We should probably expect crude quotes to reverse upward whenever pump prices slip below $3, since that would be just a little too peachy for the approximately 233 people who drive in the U.S. We can only hope the 78.86 Hidden Pivot target shown contains crude's current surge, since a breakout above that number wants reasons to explore a void on the chart that extends all the way up to $85/barrel. At the level, pump prices will be pushing $4/gallon, so let's cross our fingers and hope Houthis and the Blow-upfish don't up their game in the Persian Gulf. .
Judging from the ease with which buyers pushed through the midpoint resistance at 4558, the futures are headed to at least 4950.00, the Hidden Pivot rally target shown in the chart. The pattern is too obvious to be of much use for getting short with pinpoint accuracy , but it will probably do for government work. It lies 5.3% above these levels, compared to a very important target in MSFT that is 8% above. Those two numbers could synch up nicely if the tech stock's ascent continues to outpace the S&Ps.
Just a small push this week will bring AAPL up to the green line, where it would become a promising 'mechanical' short. I would expect a profitable pullback to at least the next level, p=187.47, but I doubt the stock is ready to fall into the abyss. To remind you: The green line (x=193.54) is not a support, resistance, Hidden Pivot or target, just a place at or near which we sometimes initiate trades. We'll look for an opportunity to do so with a risk-averse 'camouflage' set-up when the stock reaches the line, presumably on Monday if Friday's nutty wilding spree continues.
The dollar made yawn-worthy headway last week with a one-day leap for who-knows-what-reason. The single prior peak the move surpassed on the daily chart was an 'internal' rather than the 'external' we require to signal a true impulse leg. The first such 'external' lies at 104.26, and it can serve as our minimum requirement for signaling a move capable of rejuvenating the long-term bull begun in 2011. Even then the rally would be suspect, for it would still fall well shy of the 107.99 'external' high from November 2022 where a bull run crapped out last October. Our skepticism and a high bar are warranted, since the dollar must weather a Treasury auction calendar for 2024 that will require $8.5 trillion of borrowing to finance rollovers and U.S. budget outlays. Please see my current commentary for additional notes on this.
Gold has relapsed to the green line twice since triggering what had looked like a fine mechanical buying opportunity shortly before Christmas. It has done little since but tease, vex and antagonize, but if past is precedent, the tedium will be broken soon by a big rally to the 2184.80 target shown. That's no assurance that buying now, at levels beneath where we might have been long anyway, will produce a better trade. Since the futures remain in theory a good bet to rally back up to p=2086.40, we'll continue to look for ways to get aboard with risk tightly controlled. The entry risk for the 'textbook' 'mechanical' buy was $20k on four contracts.
Although Feb Gold had the decency to leave us with a little hope, Silver is not being so kind. Its clean destruction of the midpoint pivot (p=22.868) leaves little room for doubt about whether the weakness of the last month will continue on down to the 22.01 target shown. In the meantime, we should plan to get short on a blip to the green line (x=23.295), since the 'mechanical' aspects of the trade look promising. The pattern may also be gnarly enough to use D=22.015 for bottom-fishing.
TLT feathered down to the 93.23 midpoint support of the pattern shown, but the low created by the small bounce so far from this Hidden Pivot will need to be tested before we can infer the bull trend begun in October remains healthy. The corrective move could come all the way down to D=85.89 without damaging the recovery. However, the presumptive power of the next rally leg will be greater if the correction from December's 100.57 peak goes no lower than p=93.23. This is the case so far, since last week's low occurred at 93.26.
This mudder was a hair shy of triggering a conventional 'buy' signal at the green line when last week ended. My gut feeling is that the signal will ultimately produce a profit with a move at least to the red line. Why should Mr Market be so kind to us? Don't count on it. More likely is that although the futures will indeed reach the red line, this will occur on a gap through x=33.94 that leaves our bid choking on dust. Even so, we can always try to get aboard by outsmarting the s.o.b. _______ UPDATE (Jan 22, 11:12 p.m.): A gratuitous new low has brought the green line down to 33.92 and the red one to 34.53.
We'll need to be on our guard as the S&Ps frolic in the discomfort zone, just an inch above the then-record highs recorded at the start of 2022. The Mother of All Tops is very likely to come with a series of upward spasms, each of which creates a marginal new high. However, looking casually at this chart, the eye 'wants' to see one of those highs occur on a nasty and distinctive spike that presumably would disembowel the last remaining shorts. This may require a running start from below 4500, and if the futures were to fall to there now, I would still expect one last run-up. Meanwhile, Microsoft seems no less likely to reach the 430 target I've been drum-rolling as a bellwether, even if the process is as fraught as the one I've described above for the S&Ps.
A moment of truth, if not THE moment, likely impends as AAPL rises toward the green line. Assuming it gets there this week or perhaps early next, the stock would become as juicy a 'mechanical' short as we could hope for. If, instead, it gores bears with a move above the pattern's 'c' high at 199.62, that would surely be bullish, notwithstanding the head-fake possibility I've warned about in the ES tout (see above). A third possibility is that AAPL will fall to d=175.31 of the reverse pattern. That would create a bottom-fishing opportunity that we should not pass up, even if the expected bounce proves to be a short-lived last gasp for this aging bull.
