Rick’s Picks

Two weeks after touching a long-term Hidden Pivot target at 234.82, IWM remains well below it, even after a quintessentially phony short-squeeze on Friday minutes before the closing bell. The rally would begin to look interesting if it can surpass last Wednesday's peak at 221.33, but until that happens the burden of proof will lie with bulls. Each pullback on the intraday charts would need to produce a rally exceeding a prior peak on the hourly chart for new record highs to start looking credible. Above the one at 221.33, they lie respectively at 226.75, 228.60 and 232.93.

I don't usually call attention to head-and-shoulders patterns because they are everywhere one desires to see them. In this case, however, the bullish reverse H&S shown in the chart (see inset) looks too pretty to ignore.  It implies that a rally likely got under way Friday that could push this sack of hot air to a test of all-time highs near 338 recorded in mid-February. If this should occur, the mood on Wall Street would likely be so giddy that we'd need to guard against being suckered into a possible bull trap. It would surely be a doozy, considering how bullish sentiment is.

Gold's lengthy unspooling has become all but insufferable, an arrested bull market doing its best to vex and frustrate even the most patient bulls. My hunch is that the long correction will end with a brutal washout, but even then, the final low would be subject to a Hidden Pivot 'D' support. The one at 1612.30 shown in the chart would qualify, but moreso if the plunge to it is appropriately steep.  Regardless, I'd be tempted to try tightly stopped bottom-fishing at the 1683.30 midpoint pivot, or even at p2=1647.60. There are no larger corrective patterns with more authority than the small one shown because the entire slide since last August exceeded no 'external' lows of significance. The small pattern did, however, and that's why I am using it to project a possible bottom. I am not married to the washout scenario, however, and will remain alert to any subtle upturn from p or p2 as a possible watershed low. ______UPDATE (Mar 30, 10:55 a.m. ET): April Gold's plunge this morning through a midpoint Hidden Pivot support at 1683.30 has shortened the odds of a further fall to D=1612.30, the target given above. Here's a fresh chart. ______ UPDATE (Mar 31, 9:22 p.m.): Let's set the bar at 1735.60, a tick above an 'external' peak made Monday on the way down, before we wax enthusiastic about today's short-squeeze rally. _______UPDATE (Apr 1, 10:17 a.m.): June Gold triggered a 'mechanical' short today at 1720.7, stop 1756.10. It is predicated on a fall to D=1614.60, equivalent to 1735.60, basis June. I would rate the trade '7.0' -- not bad, although the implied $14,000 risk on four contracts calls for a 'camouflage' entry set-up that would reduce that to under $1000 theoretical.  Specifically, an rABC set-up on the hourly chart can be attempted

The 23.24 correction target we've been using will have to do, even though the A-B impulse leg that produced it did not exceed any 'external' lows. That makes it 'sausage', and therefore less useful for projecting tradeable turning points. A low at the target would fall well within the exhaustingly tedious corrective band that has formed since last August's 30.59 high. To be sure,, the big picture is bullish, albeit stagnant in part because so much speculative energy has been diverted into bitcoin.  If and when the May contract dips to 23.24, we can bottom-fish rABC-style using A= 25.42 (3/12). _______ UPDATE (Mar 30, 9:05 a.m. ET): The futures have breached p2, putting a D target at 23.28 in play. The pattern used to produce this target has been adjusted somewhat from the earlier one associated with 23.24.

The chart, with a 234.82 target that was missed by a fraction of a millimeter, is starting to look familiar, but it shows the last clear bull-market target that can be extrapolated from monthly bars. Moreover, the ABC coordinates of the bull-market pattern are anchored in bedrock, tied respectively to the bear market low in 2009, then the high and low of the pandemic crash. I advised getting short via call options in TZA, an inverse 3x bear ETF, and the 15% rally that has occurred since, from 29.54 to 34.09, could have been used to take a healthy partial profit.  Set a 30.08 stop-loss for what remains, but you can raise it to break-even levels if you have yet to exit any shares or calls. _______ UPDATE (Mar 24, 11:20 p.m. EDT): The possibility that a major top is in remains a decent bet, given that the plunge from within a hair of the 234.82 target I'd drum-rolled earlier is now at nearly 10%.  If a reversal is coming, it is likely to come from around 206, a number based on a gut feeling I have rather than on an ABCD pattern.

