The pattern shown was compelling enough to suggest that MSFT might make a top at the D target, 420.26. But THE top? My guess is not, which would make all of the jacking off for the last month a consolidation. It certainly doesn't look like it's setting up a plunge, although that could change very easily with a downdraft that penetrates three supportive lows recorded since January 31. In any event, I have no trading ideas to begin the week, so we'll have to see what develops.
It's hard to be cautious after last week's steep, powerful rally, but we should take heed nonetheless that GDXJ would trigger a 'mechanical' short at x=36.77. I am not suggesting this, since the set-up, with a weak but lengthy impulse leg, is hardly ideal. But we should monitor price action closely after it's hit, since that's why we use charts in the first place -- i.e., to stay objectively on top of the trend no matter what we might think.
'Mechanical' buying opportunities are not supposed to feel like opportunities, since the buying often occurs with the trading vehicle falling hard to the green line. The Dollar Index got hit three days in a row last week, sending it plummeting to x=102.56, where a 'mechanical' buy was signaled. Instead of leaping on the trade I'll suggest paper trading it, the better to observe how an unappetizing possibility extricates itself from a bog. For the trade to work, DXY would need to rally to the red line without first dipping below C=100.62. _______ UPDATE (Mar 17): So far, so good: DXY has rallied from the green line and reached the midway point between the line and the midpoint Hidden Pivot at 104.50. At that price, taking a theoretical profit on 50% of the position would be in order.
Bitcoin mania looks likely to blow itself out at somewhat higher levels. The bitcoin ETF chart above suggests buyers will encounter significant resistance at 64.95, a Hidden Pivot target that lies 5% above Friday's closing price. If this impediment gives way easily or is exceeded for two consecutive weeks on a closing basis, however, you can expect more upside to the alternative target at 70.35. That's fully 14% above these levels, and although that might seem to portend a powerful move, especially if it occurs in a matter of days, it would probably come as a huge disappointment to countless bitcoin fanatics who have been weaned and nurtured on predictions of $100,000 or more. I doubt we'll see anything like that, especially since the shitballs who control bitcoin, Black Rock chief among them, will have reaped more than their directors could spend in a thousand lifetimes if it climbs 'only' another 14% . It is for their benefit that regulators approved bitcoin ETFs in the first place, making the cryptocurrency affordable to riff-raff who had been priced out of the market even at its bear-market low near $15,000 in January 2023. Fractional ownership, including with leveraged options, made it possible for kids who were collecting Pokemon cards just a few years ago to become players in the global casino. Virtual Tulips It's hard to imagine how high tulip-bulb prices would have climbed if Dutch teenagers had had access to virtual tulips in 1637, when the mania peaked. We are going to find out, though, when the crypto blowoff sputters out, as all manias eventually do, for lack of greater fools. In the meantime, here's a link to a recent interview I did with Howe Street's Jim Goddard. It explains why bitcoin would be more reasonably priced at $1-$2 instead of
We have an unfulfilled target on the weekly chart at 430.58. However, I'll treat the one at 420.26 shown in the inset as a possible major top until such time as it is exceeded. Paying too little attention to it cost me dearly when I failed to exit a profitable calendar spread held during the Option Experiment. There is a potential voodoo short from beneath the high, so stay tuned to the chat room and your email notifications if you've been itching to buy put options on this stock.
I've included Bitcoin in this week's list because the weekly chart is so clear and compelling, and therefore useful. The stall at p=48,015 has confirmed not only that the pattern and its 'D' target at 80,547 are 'correct', but that the latter will be reached. It should be used as a minimum upside projection, but also as a likely terminus for the bull market begun in 2020. That much is evident, given the ease with which buyers broke free of p's gravitational pull when BRTI lifted off the launcher two weeks ago. FYI, this symbol provides the best bid/offer, in real time, across a wide swath of bitcoin vehicles and is not directly tradeable. _______ UPDATE (Mar 18, 4:37 p.m.): Bitcoin is still the unwitting bitch of Hidden Pivots. Vicious as its swings are, we shouldn't kid ourselves that the little wuss is hard to trade. How easy is it to nail the swings? Check out this chart! _______ UPDATE (Apr 2, 10:59 a.m.): Bitcoin has been under ambitious distribution below 75,000 and will need to pull back significantly for running room if there's going to be another leg up. How significantly? Probably below 55,000, at least. Here's the chart.
