The ostensibly bullish pattern shown looks primed to fail, but I am featuring it anyway because it looks almost too 'textbook' not to work. Almost. Granted, winning 'mechanical' set-ups are supposed to seem scary when they trigger, but in this case we'll pass up the opportunity and watch from the sidelines. Were so promising a pattern as this to seven out, it would add to the evidence that the bear 's full fury is not yet spent. Nor is it a sign of good health that a downside target at 3850 that had been five months in coming has produced a measly 10% bounce. Here's a chart for the September contract if selling spills into the new week. The downside target is 3708.50, and judging from the way bears crushed the midpoint support on Friday, it will be achieved. ______ UPDATE (Jun 15, 12:24 p.m.): The 3708.50 target caught the exact-to-the-tick low of this week's 200-point avalanche, enabling numerous subscribers to report instant, substantial profits in the Trading Room. The bounce so far has been 55 points, but bulls should be troubled that it wasn't twice that. We'll give it another day to see if short covering can do what bulls evidently cannot. _______ UPDATE (Jun 16, 10:22 p.m.): Bulls will have a chance to turn things around at p2=3678, but if this feat of engineering fails on a Friday as seems likely, look for more slippage to the 3502.00 target. A tradeable bottom is likely if that target is achieved.
This will come as scant consolation to long-term investors who have suffered through three months of corrective pain and tedium, but the recent low failed to generate a bearish impulse leg on the weekly chart (see inset). It could still happen, but the implication of a second try would be that bears don't have the conviction to crack 1700. Whatever happens, bullion is just a trade at the moment and nothing more, with a time horizon of perhaps 2-5 days. _______ UPDATE (Jun 13, 10:13 p.m,): Here's a fresh chart with a 1773.70 downside target that is probably the best that bulls can hope for over the near term. A rally to x=1855.30 would trip an enticing 'mechanical' short, stop 1882.60, The trade is recommended for Pivoteers who are proficient with 'camouflage' triggers, since the initial risk on four contracts would be around $12,000 theoretical. ______ UPDATE (Jun 16, 10:32 p.m.): The rally tripped the 'mechanical' short noted above, but I am still recommending the trade only to subscribers proficient with 'camouflage' set-ups.
July Silver tripped a promising short at the green line on May 27 that is showing s small profit. Friday's swoon did not quite reach the red line (p=21.12) where half the position might have been covered 'by-the-book', but the trade still looks likely to work. We'll be better able to judge how likely a further fall to D=18.90 is over the next few weeks, but the A-B impulse leg is steep enough to imply the target will be achieved. _____ UPDATE (Jun 16, 10:36): The short could have been covered for a $6600 profit at p=21.37, but if you still hold a partial position, exit now.
The futures wasted a week of our trading lives screwing the pooch, failing even to trip a 'mechanical' buy at the red line, let alone at the green as we prefer. This implies that Friday's weakness was just noise and that ES remains bound for the 'D' target. I've raised it a tad, to 4309.00, to correct an inscrutable error that I blame, as I am wont to do, on quirks in the Tradestation platform. You can use 4309 as a lodestar for bull trades, since the implied 200 points of upside leaves plenty of room for profit. The pattern looks too obvious, even though it's a reverse ABC, to allow a precise and painless short when D is reached. However, I still like it as a place to attempt shorting, and I would therefore suggest using a 'camo' trigger on the very lesser charts when the time comes. Stay tuned to the chat room and your email 'Notifications' if you would like further guidance on this. Please note that the unexpected swoon to x=3932.88 would trigger an enticing 'mechanical' buy, stop 3807.00. ______ UPDATE (June 6, 5:21 p.m.): Cancel the trade, since there's not much swooning going on. It could be distribution, actually, and there's no point in exposing ourselves to it. _______ UPDATE (Jun 10, 12:13 a.m.): A drop to the green line (x=3932.88) would trigger a 'mechanical' buy, stop 3807.00. I am not recommending the trade, however, even executed with 'camouflage', because of how sickly the futures looked all week. Ahead of the weekend we should be doubly cautious.
