Our attention is wasted looking for this dog to break out, since it has been going tediously sideways since January. Hope springs eternal, of course, but we needn't take unnecessary risks to indulge it. It's simply a matter of when the chimpanzees agree that 'value' stocks should be in vogue once again. They'll let us know after they've goosed it beyond easy reach, implying that the only way to get aboard is when it is going tediously sideways. However, the very rightmost edge of the chart -- the last four bars, actually -- contains the impulsive rudiments we would need to attempt this. Query me in the chat room and I'll explain with a more detailed chart. _______ UPDATE (Oct 12, 9:58 p.m.): The 30-minute chart has stopped out bulls no fewer than three times since last Thursday, implying that IWM is trying hard to break out with no fans aboard. We probably won't be either, since catching a ride with risk under tight control is too labor-intensive for a vehicle that few subscribers seem to care about. ______ UPDATE (Oct 14, 11:24 p.m.): How very shocking. IWM opened on a gap this morning that would have left any hesitant bulls choking on dust. Let's see how far DaBoyz can take this short squeeze on a Friday. Wherever it stops, it is guaranteed to be too dangerous a place for taking a position over the weekend.
If I had to pick one chart that shows why the bull market is probably not over, it would be the one above. To be sure, the 157.26 peak recorded by Apple shares a month ago was a great place for an important top to have occurred; this chart shows why. But THE top? I have my doubts. For if this were so, it would rank as one of the most visually boring summits ever achieved. For permabears who have waited patiently for a fitting climax to the most most insane bull market of them all, it would be like finding a WaWa Market at the top of a Himalayan peak they'd almost died scaling. Setting the Hook A few forecasters had precisely predicted a potentially important top at or very near $157, including your editor. Some of us even profited from put butterfly spreads purchased a month earlier that more than quintupled in value with AAPL's 12% drop so far. But it could be pressing one's luck to hold out for more, since the downtrend seems to be struggling increasingly and made no progress at all last week. Perhaps the selloff will turn nasty in the week ahead. But if so, keep in mind that a plunge to the green line would actually be bullish, tripping a 'mechanical' buy signal based on Rick's Picks' proprietary Hidden Pivot Method. It would also imply an eventual rally to as high as 187.93. This scenario is congruent with one I raised here last week -- i.e., that the stock market will rally to yet one more record high, setting the hook in bulls and short-covering bears alike. A steep plunge in the weeks ahead would make a reversal to new highs even more persuasive, and therefore more deadly. Whatever happens, AAPL is
Gold's pointless histrionics have been surprisingly tradeable, albeit only by Pivoteers who know what they're doing. Notice how Friday's stupid spike early in the session reversed from the secondary Hidden Pivot at 1782.70. Any rABC pattern one might have used to set up a short would have worked, although the pullback was so precipitous that executing a stop entry would have been challenging. Some subscribers may also recognize that 'Matt's Curse' took effect when the reversal occurred precisely at p2. This usually means the retracement will take out the point 'C' low of the pattern. We shall see, but if it happens we shouldn't take it too seriously, since gold has been visiting pain equally on bulls and bears alike for the last several weeks. _______ UPDATE (Oct 13, 4:20 p.m.): And speaking of pointless histrionics, you had to love gold's $40 lunatic leap today after spasming $20 both ways in the early going. A short a millimeter off the intraday high produced a profit for the subscriber who reported the trade in the chat room, but the pullback made little progress as the hours went on, suggestion that bullion's 'DaBoyz' aim to take this gas-case higher. Here's a pattern so gnarly that I can all but guarantee that it will work in every possible way, including shorting at 1810.50 via a 'camouflage' set-up. That means you could buy a pullback to p=1780.20 'mechanically' with a stop-loss at 1770.10. That's $4000 of entry risk on four full-size contracts, so minis are recommended unless you are trading with winnings racked up earlier. ______ UPDATE (Oct 15, 7:29 a.m.): When the little p.o.s. plunged overnight to within 70 cents of my 1780.20 bottom-fishing number, I used this rABC pattern to drastically cut the entry risk to $480 on four contracts. The trade
With trillions in reckless stimulus as a backdrop, it seems counterintuitive to speak of the dollar as being in a boring consolidation. But that's what the long-term charts are saying. I'm a dollar permabull myself, since I see a deflationary endgame for the global financial bubble. But I must concede that if the Dollar Index is eventually headed to 120 or higher as I've been predicting, it is in no hurry to get there. The chart doesn't give much support to dollar bears, though. The most bearish thing that could be said about it is that even though the greenback has risen only very modestly this year from the lows of a five-year range, it is already getting pretty overbought. This sluggishness is worth watching, but it is not at all menacing at present. Keep in mind as well that merely being overbought does not preclude the possibility of an enormous rally while this condition exists; it happens all the time. For the time being, however, you can tune out all the noise and 'expert' opinion concerning the dollar, especially the bearish kind.
