A pattern identical to gold's projects a rally to as high as 22.88 over the near term, although the latter has performed more bullishly recently. There have been no 'mechanical' buying opportunities since the futures bottomed ten days ago, but one would be signaled on a pullback on Monday to x=21.03. Bulls should be careful near 'D', since the target is sufficiently compelling to suggest a short-able pullback will occur there.
The dollar bull is showing signs of fatigue, so let's be ready for the first major correction in more than a year. It would not likely diminish prospects for an eventual move to the 112.14 rally target shown in the chart. However, DXY may first have to come down to the green line (94.22) before it has fully corrected the bull market begun in 2014. A plunge of that magnitude would undoubtedly be read by economists and pundits as a phase in the dollar's demise, but it would actually make the greenback a screaming 'buy' from a Hidden Pivot standpoint.
Although we might have expected Bertie to get some respite after completing a head-and-shoulders pattern over the last ten months, it is instead breaking down again. Mid-May's breach of an important Hidden Pivot midpoint support at 31,434 hinted that bitcoin's long dirge since peaking near 70,000 last November is not over. However, the May 12 stab beneath the H&S pattern's 'floor' implies things may be even worse than they had seemed. Accordingly, we'll stick with the 14,751 target for now while allowing for the possibility of a tradeable bounce from p2=23,092. For now, you can use that secondary pivot as a minimum downside target. _______ UPDATE (May 31, 11:03 p.m.): Bertie's bullish wilding spree may have seemed impressive, but it noticeably failed to exceed the middling 'external' peak shown in this chart. This is a subtle sign that the rally is unlikely to get legs, so be prepared.
The pennant formation shown is building a base for June Crude to pop to as high as 146.42. This seems incredible and goes against the grain of my recent forecasts, which have implied that crude topped at $121 in March. Even so, I'm forced to consider the possibility of a powerful upthrust, based on the purely technical evidence in the chart. Such a move would not likely be caused by a surge in the global economy, which appears headed toward deep recession. It would also be bucking deflationary headwinds that will continue to mount as higher interest rates crush borrowers. The only way crude could get to $146 is with a massive disruption of the distribution chain such as war might cause. Is the chart predicting a geopolitical conflagration? So it would seem.
AAPL, the crown jewel of the institutional investment world, has lost more than 20% of its value since January. Last week it signaled still lower lows down the road when it deeply pierced a case-hardened floor of Hidden Pivot support at 146.77. But how far down the road? My hunch is that last week's bounce on Thursday from a bombed-out bottom at 138.80 will prove to be the start of the most powerful short-squeeze since January. As such, and according to design, it will devastate bears who have grown complacent betting against the biggest portfolio managers in the world. The fact that the squeeze began off a bottom on Thursday, giving the stock a running start for a psychotic leap into freaky Friday (the 13th, no less), is evidence that DaBoyz are taking no chances. They do not want this rally to flame out quickly like all the others that nipped at shorts' privates in April. The stock will still need to take quite a leap, to 156.75, merely to generate an impulsive leg on the hourly chart. Expect DaBoyz to succeed at this project -- the earlier in the week the better for them. _______ UPDATE (May 18, 6:34 p.m.): The small dip below the red line has shortened the odds of a further fall to D=131.81 of this pattern. Also, a rally to x=145.27 would trigger a 'mechanical' short, stop 149.76. Check the chat room for for timely guidance, since the appeal of this trade will depend on how and what time of day 'x' is hit.
Friday's bear rally was not particularly impressive, and we could probably write it off had it occurred on any other day of the week. But because it left shorts bleeding on the ropes ahead of the weekend, they are likely to provide buoyancy when index futures resume trading late Sunday afternoon. The three labeled peaks will pose an immediate challenge, but we should expect them to give way if there is no particularly unsettling news over the weekend. If you or I were the criminal masterminds who rig the markets, this is how we would set things up to maximize the power of short-covering and other buying behavior related to the calendar. Short-covering rallies are engineered to achieve heights that mere bullish buying never could, and that's why we we should expect the rally to continue. For now, use the 4102.00 'D' target of this reverse pattern as a minimum upside objective. The Hidden Pivot levels can also be used for 'mechanical' entries or to get short at D. If it's easily exceeded, bears may be facing a tough week. ______ UPDATE (May 16, 5:35 p.m.): Buyers went nowhere, but that was impressive, given the quickening drumbeat of news concerning the implosion of China's economy. Use this pattern, a slightly evolved version of the one above, with a 4102.00 rally target. _______ UPDATE (May 18, 1:15 p.m.): Minor downside targets have supported only feeble bounces so far (see my 10:06 rec in the Trading Room), but the p midpoint of this pattern will likely work better. Today's decisive move below 'x' implies that 'p' is all but certain to be reached. I am not publishing the actual price associated with p to avoid making it too visible._______ UPDATE (May 18, 6:12 p.m.): Here's my third correction of the bearish pattern, with a
TLT has taken a promising but still-fragile bounce from the 112.31 secondary Hidden Pivot of the pattern shown. When reversals occur at p2, they sometimes continue in the same direction, eventually stopping out the pattern with a move through 'c' -- in this case 123.03. This dynamic is called 'Matt's Curse', named for the subscriber who first observed it, and in this case the implications are bullish. The rally would become less tentative with a pop above the 'external' peak at 119.31 recorded on May 3. ______ UPDATE (May 24, 10:05 p.m.): The short-squeeze gap on the opening kept the rally alive by generating a fresh impulse leg on the daily chart, albeit by a hair. The next thrust must exceed 120.35 to keep the elevated mood stoked.
There's a Hidden Pivot support at 1757.40 to break gold's steepening fall, but then what? A tradeable low seems very likely to occur there, or somewhat lower near one of several 'external' lows that stairstep down to 1704.30. The downtrend could even end with Friday's 1797.20 low, the pattern's 'secondary' pivot, but I wouldn't count on it. The futures are certain to be volatile and therefore tradeable while they carve out a bottom, but opportunities will necessarily be labor-intensive and short-lived.
Silver's interminable dirge might not reverse until it falls to 19.20, the 'D' target of the pattern shown. Although it's possible the turn could come from as high as p2=20.23, that seems unlikely because of the relentless downward ratcheting that has characterized this mini-bear move. Initial price action at p=21.27 suggests that if and when the July contract comes down to 19.20, it will be possible to bottom-fish there with a very tight stop-loss. 'Mechanical' shorting opportunities may materialize in the meantime, but so far none of the rallies has been strong enough to set up the trade.
Use the 14,751 target as a maximum downside objective for the next few weeks. If Bertie gets there, that would represent a nearly 80% plunge from November's all-time high at 69,000. I regard the target as likely to be achieved, given the way sellers sliced through p=31,434 last week. The secondary pivot at 23,092 can be bottom-fished nonetheless, provided you've made money on the way down and know how to limit risk.