Crude's tortuous rally since mid-December projects to 82.46, based on the ABCD pattern shown. It is good enough for government work, but as you can see, the point 'B' high failed to push above late January's 79.09 high. This 'sausage-y' formation has been remedied by using a one-off 'A' low, although the result is a pattern that falls short of ideal. What makes it usable and even trustworthy is the pullback to the green line precisely from the midpoint Hidden Pivot (p=78.99). Now, a pullback to the red line can be bought 'mechanically' with a stop loss at 77.83. _______ UPDATE (Mar 9): Although the 82.46 rally target remains viable, the pattern's C-D leg has grown too tired to offer a good opportunity for bottom-fishing with a 'mechanical' bid at the green line.
Friday's surge will face a test of resistance at 2106.80, the 'd' target of the reverse pattern shown. If the futures go just a little higher, exceeding the 'external' peak at 2118.00 recorded on December 28, that would generate a strong impulse leg and open up a path to as high as 2204.00. The 'p' resistance associated with that target lies at 2105.80, meaning there are multiple 'hidden' impediments nearby that are going to put bulls' mettle to the test. A clean blast through all of these HPs will signal the tone change we've awaited since December. _______ UPDATE (Feb 5, 10:32 a.m.): As implied above, yesterday's blast through a tight cluster of 'hidden' resistances has put the futures on course for a run-up to at least 2204.00. Here's another target, never broached here before: 2307.00. It is derived from A=1861.70 on 10/6, and tied to p=2151.70, where a stall could occur. ______ UPDATE (Feb 5, 6:20 p.m.): The steep rally begun last Friday did in fact stall almost precisely at the 2150.70 Hidden Pivot identified in my last update. The pullback has been shallow so far, with no impact on the likelihood of D being reached. ______ UPDATE (Mar 6, 5:20 p.m.): The little poke through p=2151.70 may not look like much, but it is quite bullish for two reasons: 1) at that price, there is double resistance from two p midpoints of different degree; and, 2) the futures have closed above the resistance on the first bar in which they encountered the resistance. If the futures close above 2151.70 for a second consecutive day, that would shorten the odds of a further run-up to 2307.00 to no worse than an even bet.
Although my immediate outlook for gold futures is bullish, Friday's thrust in this vehicle looks like a fake. It would have gotten more boost if it had occurred from just beneath October's 30.46 bottom, and that is where I expect DaBoyz eventually to engineer an authentic turnaround. More immediately, GDXJ would become an appealing 'mechanical' short at either the red or green line. We'll pass up the opportunity but use these benchmarks nevertheless to gauge trend strength. _______ UPDATE (Mar 5, 6:35 p.m.): The bullish reversal from last Wednesday's low turned decisive with today's pop through an 'external peak at 35.25 recorded more than a month ago. It is still more bullish because the low failed to come down to p2=30.68.
T-Bonds have been on a theoretical buy signal since February 23, when this vehicle popped through the green line (x-93.40). The minimum upside objective is p=94.80, but we'll be more interested to see how buyers interact with that 'hidden' resistance than in trading GDXJ. A quick and decisive push past it would provide a tailwind for a move to as high as 97.58 over the next several weeks. _______ UPDATE (Mar 9): Last Tuesday's gap through p=94.80 all but guarantees the rally will reach a minimum 97.58, the 'D' target of this pattern. An easy move through that Hidden Pivot resistance would imply that the bull cycle begun from 82.42 last October is about to surge anew.