ES moved more or less according to forecast on Friday. Although I'd touted an avalanche as likely, for scalping purposes I also proffered bottom-fishing guidance in the chat room that caught the intraday lows in QQQ, DIA and ES within a tenth of a percent. I'd intended to trade for a bounce, and that is still what I think we are seeing notwithstanding its seeming power. In Hidden Pivot terms the rally is still a relative weakling, having exceeded just two of six 'external' peaks on the hourly chart. Although we shouldn't presume too strongly against a waxing rally, bulls should still have to prove their case one peak at a time before we resign ourselves to new record highs. (That would not make me more bullish, for reasons I've explained in the current commentary concerning IBM's head-fake in 2009.) For now, use the 4224.75 target shown in this chart as a minimum downside objective. It will remain theoretically valid until such time as C=4469.50 is exceeded. A rally to the green line (4408.31) would trip a 'mechanical' short, stop 4470.00, but I am recommending this trade only to Pivoteers who know how to cut the $12,000 entry risk on four contracts by 90% or more using a 'camouflage' trigger. However, pending a possible tone change Sunday night, your trading bias should be bullish if you can handle entry signals on the sub-hourly charts. _____ UPDATE (Oct 4, 4:28 p.m.): Yet another timid showing by bears, this one failed to take out Friday's low. String together enough such failures and bulls eventually will seize the advantage. Monday is typically their worst day to scare up a bounce, but the herd looked poised nonetheless for a 'turnaround Tuesday'. ______ UPDATE (Oct 5, 5:20 p.m.): Bulls turned things around with a vertical
Last week produced an exceptional one-day rally, then a sideways follow-through that looks like a bullish consolidation. The start of something big? Probably not, but we should take the possibility seriously, since, if stocks have entered a bear market, that would be the kind of paradigm shift that could change a picture in bullion that has remained stagnant for a year. I've displayed a weekly chart to put the rally in perspective: it is not even a blip, at least not yet. Nor should we get too excited if a fresh burst hits the green line, triggering a theoretical buy signal of long-term degree. That's happened twice since last summer, only to fail with the creation of two new point 'C' lows. This time price action so far is arguably less bullish, since the reaction rally off mid-August's stop-'em-out low didn't even reach the green line, nor was it impulsive on the weekly chart. I can offer no trading suggestions at the moment, but if you are scouting the lesser charts for opportunities, please don't hesitate to ask about them in the chat room. _____ UPDATE (Oct 4, 5:10 p.m. ET): If bears can chew through p=1770 tonight they'll be in good shape for a follow-through to the 1792.40 target of this pattern. Using 'camouflage' to avoid $1100 of entry risk per contract, buy a pullback to the green line 'mechanically' if the opportunity should arise, especially in the wee hours. _______ UPDATE (Oct 5, 6:53 a.m.): The trade triggered at 12:39 a.m., 14 minutes after the futures pulled back to the green line (1758.90). The set-up, shown here on the one-minute chart, produced a gain on four contracts of as much as $480 in 40 minutes before gold peaked shortly thereafter and dove. Initial, theoretical risk would have been
Bertie uncoiled Friday like a cobra trying to snatch a bird from the air. To leave no doubt about intentions, DaBoyz closed Birdie above the 48,000 'midpoint pivot', a preliminary sign that it's on its way to the 55,822 target. The pattern is a good one for 'mechanical' trades, especially since only one such signal has failed over the time I've tracked this vehicle. For now, use p2=51,928 as a minimum upside target, and don't be surprised if it gets there before you've had time to plot a strategy. You weren't actually going to trade it anyway, though, were you? Indeed, at these levels, the Big Boys have this creature of the imagination all to themselves. ______ UPDATE (Oct 6. 8:36 p.m.): What a shock. Bertie has traded up to 55,747 tonight, a tenth of a percentage point from a 55,822 target (see above) that might have seemed a tad ambitious to some old-school speculators. Let's see whether bitcoin's book-talking, fat-cat sponsors idle ostentatiously for a day or two before they announce to the world that new record highs are coming.
