Gold is technically in a bullish phase, having completed a correction down to the 201.40 target of the reverse pattern shown. The initial move off the low was sufficiently robust to affirm the bullish picture. However, price action since has been feeble, presumably because the steep, month-long rally from October's 1861 low needs more time to consolidate before the futures embark on another powerful run-up. We can only bide our time while bullion dithers, since trading the relatively small oscillations is hard work. I will signal nonetheless if an exceptional opportunity (i.e., a potentially important low) should develop.
Last week's rally to the green line (x=23.15) generated an enticing signal to get 'mechanically' short, but it went unanswered because silver hasn't exactly been a hot discussion topic in the chat rooms. 'Spartacus' offered a link to an ostensibly bullish chart, but only tentatively so. The chart shown in the inset had more immediate consequences, but it remains to be seen whether the so-far one-level move finds its way down to the 'D' target at 21.45. I doubt it, but a further fall to at least p2=22.02 is neither illogical nor unlikely.
The reverse pattern shown nailed the recent top nicely, although it did not furnish the information that might have explained crude's latest conniption. Now I'm hearing that last week's plunge was discounting a 'peace' settlement between U.S./Europe and Israel's most murderous enemies. Netanyahu is too polite to tell those who hatched this suicide pact without respecting his or Israel's existential needs to shove it up their ass, but he will surely ignore it. If this is indeed what is driving oil at the moment, we'll tune it out until price action returns to its wonted, psychotic state. _______ UPDATE (Feb 11): $80/barrel has been pivotal to crude's swings since last August and is still the number to beat. The pattern shown projects slightly above it and would give bulls more credibility if the 80.08 target is exceeded, especially on a closing basis.
GDXJ has settled into a tiresome dirge comparable to gold's and looks vulnerable to a further fall to as low as D=31.62. First it will need to test the midpoint support at 33.44, which, because it closely coincides with some lows recorded in January, will take discernment to leverage. My suggestion is to use a 37-cent trigger interval to set up a 'buy' with equal potential. As always, a decisive penetration of p=33.44 would portend more slippage to p2=32.53, at least.
The rally off the last low, 82.42, has been so unimpressive that we must consider the possibility of more downside to at least p=78.05 as the most likely scenario for the winter months. TLT would be a screaming buy at that price, although without any guarantees of a rip-roaring rally capable of surpassing the December 2022 peak at 109.68. Not coincidentally, the chart of TYX, which tracks interest rates on the long bond, has signaled a 'mechanical' buy for a move to as high as 6.16% (!). That number seems unreal, since the economy, along with the banking system, would almost surely collapse long before rates got that high. Or would they? In any event, the buy signal is about as 'textbook' as they get, so we'll need to take it seriously even if we can't understand it.
I won't queer the voodoo magic of a major rally target I mentioned here last week by repeating it in boldface, but the number is 4950.00, a Hidden Pivot resistance, and I was itching to get short there. The actual high, a new all-time record, was 4935.00 -- close enough to the target that Mr. Market could conceivably be working behind the scenes to deny us a shot at a potentially big winner. However, Friday's close was above the midpoint of the day's range, and there's still a high-probability target outstanding in Microsoft, so we'll assume our opportunity to pile on is intact.
The 'mechanical' short I mentioned here last week came home to roost with a pop through the green line (x=193.54) on Monday. OE (Option Experiment) participants already hold a small bearish position in the form of a vertical put spread, but it expires on Friday and won't come alive unless the stock tanks $10. That's hardly impossible, but I was reluctant to open a new front ahead of the weekend with an additional position. We should trade with a bearish bias because of the 'mechanical' signal, so stay tuned to the chat room and your email notifications if you want to keep apprised. My strong gut feeling is that AAPL is much too hired to hoist itself above the 199.62 point 'C' high of the reverse pattern shown without pulling back first, possibly sharply.
I wouldn't trust a rally if it starts the week, but neither am I inclined to bottom-fish until such time as the futures drop into 'voodoo' territory just below 2000. A dip beneath two January lows near 2004 is obligatory in any event, so let's watch for it to develop. If and when that happens, we may be able to find a reverse pattern trigger of small degree to catch a ride north. Big, meaningless days seem to be cropping up with greater frequency lately, so we should resolve to remain unexcitable if anything interesting appears to be happening.
Last Thursday's pop to the green line (x=23.154) triggered a very promising 'mechanical' short, by which I mean to imply that the pullback from it has about an 80% chance of coming down to at least the red line (p=22.58) where partial profit-taking would be warranted. I missed the signal because I was focused on a pattern with a lower point 'A' high that needed a run-up to x=23.295 to trigger the short. We'll respect the signal in any case, starting the week with a bearish bias and a theoretical downside target at D=21.455.
GDXJ spent the week in an unpersuasive bounce from a voodoo number touched the previous week. An outside day on Wednesday that closed near the intraday low added to a mildly troubling picture, one that portends minimum downside over the near term to at least p=33.35 (see inset chart). Any slippage beneath that Hidden Pivot would of course open a path down to as low as 31.52. If we do any bottom-fishing, it should be at either p or p2=32.44.
