Rick’s Picks

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).

The chart is similar to the one I've drawn in Gold, with a 0.625 retracement serving as a target for Silver's breathtaking correction. It came off a record high on Thursday that missed a 122.215 Hidden Pivot target I'd drum-rolled by a millimeter.  Friday's bounce left the futures sitting nearly $3 above the 50% line, but if the correction is going to match Gold's, a retracement to 64.18 is needed.  Be prepared to bottom-fish there with a 'camo' trigger, since 64.18 is not going to be on the radar of most traders, derived as it is from a low recorded last April that is idiosyncratic, although not obscure. ______ UPDATE (Feb 2, 7:55 a.m.):  I've switched the view, since trying to synch the charts of gold and silver grew confusing. This picture affords 'safe passage' to at least d=91.285, a Hidden Pivot that lies  $6.80 above. If it shows little resistance, I will adjust by lowering point 'a' to produce a higher target.  In the meantime, a pullback to the green line (x=76.221) can be bought 'mechanically' with a 71.190 stop-loss.  That implies more than $5000 of entry risk per contract, so the trade is recommended only to subscribers able to craft a 'camouflage' trigger. _______ UPDATE (Feb 4, 10:59 p.m.): The suggested trade racked up a monster profit of $75,320 per contract for anyone who boarded at 76.221 and exited two days later at my target, 91.285.  What happened next should not have surprised subscribers: the futures wafted slightly (47 cents) higher, then fell moments later into a hellish dive that took them all the way back down to, so far, 73.415, a tad below the trade-entry price. 

GDXJ's long-term chart differs enough from gold's to allow a more creative approach to targeting this correction. I've masked the A & B coordinates for proprietary reasons, but they indicate a possible further fall to 112.09 before this vehicle can turn around.  That Hidden Pivot can serve as a minimum downside projection because of the decisive way the downtrend penetrated p=132.17 on Friday.  Any bottom fishing there should use a 'camo' trigger derived from a chart of 60-minute degree or less.

Copper's correction exceeded the midpoint Hidden Pivot support of a pattern I've partially concealed.  The overshoot is not sufficient to infer that more slippage to d=5.0095 is a done deal. However, a bounce to the green line (x=6.1896) would set up a moderately attractive 'mechanical' short, stop 6.5830, that presumably would be good for a one-level ride back down to p.  If a rally from the green line comes from further below p, that would sweeten the odds for shorts initiated at x.

TLT has done nothing to alleviate a dismal picture on the long-term charts. I am switching the view this week to a chart of long-term Treasury rates which points toward 5.078%.  It would be the first time they've traded above the psychologically important 5% level since July, when a peak at 5.077% was recorded. My gut feeling is that anything that close to last May's watershed  5.153% would be tested and exceeded, putting Trump's plans to stimulate the economy in jeopardy. His lips have been pushing hard against the uptrend in yields, but market forces seem to be winning.