The 'mechanical' short recommended from the green line (x= 5.9093) last week narrowly survived getting stopped out when a midweek upthrust failed to surpass the conventional pattern's point 'C' high. On Friday, the futures fell far enough to touch the midpoint Hidden Pivot support (p=5.7035), where we customarily take profits on half a position. If you are still in the trade, plan on taking an additional 25% off at p2=5.4978, the seondary Hidden Pivot, saving the remaining 25% for a possible ride down to D=5.2920. Since there has been little discussion of the trade in the chat room, I will likely replace 'Doc' Copper soon with another symbol as part of a continuing.
The chart leaves no doubt that this short-squeeze rally will reach the 7023.00 target. Friday's move impaled the midpoint resistance (p=6887.25), then went on to poke a hole through p2=6955.13 and close within a hair of it. Is this sufficient power to produce the bullish breakout investors have awaited since the Halloween top just above 7000? Probably. Although d=7023.00 will still be worth shorting, you should do so with a delicate 'reverse pattern' trigger that risks no more than 3.00 or so points per contract. In the meantime, bull trades will likely enjoy safe passage at least to 'd'.
I've returned AAPL to the list, since MSFT's dirge is no longer representative of the animal spirits that have been moving the markets higher. The chart shown leaves room for a possible double top, but I've selected a lower point 'A' in order to project a likely move to new record highs. The move through p=274.76 is not quite powerful enough to guarantee this, but it will offer 80% odds if the stock can close for two more consecutive days above p=274.76. At the point, the secondary Hidden Pivot (p2=290.42) would become my minimum upside objective. If a pullback to the green line (x=259.09) were to occur first, it would offer a stellar opportunity for a 'mechanical' buy, stop 242.00.
Gold is showing rather more pluck than Silver at the moment, having failed correctively to even reach the midpoint Hidden Pivot at 4586.20, let alone decisively exceed it as Silver has. The latter's more punitive correction is undoubtedly related to its singular nuttiness in recent years. The seeming divergence will almost surely be resolved in the week ahead, and I lean toward a bullish outcome. The point 'C' high at 5113.90 does not look capable of putting up a fight, and gold showed every sign on Friday of its eagerness to test C's mettle. The only hint of trouble is that the B-C leg of this pattern did not generate a fresh impulse leg with the 5113.90 top. In any event, we'll need to wait and see how things play out over the next couple of days before assuming new record highs are coming.
As I've noted in the latest Gold tout (see above), Silver's chart looks significantly weaker in comparison. The correction from January's record 121.23 has breached the midpoint support (p=68.390) by a significant amount, setting up what can only be viewed as a 'textbook' mechanical' short on any rally that touches the green line (x=80.203). That implies the futures could fall as far as D=44.765 after peaking at x or somewhat higher. I prefer to analyze each chart on its own, rather than complicate the picture by tying it to another, even if they are close cousins. We'll have to see what the new week brings, but I've mentioned in the Gold tout that bulls would seem to hold the edge here. ________ UPDATE (Feb 9, 11:12 a.m.): See Monday night's chat room discussion for further guidance.
I'll spare you the boring details, but the pattern shown, wih a 202.52 target that lies 20% below, has everything I look for. It tripped a conventional sell signal when it touched the green line last Wednesday, and the choppy downtrend since should be presumed bound for a minimum 118.05 over the near term. If that midpoint Hidden Pivot support is easily exceeded to the downside, it would portend more slippage to as low as D=102.52. We'll let price action speak for itself, but take it as a bullish sign if buyers push above C=133.57 before p=118.05 is touched.
The futures ended the week just a hair shy of triggering a 'mechanical' short at the green line (x=5.9093). Because it would require an initial stop-loss just above C=6.1150, I am recommending the trade only to those of you who are familiar with small-interval (i.e., 'camouflage') triggers. (They are covered in the Hidden Pivot Course that is available free to most subscribers.) The trade is predicated on a price objective at 5.2920, the 'D' target of this conventional pattern. That implies it should be good for at least a one-level ride from x to p=5.7035, but anything lower than that would indicate more slippage to at least p2=5.4978. ________ UPDATE (Feb 9, 11:14 a.m.): See Monday night’s chat room discussion for further guidance.
A further fall to the 404.67 target would represent at 27% decline since the stock sputtered out in October at 553.72, just an inch shy of new record highs. The pattern doesn't quite qualify as an ominous, island-reversal top, but it doesn't take a chartist to feel the weight of the dome the stock has traced out over the last nine months. The pattern is simple and obvious, but sufficiently compelling for us to infer that MSFT is far more likely to hit D before C=493.50, if it ever does. This is the fourth most valuable company in the world, behind Nvidia, Google, and Apple, implying that the stock's decline has deflated the global 'wealth effect' by a large amount. See this week's commentary (above) for a further discussion of this. _______ UPDATE (Feb 8): The stock has looked so awful that I am substituting AAPL on the 'touts' list. The chart shows a logical path down to D=376.88. The stock can be 'mechanically' shorted at the red line (p=408.24), stop 418.70. ________ UPDATE (Feb 14): We usually do 'mechanical' shorts at the green line, but I made a rare exception this time, recommending that you get short at the red line (p=480.24) with a 418.70 stop-loss. The trade would have produced a loss of $1024 per round lot. Had we shorted at the green line (x=423.92) as is customary, the trade would have worked out nicely, since the stock made a top at 423.68 just ahead of a so-far plunge of $22.67. The 376.99 downside target remains valid in any case and should be used as a minimum objective for now.
The futures served up such a steaming bucket of slop on Friday that I've projected more of the same as the new week begins. The slop was enough, however, for anyone who followed my post at 8:53 to begin the day with a profit sufficient to cushion whatever else the session's feeble price action brought. Although bulls and bears fought to a draw, I've shaded my bias toward the latter with the 6839.25 target shown. Don't expect the trip there to be as smooth and straightforward as the dotted line I've drawn on the chart.
Can Gold correct the monster, 1660-point rally since October in mere days? It seems doubtful, but we'll be monitoring the 4588.30 target in the chart closely nevertheless, in case it creates a bottom-fishing opportunity. That Fibonacci-based number would represent a 62.5% retracement that overshot the 50% mark on Friday, a day after topping at 5626.80. There is a small chance that the correction has seen its lows, since the 4713.90 closing price was just $2.20 from a downside target derived from a composite monthly chart that goes back to a notable top at 1920.70 recorded in September 2011. _______ UPDATE (Feb 2, 8:08 a.m.): This reverse pattern yields a clearer picture than the earlier one, which focused on the retracement without having the benefit of the robust rally that has occurred overnight. The strong push through p=4725.20 has all but guaranteed the move will reach d=5027.10. It also makes a pullbback to the green line (x=4574.20) a good bet to produce a 'mechanical' profit of at least one level (i.e., $151).
