Current Touts

Silver took a dump after triggering what had looked like a promising 'mechanical' buy at 23.80, the green line. Its February Gold counterpart has held up better and appears primed for a rally to a profit-taking level at 2086, about 35 dollars above Friday's close.  Is Silver's recalcitrance a bearish divergence? I doubt it. It is probably just a variation on an all-too- familiar theme of jerking everyone's chain whenever possible. Let's cross our fingers and hope silver plays catch-up with gold in the week ahead.

T-Bonds have fallen moderately so far following a 100.57 top in this ETF vehicle that we'd anticipated precisely with the purchase of put options. The new pattern shown can be used to set up more trades now that TLT has tripped a reverse-pattern sell signal at the green line. There are two possible opportunities in prospect: 1) shorting near x=96.91 with a 'camouflage' trigger to reduce risk; and, 2) playing for a bounce from p=93.26.  If you are interested in the more immediate opportunity, please let me know so that I can provide timely guidance in the chat room.

After triggering a conventional 'buy' signal at the end of 2022, this vehicle has gone nowhere as it continues to toy with the green line. If this were a Warner Brothers cartoon, Daffy Duck would stick a bottle rocket up GDXJ's posterior to get things going. Perhaps if we visualize this, something will happen. In the meantime, we'll have to accept the fact that GDXJ is bound to move less energetically than gold futures because, no matter how high bullion contracts go, someone will still have to labor mightily to dig gold out of the ground.

February Crude has been on a 'mechanical' buy signal since early December, when a pullback first touched the green line. The futures have since gone flat, dancing a jig a 'x' that suggests DaBoyz are in no hurry to let it loose. Geopolitical mayhem, including the targeting of tankers in the Suez, has had surprisingly little effect, and we hesitate to ascribe this to ordinary forces of supply and demand. But with China's economy weakening and the U.S. headed as always into recession, perhaps that is the explanation. Crazy world! In any event, the futures have pussyfooted at the green line for long enough that the buy signal, even if still theoretically valid, is no longer enticing.  Look for quotes to fall below C=64.21 over the next eight to ten weeks, pulling gas prices down below $3 in most states.

The futures are bound for an all but certain test of the 4688.75 midpoint support, which I expect to fail. We'll wait for a verdict in real time, but p can be bottom-fished nonetheless with an rABC  trigger interval of 24.50 points (a= 4743.25 on 12/20). The $5,000 entry risk demands a 'camouflage' set-up on the 15-minute chart or less, so the trade is advised for skilled Pivoteers only.  The pattern looks reliable for trading purposes and targeting even though its A-B segment is unusually steep and elongated. That implies it would trigger a 'mechanical' short with a rally back to x from p or lower. _______ UPDATE (Jan 12, 9:03 a.m.): Surprising strength has trashed my bearish outlook, sending me back to the chart for a second look. It turns out the 'mechanical'-short set-up I'd found so striking never occurred. That would have required the decline from late December's highs to have touched the red line.  It missed by 11 points, actually, implying that any rally back up to the green line would signal strength capable of achieving new highs. So far, the effort has fallen shy by four points. The rally may yet fail, possibly after a breakout to a marginal new peak. We'll keep close track in any event, and act accordingly, as the futures continue to frolic menacingly in the 'discomfort zone'.

Sellers obliterated the 187.47 'midpoint support' of the pattern shown last week, clearing a path for more downside to at least D=175.31. Any one- or two-level rally in the meantime would set up an attractive 'mechanical' short.  Bottom-fishing at D will be a high-odds play as well, although the pattern, even though an rABC, may be too obvious for a penny-ante stop-loss. In such situations, shorting puts is likely to be a better tactic than buying calls.

I've included MSFT on the list this week because the bearish pattern shown offers as much certitude as AAPL's.  The initial plunge through the red  line on December 4 not only 'guaranteed' a further fall to at least D=352.89, it also made the 'mechanical' short  at the green line on December 13 an almost certain bet. The situation should be good for a winning option trade on the way down, but if the best opportunity should involve naked shorting, I'll provide more detailed guidance in the chat room on request.

Two conventional ABC patterns are driving crude higher to, respectively, 75.80 and 77.48. Both of these Hidden Pivot resistances are shown in the chart, with HP levels that should be tradable. That implies that a pullback to the green line from Friday's high at our sweet spot would trigger an appealing 'mechanical' buy.  Also, a subsequent rally to the target could be shorted with a tightly constructed reverse pattern.  The larger ABC has a midpoint resistance at 73.44, and an 'x' green line at 72.26 that also would be buyable. Bottom line: Expect Feb Crude to continue higher, with no dips below C=69.28, to at least 77.48.

Just a little lower and it will be Katie-bar-the-door time for the buck. Last week's moderate rally pushed DXY out of the red zone, but the trend will have to exceed the 104.26 peak recorded on 12/8 to become a safe bet, if only for a short while. In retrospect, the failure to push above the 107.99 'external' peak recorded last February foreshadowed problems. Bulls turned timid just when they needed an extra inch of push, and that may have sealed the dollar's fate over the intermediate term.