We've been using 140.12 as a big-picture target, but let's focus on a lesser one at 127.94 for now. Friday's tentative stab through the 119.57 midpoint resistance associated with the latter number, a Hidden Pivot resistance, was not sufficient for us to infer that a continuation of the rally to at least 127.94 is a done deal. However, a pullback to the small pattern's green line would trip an enticing 'mechanical' buy. Since entry risk would exceed $4k per contract, the trade is suggested only for those who know how to cut the risk down to size with a camouflage set-up. _______ UPDATE (Jun 16, 10:40 p.m.): During today's 'requests' session, I raised the possibility that crude had made an important top earlier this week at 123.68. If so, it will likely be found to have been attributable to the collapse of China's manufacturing sector and the prospect of global recession. Let's move to the sidelines for now.
The chart implies that I am cautiously bullish, but that's a small exaggeration. The recent dip below 1800 seems to have exhausted sellers for the time being. However, bulls, such as they are, appear to lack the energy or enthusiasm for turning things around. For starters, they would need to surpass early May's 1917.60 peak to generate a bullish impulse leg on the daily chart. In the meantime, there's no point getting excited about gold's prospects until this happens. A relapse that breaches the 1792.00 low would have very bearish implications. Alternatively, if gold shocks with a powerful rally that blows up p=1937.20, we could justifiably take an earnest interest in the 2082.30 target, which is theoretically in play because the green line has been touched.
I'm using a more conservative pattern than in gold to project higher prices, since the May bottom at 20.42 was even more dispiriting than the corresponding one in AU. So far, the most bullish thing you could say about the rally is that it did not give us an opportunity last week to bottom-fish 'mechanically' at the green line. On the other hand, penetration of p=22.17 to the upside has been tentative and labored so far, implying that even the relatively modest 'D' target at 29.93 is not a done deal. I will provide trading suggestions if there appears to be interest in bullion in the chat room, but I am available to vet your ideas in any case.
AAPL got pounded Friday, but it would take another drubbing to bring it down to the green line at 139.99, where the stock would become an enticing 'mechanical' buy, stop 132.60. There would be no guarantee of a rebound to D=162.12, since the uptrend begun two weeks ago has struggled to get clear of the midpoint Hidden Pivot resistance, 147.37. I suggest watching from the sidelines for a couple of days, since getting aboard in a place other than the green line would be labor intensive.
Five weeks of tedium have etched a picture of distribution on the daily chart (inset), presumably culminating with a dive at any time to the 108.74 target of the pattern shown. This suggests that my forecast for a major top in Ten Year rates at 3.24% may eventually be borne out. The so-far high at 3.17 reached on May 9 was close enough for us to have considered the target fulfilled. However, we should keep an open mind toward the possibility of a head fake corresponding to an important peak in rates. If so, it would portend deepening recession for the U.S. and the world. ______ UPDATE (Jun 13, 10:53 a.m.): I've adjusted the target upward to 3.56 using a less gnarly pattern in $TNX.X, a vehicle that tracks interest rates tied to the Ten-Year Note.
I have little to say about Bertie, other than that it continues to be as interesting as a bowl of grits. Bitcoin's deep-pocketed sponsors seem capable of maintaining a cruising altitude just below $30k indefinitely, and of popping it a few thou whenever conditions are right and they feel like mau-mauing skeptics. Although the May 12 spike down to $25k generated a quite powerful impulse leg, bears have been unable to do anything with it. For that reason, I am taking the obvious head-and-shoulders pattern as evidence that bitcoin is consolidating for a leap in a month or two to $65k or so, although not to new all-time highs. ______ UPDATE (June 11): Zzzzzzzzz. Head-and-shoulders pattern aside, I am unable to imagine a reason for such speculative fervor as that target would imply. It would reflective crazy-bullish sentiment that seems unlikely to return to securities markets for a long, long time. ______ UPDATE (June 12, 11:43 p.m.): I'd hate to be mistaken for a bitcoin bull just because I was fleetingly intrigued by an incipient head-and-shoulders formation that has turned to ca-ca with tonight's so-far $4,000 dive. I'd put out a 14,751 target in May which remains valid. To restore my bear bonafides, here's a pattern with a 9507 target I'll start liking if sellers shred the midpoint Hidden Pivot support at 20,930. For now, that can serve as our minimum downside objective.