Sellers turned timid as the week ended, but they still had bulls mildly on the run. With just a little more weakness ES would trip a bland 'mechanical' buy at p=3890.63, stop 3830.50, but I'd suggest passing it up for a less risky play at x=3800.56. If the futures appear reluctant to come all the way down to meet our niggardly bid, we can always attempt another way in. My gut feeling is that the current pullback will stop out a long initiated at the red line, but that the futures will have the potential in any event to reach the 4070.75 target. It is equivalent to one at 4083.75 that we'd been using for the March contract. _______ UPDATE (Mar 23, 6:04 p.m. ET): Sellers have been too timid to do more than limp through the day, and sell-offs lasting more than two days have been extremely rare. If  recent weakness is about to intensify, it would be telegraphed by an easy penetration of the 3846.50 Hidden Pivot support shown in this chart. That's my minimum downside objective for the moment. ________ UPDATE (Mar 24, 11:29 p.m.): The futures will have a chance to turn from 3860.75, a Hidden Pivot support that can be bottom-fished with a stop-loss as tight as 3859.75, or with a tight rABC pattern. Notice in the chart that today's rally to the green line tripped a textbook 'mechanical' short tied to D=3860.75. _____ UPDATE (Mar 25, 6:01 p.m.): The first trade suggested above would have produced a quick $50 loss, but trying again at the lower number, 3846.50, would have gotten you aboard 3.25 points from the low of a 63-point rally worth up to $3100 per contract. Bears were on the ropes at the close, but this short squeeze would need to touch 3951

DIA shredded its way past a major Hidden Pivot resistance at 327.40 that came from the weekly chart, implying that still-higher prices are coming. The overshoot was just five points, or about 1.6%, but that's enough to presume that the next downswing, unless it exceeds 298.59 (!), will be merely corrective. Thereafter, we should expect any subsequent upthrust to achieve a minimum 343.38, equivalent to a 1700-point rally in the Dow Industrials.  For trading purposes, use a pullback to p2=319.81, the secondary pivot, to get 'mechanically' long, stop 311.95.  If you employ call options, I'd recommended targeting 343.38 with a four-week (or so) call butterfly. _______ UPDATE (Mar 23, 6:09 p.m. ET): Lower the bid to 296.24, stop 280.52, for now. Just a gut feeling that we needn't rush to buy. _______ UPDATE (Mar 25, 6:45): I doubt that today's surge is going anywhere, but if it exceeds the red line at 327.98 shown in this chart, I'd have to reconsider, since that would put a 335.04 target in play.

After topping a micron above a longstanding bull-market target at 337.10, the Cubes have come down hard. They would have tripped a 'mechanical' buy if the selloff had hit x=294.75, but it was not to be. Instead, a weak rally from just above this benchmark pushed the trade out of range. Perhaps this was for the better, since the subsequent rally has so far failed to achieve the p=329.40 midpoint pivot where we might have taken a partial profit.  The 'mechanical' buy would still trigger if QQQ relapses to the green line, but I am not enthusiastic enough to recommend a straight limit-bid there. We can use the theoretical 'buy' signal nonetheless to set up a less risky entry, but there's no hurry to settle on a plan until such time as x=294.75 is approached (or perhaps exceeded).

With mincing steps, April Gold has climbed modestly over the last two weeks and looked poised for something more decisive. But up or down?  My bias is bearish, implying a fall to the 1630.50 target shown (see inset). The reason for my dour outlook is that the futures have failed to surpass visually distinctive peaks on the last two rallies.  That's nothing that an uncorrected pop on Monday or Tuesday above 1768.50 wouldn't remedy, but even then a further push exceeding the 1772.90 target shown here would be needed to cushion bulls against the inevitable next bear raid. ______ UPDATE (Mar 24, 11:38 p.m.): A feeble rally has failed to exceed even a single prior peak on the hourly chart over the last two days.  Gold looks so punk, in fact, that it is probably about to feint higher to get our attention. That's okay, but let's stipulate that the rally exceed the 1754.20 peak recorded on March 18 before we take it half-seriously. _____ UPDATE (Mar 25, 6:51 p.m.): A gratuitous, $20 spike died quickly, sending gold down to a loss on the day. _______ UPDATE (Mar 26, 10:23 p.m.): Zzzzzzzzzzzzzzzzzzz.