Let's not waste too much time pondering what this sad sack of tailings is going to do next, since it hasn't done much of anything for more than a month. That's if you don't count the meaningless spasms that occur whenever the latest drivel from the Fed hits the tape. The futures will always be tradeable, of course, but only with the kind of close attention that's hard to muster with America in pre-holiday mode ahead of a three-day Memorial Day weekend that is just two weeks off. The work ethic, and all. I'll mention in passing that the June contract has triggered two profitable 'mechanical' shorts since the bear rally began in October, each producing a $12,000 win per contract. Considering the amount of time traders spent screwing the pooch in the process, that worked out to around $3.57 per hour. If ES falls anew to the red line, however, racking up a third 'mechanical' winner, I'll shift my focus to the 3424.50 downside target of the big pattern, shown here.
I've used a pattern similar to the one in Silver to show that both are in a precarious place, poised to fall at least 2% if their respective midpoint Hidden Pivot supports are decisively breached. So far, the pivots have held, but we'll need to monitor price action closely this week. Like July Silver, June Gold is a spec buy at the moment, presumably using a reverse-pattern trigger on a chart of small degree. Doing so on the daily chart would risk a little more than $1000 per contract initially, far more than the $150 or so we should be willing to part with. _______ UPDATE (May 16, 5:22 p.m.): June Gold has fallen into the bog of weak consolidation that occurred in the last two weeks of April. The most bulls should hope for is that the futures rebound sharply after maliciously dipping beneath the bog's low point, 1980.90 on April 19. Here's the chart.
Last week's plunge precisely to the red line, a midpoint Hidden Pivot support at 23.95, has validated the pattern and its 21.46 target. This is not necessarily as bearish as it sounds, since the futures will need to exceed p decisively, then close beneath it for at least two consecutive days, to imply they are bound for p2=22.704. For now , however, they would become a spec buy using an rABC trigger, since the midpoint pivot is always a logical place for a price reversal. Please nudge me in the chat room at the appropriate time if you are interested. ______ UPDATE (May 16, 6:13 p.m.): Sinking, soon to drop off the edge.
AAPL is a major contributor to the doomed 'wealth effect' that has kept the world from falling into a deflationary abyss since the covid hoax. Friday's wilding spree was a classic example, since the stock's gap-up opening generated around $70 billion of gaseous 'wealth' the instant the regular session began. It seems ridiculous with the U.S. facing a real estate collapse later this year or early next, but the chart of the world's most valuable stock has been pointing to at least 177.11 since early March. AAPL was trading 30 points lower at the time, a fire-sale bargain as far as the Big Boys were concerned. Its relentless rise since, along with that of Chipotle, implies that a bear market is not coming any time soon. Moreover, Chipotle's rally target at 2739, 700 points above where it is currently trading, suggests it and AAPL will continue to tag-team higher after the latter finishes consolidating for its impending thrust to 177.11. _______ UPDATE (May 19, 11:36 a.m.): I just now realized that if a very subtle one-off A is used to project a top for AAPL, today's high at 176.39 came within 13 cents of fulfilling it. The 177.11 target we've been using all along represented a theoretical maximum for the move, but the stock could still fall 72 cents shy of it if it fulfills the one-off target at 176.52. I prefer to get it very exactly right on option trades, but it would be a shame to miss out on putties for want of another 72 cents of upside on a move that has taken months to play out. Here's the chart, but I will take a look at put prices and see if there is something appealing that I can recommend. (Check the chat room for my recommendation).
The chart shown, with a downside target at 56.90, is one of the few I've presented here that actually might not be good enough for government work. The A-B impulse leg is one that only a mother could love, since its 'B' bottom surpassed no distinctive prior low. On the other hand, no fewer than three kamikaze dives have reversed almost precisely from p and p2 Hidden Pivots. Regardless, the theme I have sounded here for nearly a month -- that the Saudi cutbacks amounted to a toothless threat -- has helped keep us on the right side of a downtrend that evidently knows a global recession when it sees one.
Yes, it's a bull market, but not one that has been much fun. My current rally target is 2138.30, just 134 points above Friday's settlement price. Riding this bee-stung Brahma became particularly unpleasant last week when a vicious spike up to 2085 on Wednesday reversed precipitously to finish the week just slightly above where it began. For the record, the dive on Friday triggered a 'mechanical' buy at the green line (x=2020.30), stop 1980. The usual caveats apply. ______ UPDATE (May 12): The 'mechanical' trade was worth as much as $3,600 per contract, although it generated little buzz in the chat room. The 2138,30 rally target remains viable.
Silver loves to tease traders by tiptoeing up to old highs and lows, then reversing with sadistic brutality. You'd think the victims would have caught on by now, but if and when they do, the gremlins that animate this vehicle will have moved on to a different, equally nasty game. For all its histrionics, the ABCD pattern that has informed our bullishness for the last two weeks remained intact along with its 27.150 rally target. The futures already tripped a profitable 'mechanical' buy on a pullback a week ago to the green line, and it would trip another if it takes out Friday's low at the beginning of the week. That would amount to sloppy seconds, though, and so I will offer no guarantees.
Friday's irrational exuberance was possible because there was no structural resistance between 4112 and 4161 (see chart inset). DaBoyz pushed DaFutures to within an inch of the higher number equal to the day-earlier peak, but they lacked the guts and conviction to get past it. Evidently unknown to them is that a follow-through to at least D=4199.75 is all but certain, barring a collision between Earth and an asteroid over the weekend. A pullback to the red line (4131.00), a trade I don't often recommend, would trigger a 'mechanical' buy, stop 4108.00. _____ UPDATE (May 10, 10:43 p.m.): A day of crazy price action generated many profitable trades that were reported in the chat room. The big, bullish picture is unchanged.
GDXJ triggered a 'mechanical' buy last week that got nowhere near the bids I'd suggested. Actually, the swoon didn't even trip a 'conventional' buy, since the week's low missed touching the red line by six cents (see chart inset). We may have to take what we can get if we're going to be on board for the finishing stroke to the 45.56 Hidden Pivot target shown. I didn't mention it here explicitly last week (although it was shown in the chart), but it has been our lodestone since mid-March and never in doubt.
TLT has been biding its time since last December, trapped in a tedious range until it's ready to break out for a shot at the 115.32 target shown. Last week's dip to the green line triggered the first 'mechanical' buy signal we've seen on the daily chart this year. It would take a feint to the downside exceeding C=98.88 to stop out the trade. My hunch is that the next time buyers revisit the red line, a midpoint Hidden Pivot resistance, they will mean business.
