We could probably flip a coin at the start of each week to determine whether to trade this rabid badger from the long side or the short. It is skittish enough to generate profits in either direction, and to do so in Hidden Pivot Method-fashion -- i.e., even when we are wrong, Although last week's update featured a bullish chart, my bias is bearish and favors the 67.88 D target. That would make the futures a 'mechanical' short at x=86.79, although we'd need to be extra cautious because of the jittery price action of the pattern's C-D leg since mid-July.
Bertie's deep-pocket sponsors lost no time putting the squeeze on shorts with market-moving news. For one, there was the rumor that the U.S., Canada and the Philippines used bitcoin to pay ransom to the hackers who briefly shut down air travel in those countries. The felons were likely trained and sponsored by China or North Korea, making bitcoin seem not merely useful, but even a little respectable as the currency of choice for highly sophisticated criminals. Also providing artificial lift for the cryptos was a perfectly timed announcement that FTX, the exchange bankrupted by Sam Bankman Fried, might be resurrected. If the cabal driving bitcoin higher can vault the 25,203 point 'C' high of the pattern shown (inset) -- an even bet right now, in my estimation -- they'll have an unimpeded shot at 30,000-plus.
Buyers closed this T-Bond proxy above the midpoint resistance for two consecutive days last week. That is usually a reliable sign that the rally will continue at least to the next level, in this case p2=111.76, so we shouldn't be too concerned with Friday's relapse. If the weakness continues down to x=103.54, especially within two days, that would trigger a 'mechanical' buy, stop 99.42, with excellent odds.
The dollar picked up no support on the way down through p=103.33, but that does not necessarily portend another failure when it reaches the 'D' Hidden Pivot support at 101.03. However, the seven days of distribution that have occurred since the drop from p to p2 have likely tilted the odds toward a breach of D. If a decisive one occurs, use 100.18 as a new minimum downside projection. That is the D target, on the daily chart, of A=113.15 on November 3.
The chart is meant to put Friday's giddy short-squeeze in perspective. If you are a bull and feeling a little discouraged by what you see, that is what I had intended. What better time to rack bears than in the final hours of a week that was more comic relief than hard news? Biden's docugate was outed entertainingly by Tucker Carlson as a not particularly sinister plot by 'Permanent Washington' to make certain that the thieving, senile old coot doesn't run again. It also has the beauty of allowing many Democrats and even a few Republicans to evade discussion of far more serious crimes that would implicate them all in shadier misdeeds than misplacing classified documents. In this temporary climate of political unseriousness, the S&P 500 was aggressively stoked to Mau-Mau bears, lest they become cocksure about the extremely dim prospect of new all-time highs with recession-or-worse stalking the U.S. and global economies. Eggheads in Denial Incredibly, the eggheads, including a few Nobelists, remain in denial that a U.S. recession has even begun. The stock market is not so stupid and may even have begun to recognize that lower inflation could be leading to an economically fatal debt deflation. How else to explain the headless-chicken feints in both directions on news that prices for some things are coming down, if much more slowly than they rose? Like the keister bandits who control bitcoin's price, the svengalis of Battle Creek have seized on markets numbed by chaos to jack cereal prices six ways from Sunday. For instance, the 16-ounce box of Cheerios that once sold for $4.70 is now a 14-ounce box for $6.99. If you think the trend has gone far enough, be careful what you wish for, since, in the unimaginably hard times that may lie ahead, we could
A 41.17 target first signaled more than four months ago with GDXJ trading under 30, looks all but certain to be reached this week. As slow as it was in coming, it was never in doubt after buyers gapped GDXJ past p=33.49 on Nov 9. Adding to the picture of strength was the absence of any pullbacks sufficient to trigger a 'mechanical' entry of daily-chart degree. Now we can expect a further ascent to at least p=49.02, a midpoint Hidden Pivot correlated with a 'D' target at 72.73 (!). As always an easy move through any of the levels in this pattern can be taken as a sign that the uptrend will continue. We'll look for low-risk boarding spots along the way for subscribers seeking either to augment long positions or initiate new ones.
AAPL's sucker rally has come from a technically inconvenient place somewhat above an authoritative trendline, but this only mildly diminishes the likelihood the stock will revisit the lows and test them unsuccessfully enough to reach the line. In the meantime, though, we should be ready to exploit a rally to around 145, where a second trendline with presumptive stopping power comes in. More immediately, the hourly chart says full speed ahead to at least 136.77 (A=124.76 on Jan 5) over the near term. You can short there with a vertical put spread expiring within 4-9 days, but check the chat room for more-specific guidance if the opportunity looks close. ______ UPDATE (January 17, 10:35 p.m. EST): Subscribers reported buying the Jan 20 132/130 put spread for around 0.20. For now, offer half of them for 0.45, good-till-canceled.
The dollar's steep correction since late September will have three good chances to bottom in the weeks ahead, respectively at 101.82 (0.04 from Sunday' night's low), 101.03 or 100.18. That last Hidden Pivot support comes from the largest ABCD pattern shown in the chart (thumbnail inset) and should be familiar to those of you who have been following my Dollar Index forecasts. It seems the most likely of the three pivots to produce an important low, although the two Hidden Pivots above it will be tradeable for bounces, at least, via tightly stopped bids.
The option trade in USO that I advised ahead of last week's rally in crude paid off at as much as 5-to-1, even for subscribers who got hosed initially by paying the 0.49 I'd advised for a vertical call spread. This demonstrates yet again how forgiving ''mechanical' entries are. Let's stick with the same bullish rABC pattern to signal any further opportunities as Feb Crude ascends to as high as D=87.43 in the weeks ahead. That could mean initiating another 'mechanical' buy at the green line (x=74.59), but it will depend on how things play out as the new week gets rolling.
Buyers handled the 1907.10 Hidden Pivot resistance with ease, then closed comfortably above the 1910 top of a daunting supply zone created when gold was distributed in May and June ahead of a $200 downdraft. This all but guarantees more robust upside, presumably with a test of $2000 that has beckoned since last spring. We can trade the rally as low-risk opportunities arise, the first of which could come from a small peak (i.e., look-to-the-lefter) at 1943.70 recorded in late April.
