip south. The downtrend looks likely to achieve a minimum 106,020, a Hidden Pivot support you can bottom-fish with the tightest possible stop-loss. Confirmation of a likely reversal from very close to that number came with the precise bounce from the pattern's 108,045 midpoint Hidden Pivot support (p=108,045). Use a tight stop-loss to get aboard, but be prepared for a tricky bottom, since the target coincides with a bunch of lows recorded one day last week.
Crude looks primed to screw the pooch, but the daily chart suggests two trade possibilities nonetheless. One would call for getting short on a pop to d=65.38. A stop-loss as tight as 15 cents can be used, although it would be preferable to set up a 'camo' trigger pattern on a chart of a lesser degree. The second trade calls for bidding 'mechanically at the green line (x=57.0). The textbook stop-loss would be just below c=54.33, so tighter risk management is called for by entering the trade with a trigger pattern of small degree. _______ UPDATE (Jun 11): Today's unusually powerful spasm suggests war may be coming, perhaps in the form of the long-anticipated strike on Iran's nuclear bomb facilities by Israel. There are many other imaginable catalysts, however, and they should all be taken seriously if this spike gets past two tough obstacles: 1) a Hidden Pivot at 68.98; and 2) the distinctive peak at 71.10 recorded on April 2.
If DXY is going to resume the uptrend begun in April from 98.01, the 98.66 Hidden Pivot support shown would be a logical place for this to occur. The pattern is a conventional one, but because the 'B' low is not obvious, its gnarliness should work for us, delivering a tradable bottom precisely where expected. We don't typically trade this vehicle, but a reversal from the target could yield opportunity in currency pairs or futures. ______ UPDATE (May 30): Easy come, easy go. What started out as a promising week ended with a steep, one-day reversal that left the dollar little changed from the previous week's lows. Still worse is that the apex of the rally failed to generate an impulse leg on the hourly chart by surpassing an external' peak at 110.58 recorded May 19 on the way down.
Of all the nutty ideas in investors' heads these days, none is crazier or more pernicious than the mass delusion that grotesquely inflated asset prices have made tens of millions of us rich. As equity shares and residential real estate prices have risen higher and higher due to Fed stimulus with money conjured from nowhere, Americans have basked in the so-called wealth effect. 'Easy Al' Greenspan could be their patron saint. An egghead with a PhD in economics, he often spoke of inflated home values as 'wealth' -- i.e. money in the bank. He should have known better. Investors paying homage to Greenspan would have been at their giddiest recently when Microsoft shares opened $31 above the previous day's close. Because the software giant is a $3 trillion company, the biggest in the world by capitalization, this added about $273 billion to investment accounts holding Microsoft shares. The total amount of bullshit wealth produced by the price gap has climbed much higher since, because the short-squeeze that goosed MSFT initially has continued to this day. At last week's $460 high, the tally of vaporous 'wealth' injected into the system by MSFT's scripted explosion was $492 billion. The actual figure is probably at least five times that, or $2.4 trillion, since Microsoft's steep run-up has dragged the entire stock market along with it. The effect was most pronounced in the lunatic sector, which is sometimes referred to as the Magnificent Seven by the clowns who invent the news each day. The group includes Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla, and the orgiastic performance of their shares, far from being 'magnificent', should be a source of embarrassment to civilization itself. Surfing Sea Waves You don't have to be a chartist to see that this won't end well. Stocks tend
When the white-shoed crime syndicate that controls this stock goosed it for a quick 30-point gain on May 1, they probably didn't expect to get as much additional mileage as the stock has delivered since. It now looks like a shoo-in to achieve thee 488.75 target shown. That as much as ensures that the bull market has a ways to run, since the Nasdaq is tethered to MSFT now that it has become a relative-strength engine once again. If the stock should relapse to p=416,.77, however unlikely, that would trigger a very enticing mechanical buy, stop 392.77.
Gold's bounce from a deep hole last Thursday did not quite live up to our expectations, so the outlook is bearish for the near term. More oomph would have pushed the June futures above an external peak at 3270.40 recorded on May 13, but the buying sputtered out well below, at 3208.70. The implication is that if the bounce from Friday's low hits the green line (x=3219.20) it would trigger a 'mechanical' short, stop 2355.90. The trade would be predicated on a target at 3109.40, a good place to bottom-fish aggressively if the opportunity should arise. _______ UPDATE (May 20, 9:20): When a picture-perfect trading opportunity like the short trade recommended above doesn't produce an easy profit, it's safe to conclude that the trend you've bet on is about to reverse. This one did, although not quite with a vengeance, only a sissy punch below the belt. The rally is bound for a minimum 3360.50, a Hidden Pivot that should show potentially tradable stopping power. If bulls can punch through it, expect a test of the 3448.20 high recorded on May 6.
Silver has been engulfed by tedium, almost too painful to watch. A breakdown below the sawtooth action of the last several weeks should be presumed headed to the red line, a midpoint Hidden Pivot support at 30.200. A tightly stopped buy there would be warranted if you feel like bottom-fishing, but it could take a while before the futures signal the trade. Neither bulls nor bears could be very happy at the moment, which is usually Mr Market's cue to deliver more of the same.
GDXJ looks vulnerable enough to fall all the way down to 53.31. The outcome may not turn out to be quite that bad, but your trading bias should be bearish for the time being. The silver lining is that if GDXJ should fall to the target, it would provide an unbeatable opportunity to bottom-fish with a tight stop-loss. This is a back-up-the-truck number, and so I will not make this tout publicly viewable. The last time I did this was in MSFT, which dropped $11 after getting within an inch of a 450.24 target that was 'blacked out.'
I've been gung-ho on Bitcoin for a while, but I'm unfurling the yellow flag this week because the recent lows, constituting a bottoming processes that took two months to complete, occurred beneath a downside target that should have contained the retracement to begin with. That set up a pattern which tripped a theoretical 'mechanical' short when Bitcoin hit the green line (x=96,055) two weeks ago. The trade would be unprofitable at the moment, but that is hardly a reassurance that this vehicle will surpass the pattern's point 'c' high at 109,358 to stop out the trade. Even if it does, I will be on my guard against a head-fake, so stay tuned for updates if you want to stay closely apprised. Please note that I have published rally targets as high as 144k. _______ UPDATE (May 20, 9:01 p.m.): Here’s a high-confidence target for this animal at 113,127. Your trading bias should be bullish until it’s reached, and you can get short there with a preternaturally tight stop-loss if you’ve made a few bucks on the way up.
Although the rally may already have begun to feel the magnetic pull of the old high, that is no assurance a new high will be achieved. It will first have to push past a Hidden Pivot resistance at 6128.25 that has the potential to stop the rally dead. The effect is likely to be precise if it occurs at all, so you won't have to ponder price action for more than an hour or two once the target is hit to figure out what might come next. The target is worth shorting provideddd you have the chops to pare entry risk down to 3.00 points or less per contract.
