Friday's rally was impulsive on the hourly chart and the best we've seen in a week. However, if bulls meant business, they would have taken out the 1849.30 peak recorded on October 3 to complete a hat-trick of 'priors'. Instead, they stopped a hair short of it, presumably too out-of-breath for a final-hour sprint to the finish line. We should give them the benefit of the doubt nonetheless, since the shallow correction off the intraday high suggests that at least somewhat higher prices are coming. My advice is to keep your expectations low until we've seen how the rally interacts with a couple of minor Hidden Pivot resistances. _______ UPDATE (Oct 12, 8:55 p.m.): A sharp rally reversed just as sharply this morning when the regular session began, but not before buyers had pushed the futures above some external peaks recorded at the end of September. This generated a bullish impulse leg on the hourly chart, shortening the odds of another leg up once the correction has run its course.
Silver did some agonized basing last week, all of it beneath a Hidden Pivot 'D' support at 21.38. Too late and too deep to save the day? We'll give the rally a week to develop and the temporary benefit of the doubt, but it would need to push above Sep 29's spike high at 23.80 to even hint that bulls may have regained the momentum of 2020. A monthly close above 26.67 would likely clinch it, however, since that's a key 'midpoint resistance on the weekly chart (A=11.640 in March 2020.)
The monthly chart offers a sobering perspective on what it would take to put GDXJ back on the bullish track it rode to $66 in 2020. This gold vehicle has been mucking around in no man's land ever since it tripped a theoretical buy signal at x=37.41 in 2014. The 49.02 midpoint Hidden Pivot will be a crucial threshold, but it lies 54% above, so there's no point in thinking about it now. A more realistic number is 33.79, a tick above a small but technically significant look-to-the-left 'external' peak recorded on September 25.
The chart shown in the inset is too clear and compelling to suggest TLT will somehow avoid falling all the way to the 80.84 target. Yes, important turns have been known to occur midway between p2 and D, especially in too-obvious patterns that have attracted a large following. But the impressive weight of the downtrend over the last two months would seem to argue against a turn occurring without bulls having done their full penance. Look for more slippage in October, but be ready to back up the truck to buy 'em with a tight stop-loss if and when the target is achieved.
The last push wasn't strong enough to get the futures to the 98.72 target (a presumptive weigh-station enroute to the $117 target of a larger pattern featured in last week's commentary). However, the thrust in early September that impaled a midpoint resistance at 81.42 was sufficiently powerful to suggest November crude will head up to the target once this correction has run its course. To get a precise handle on trend strength, I'll suggest tracking a red-line 'mechanical' buy at 81.42 that would take a 75.65 stop-loss. If the trade makes (hypothetical) money with a move to at least p2, it would shorten the odds of a further move to D=98.72. If not, I'll need to adjust the odds for a blowoff to $117.
The uptrend easily exceeded the 106.84 rally target given here last week, so I am presenting a longer-term view with a much more ambitious objective at 124.72. More immediately, however, there's a Hidden Pivot midpoint resistance at 112.16 that we can use as a minimum upside projection for the near term. As always, if buyers surpass it easily, that would portend more upside to at least p2=118.44, and thence to the D target itself.
November Crude has pulled back sharply after topping last week a hair from the 94.76 Hidden Pivot target billboarded here. The weekly chart not only allows for another burst higher, most immediately to the 98.65 target shown here; it can also be used to project a blowoff to as high as 117.22. Indeed, there is nothing unreasonable or illogical about this interpretation. Moreover, one could reasonably infer that the decisive penetration this month of p=90.67 has already made a move up to 117.22 no worse than an even bet. _______ UPDATE (Oct 2, 10:56 p.m.): The correction targets 87.20 most immediately, but an easy breach of this Hidden Pivot support (90-min, A= 95.02 on 9/27; B= (90.35 on 9/29) would imply the correction has farther to go.
TLT has turned higher because it is synched with a 4.81% target for the Long Bond that was precisely achieved last week. However, there is room for another leg up, to 4.98%, and therefore room for TLT to fall commensurately to the 80.84 target shown in the chart. TLT's rally should be tradeable nonetheless, and some subscribers have jumped on call options suggested by 'Spartacus' in the chat room. Implied volatilities are running at least a third higher than historical, so the bet will face some headwinds no matter what happens. It is not encouraging that the rally from Thursday's 87.10 bottom, steep though it was, could not push impulsively past last Wednesday's 89.62 'external' peak. Here's the chart.
The futures finished the week with a whoopee cushion rally that allowed subscribers who got long the day before to come away with a profit of as much as $3,000 per contract. The pattern, with a 4462.25 rally target, remains intact for next week, provided the E-Mini can hold above the 'C low at 4277.00. After topping on Friday, it came down hard, giving up all the day's gains and settling near the green line (x=4323). This generated a theoretical 'mechanical' buy signal for a presumptive second shot at p=4369, but I would not have advised it so close to the final bell. _______ UPDATE (Oct 3, 8:13 a.m.): The futures are struggling to hold above d=4299 of the small reverse pattern shown in this chart. If this 'hidden support' fails as I expect it to, the December contract should be presumed headed to D=3956 of the larger pattern. It is gnarly but not illogical.
Although AAPL's fall to the 164.90 target (see inset) was all but ordained two months ago when hard selling crashed the midpoint support at 181.57, the stock's handlers have made it an ordeal for bears to profit easily. Shorting 'mechanically' on the squeeze up to 189.90 worked well, and I expect bottom-fishing at 164.90 to be a money-maker too, since the pattern is not very obvious. The rally would have the potential to hit 182, but I'll suggest using a trigger interval of $1.50 to get long. If you are unsure about how to do this, ask in the chat room for guidance when appropriate.