The chart above shows how bull-market tops are made when nearly everyone is expecting one. That's the case now -- for so many good reasons that I won't bother with a checklist. Just take my word for it: the bull is dying. Most of the reasons the pundits are giving would have us believe the stock market is somehow connected to reality. I won't insult your intelligence with such claptrap, since you get enough of that on CNBC. I'll simply mention my own good reason for thinking the Big One has begun: The so-far all-time high in QQQ, a speculative vehicle that tracks stocks favored by the chimps and lunatics who pretend to manage your money, hit an all-time high at 382.75 on September 9 that came within three pennies of a target I'd drum-rolled back in January. Stocks have gone steeply downhill since, giving my magic number a fighting chance to nail it. But perhaps not, or at least not yet. For if Mr. Market is going to set the hook as firmly as possible before taking no prisoners, it wouldn't hurt for him to push the broad averages, or at least the lunatic stocks, above the September 9 top that has begun to look so promising to permabears. After such a nasty tumble as occurred last week, new highs could set up a knockout punch much like the one that occurred in IBM. The peak that I've labeled "False top" occurred in mid-2009, and it came within relative inches of a major Hidden Pivot target I'd disseminated to subscribers months earlier. Imagine my elation when IBM dove sharply for eight weeks after getting within spitting distance of my magic number. Unfortunately, I was so busy patting myself on the back that I failed to notice the waxing vigor
A manic two-day short-squeeze from Monday's bombed-out lows met heavy supply on day three, thwarting bulls who may have hoped to get it all back before the week ended. Layers of stock from the previous week's heavy chop remain solid and thick, and there's no telling how quickly, or even whether, buyers will chew through it. But if they do and it requires less than the five days it took to pour the concrete circled in the chart (inset), that would imply new all-time highs are coming. We'd have to respect the trend at that point, but not necessarily the seemingly crazy idea that the bull market is headed much higher. _____ UPDATE (Sep 28, 4:53 p.m.): Bears turned docile midway into the session, failing to convert a promising selloff into a bloody rout. They'll have another chance, probably soon, but it could require a nasty rally first to crush short-covering chumps who are preventing a memorable collapse commensurate with the bull market's extraordinary excesses. ______ UPDATE (Sep 30, 6:15 p.m.): It looks like the jig is up for the sleazeballs who have been short-squeezing stocks every night on zero volume, since even the dumbest, most panic-sticken bears aren't going to fall for the same, stupid con four nights in a row. Stocks reversed today off Wednesday night's phony waft and closed on the low of the day. Incredibly, there are apparently enough suckers around at 6:20 p.m. to levitate index futures slightly into the black, but the supply of them is about to dry up. Look for real carnage on Friday, of the sort that leaves investors fearful over the weekend. I will be bottom-fishing in the discomfort zone nonetheless, but only for a high-leverage scalp-trade with penny-ante risk.
Are T-Bonds in a bear market, or merely consolidating a longer-term bull? A weekly chart going back to 2012 yields a mixed picture, albeit one that is tradeable. The uptrend begun six months ago is bullish insofar as it exceeded the 'd' target of the rABC pattern shown (see inset). But it is coming off a low that broke a major support from January 2020, creating an impulse leg almost as powerful as the bullish one that spiked the futures to spectacular heights when the pandemic first hit in March 2020. Some traders will also see the contours of a very long-term head-and-shoulders pattern in this chart. I am not a big fan of them, although I'd have to concede that imposing one here is relaxing -- which is to say, mildly persuasive -- to the mind's eye. For trading purposes I'll suggest using this bearish pattern begun from a small peak last January. It suggests minimum downside to 158^09 over the near term. We'll reassess trend strength once we've seen how sellers interact with that Hidden Pivot support. _______ UPDATE (Sep 29, 9:34 p.m. ET): The futures are struggling to put in a bottom somewhat above the 158^09 target given above. It remains theoretically viable, but for now we'll just have to see how it goes. It would be bullish for the intermediate term if a rally takes out some prior highs on the hourly chart without having dipped to 158^09 first. The nearest such peak lies at 160^27.
