Current Touts

With the Middle East war threatening to escalate on Friday, it's odd that sellers couldn't deliver a knockout punch. They spent the entire session running the futures up and down within a 20-point range, turning what should have been a rout into a merely moderate decline. Not only did they fail to bury the broad averages, bears couldn't even reach the first of two downside targets in the E-Mini S&P futures at 4100.00.  The second lies at 4o68.50, and it seems likely to be reached by Tuesday if not sooner. We won't necessarily attempt bottom-fishing because corrective rallies have been pretty anemic lately. ______ UPDATE (Nov 1, 4:08 p.m.):  Anemic price action has mutated into a full-blown short squeeze, investors either havinginginging grown bored with the pace of Israel's invasion of Gaza or completely forgotten about it. For now, use the 4310.50 target of this pattern as a minimum upside objective.

A 146.13 target is the most pessimistic I've identified to date, but in the interim we should use the 159.98 Hidden Pivot support shown in the chart as a minimum projection. An $8 rally to the green line (x=176.75) would likely be construed by many if not most investors as a bullish resurgence, but we should see it first as an opportunity to get short there 'mechanically'. Alternatively, we'll try bottom-fishing with call options if AAPL continues along its tortuous path lower.

The monthly chart shown offers an unorthodox view that should be held in mind as the dollar makes its way higher. Much higher. Last week I presented a weekly chart that went back to 2019 with a 124.72 target. This one stretches back to 2004 and has a somewhat less ambitious 'D' target at 119.37.  I'll suggest sticking with the earlier version to get a precise handle on trend strength in the weeks ahead. Specifically, you should use its 112.16 midpoint resistance as a minimum upside projection for the next six to eight weeks. However, in the highly unlikely event of a vicious swoon to the green line of this monthly chart (x= 96.03) , you'll be able to recognize it for what it is: just a correction.

With gold in one of its steepest climbs in recent memory, the 2068.00 rally target billboarded in my last update looks like a lock-up. The December contract's midweek stab through p=1945.80 all but clinched this outcome, along with a likely test of May's $2129 record high. That would bring into play an even bigger, bullish pattern begun in November 2022 from 1711 and which targets 2241.90.  These are the most ambitious targets I've broached in a year, but my high confidence is commensurate with the rally's steepness and the intimidating difficulty of climbing aboard.

Silver's rally last week wasn't quite as impressive as gold's, but it did manage to somewhat exceed the 23.70 target of the middling 'reverse pattern' we'd been using to stay on the right side of the trend. The next significant target is 27.18, a Hidden Pivot derived from a conventional pattern on the daily chart where A=20.61 on March 8. However, because we can assume silver will not ultimately lag far behind gold, I'll air a 28.15 target that is shown in the inset chart.  Critical resistance, and possible confirmation of the pattern, will come at p=24.83, my minimum upside target.

It's going to take investors a while to get used to the idea that higher gold prices must eventually produce higher prices for mining stocks. However, their skittishness is understandable, given the pounding, false starts and countless disappointments gold bugs have endured since prices topped in 2011. This phase of the fledgling bull market targets 72.73 (monthly chart, A=19.52 in March 2020). However, for reasons of practicality and tradeability, we can use the daily chart shown (inset), with a 42.09 target and minimum upside over the near term to p=36.28.

Although AAPL ended the week in the same precarious place as the E-Mini S&Ps, we shouldn't forget that it wears a wing suit for such occasions. The stock's institutional sponsors let it fall only when it suits their needs -- in this case a presumptive eagerness to load up at p2=159.25, nearly $14 below the current price. They've had more than two months to distribute Apple shares in preparation for this maneuver, so let's not feel sorry for them if their holdings deflate precipitously for a little while. The speed at which the stock falls will tell us how successfully they've been and how eager they are to run the stock back up to some insane height. The news backdrop features a nasty decline in iPhone sales in China, one reason we can be confident the bear market begun in mid-July from 198.11 will eventually find its way down to at least 146.13.

We've been using a 117 target to discount the horrific geopolitical climate, but for trading purposes let's focus on the 98.69 target of the pattern shown. It is affirmed by September's powerful thrust past the 80.85 midpoint resistance, but also by the difficulty crude has presented for anyone wanting to get long, even by way of last week's all-too-fleeting dip to a 'mechanical' buying trigger at p=80.85. Gasoline prices dipped as well, but they will be headed higher soon if December Crude is in fact on its way to at least 98.69.

The week ended with an unsettling pause when the futures went into a trance rather than leap off a cliff. Settlement was just above a low made on October 4, beneath which lies a nearly 100-point drop to a secondary Hidden Pivot at 4138.  What shocks is that DaBoyz did not cause the futures to feint briefly beneath the low, the better to run them up the wazoo of shorts enjoying a rare moment of self-satisfaction. In any event, the 100-point fall looks like it's in-the-bag, even if half of it occurs Sunday night. That would make the futures a potentially opportune buy when they reach p2=4138.