Current Touts

Even though last week's extension of bull-mania exceeded the 5220.00 target shown by only a smidgen, it's still creepy. The 'hidden' resistance should have held, if for no other reason than that the pattern is too gnarly to be common knowledge. Granted, the point 'B' high is pork sausage, as noted here last week. But that's still not a good reason for its target to have been exceeded so easily. The rally did reverse to produce a close beneath the target, so it's still possible we'll see rationality reassert itself in the week ahead with a persuasive plunge. Unfortunately, SPY failed by two points to achieve a corresponding target at 520.54 before the sell-off began, so we took no short position with puts. _______ UPDATE (March 13, 11:03 a.m. EDT): The minor rally pattern shown has already produced two 'mechanical' winners while becoming increasingly gnarly, so expect it to produce a third profitable trade: shorting D=5287.25 when the futures get there. A small reverse pattern should be suitable for this purpose, but be sure to take a small partial profit if it works. You could also buy a pullback to p2=5204.00 'mechanically,' stop 5176.25.

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.

Although I promoted a 2307 target here last week, I'm going to dial it back a little with the 2276.60 target of a larger pattern. For reasons of clarity alone, it should take precedence over the higher number, and therefore be viewed as a potential rally-stopper. In any case, resistances at both p and p2 were violated so brutally that there should be little doubt about using 2276.60 as a minimum upside projection. The rally was too steep even when it began early last week to catch an easy ride. The same conditions will likely obtain this week, so any attempt to get aboard would need to come from an intraday set-up on the lesser charts.

I characterized last week's price action as 'mildly discouraging' in the chart (see inset), but compared to gold's stellar performance, Silver's dirge was not merely discouraging, but pathetic. The rally stalled almost precisely at p=24.76 of a pattern that projects to 27.34, and I can offer no assurances that the resistance will get pulped next week. Whatever happens, I doubt that gold can go much higher without dragging silver along. Please note that a pullback to the green line (x=23.47) would trigger an appealing mechanical' buy, stop 22.18.

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.

The Hidden Pivot pattern shown, with a major rally target at 5165.25, is a poor specimen because its point 'B' high failed to exceed the 4765 'external' peak recorded in April 2021.  However, it should be considered good enough for government work, meaning the target should show some stopping power and could perhaps even prove fatal.  A reverse pattern trigger for the short is already in effect, predicated on a 143-point drop that touches 5006.50.  The implied entry risk on four contracts is $28,600, so we'll need to cut that down to size with a 'camouflage' trigger if and when the trade is signaled.

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.