The pattern shown is as gnarly-perfect as they come, and so we should expect the 318.30 target drum-rolled here earlier to work with astounding precision. That implies that the so-far high at 315.76 will need to be improved on before we can consider the rally spent. Even if I am off by a few pennies, I strongly doubt DIA will exceed 318.30 by much before taking the plunge that is so grotesquely overdue. My advice remains unchanged in any event: Buy puts that expire in around two weeks for less than 0.50 when DIA gets within 0.15 of the target. I will be keeping close track and may need to adjust this guidance if index futures spike Sunday evening, so stay tuned. ______ UPDATE (Feb 18, 9:13 a.m.): Tuesday's pre-opening high at 317.60 missed the target by 70 cents, or less than a point. Although this is not quite 'astounding precision', it's close enough for us to consider the target fulfilled. Now let's see how far the reversal goes.
Tracking three sets of targets for two vehicles -- QQQ and the E-Mini Nasdaq -- in one tout became unwieldly and confusing, so I am limiting this analysis for simplicity's sake. The 337.10 rally target shown corresponds very closely to targets in ES and DIA that were missed last week by millimeters. A hat-trick of major tops is possible, and I've suggested getting short speculatively via puts in DIA and/or IWM. You're on your own if you elect to trade the E-Mini Nasdaq, but as far as I can tell there are only a handful of subscribers with the experience and brass balls needed to get in its way. My target for it, flagged here earlier, is 13836. The actual high last week was 13821. _______ UPDATE (Feb 16, 8:00 p.m.): Both QQQ and the E-Mini Nasdaq (NQ) reversed after slightly exceeding their respectively rally targets. If you got short at either, stop yourself out on a close above the highs. ______ UPDATE (Feb 17, 8:33 p.m.): After exceeding the 13836 rally target by 64 points, the futures have plunged, trading more than 300 points below it. If you got short and hung on, as much as half of the position should have been covered by now.
Gold remains easily tradeable not only on the intraday charts, but on the 'daily' as well. A routine 'mechanical' short sketched out here last week produced a quick profit of $3100 per contract, even if the set-up was uninspiring. Traders should have no illusions, however, that they will be catching the start of a major move. since the long, tedious slog lower since last August offers no hint of a significant turn. The correction at the December low amounted to just 16% off the 2107 high recorded in August, not even qualifying as a bear market. Nor has the correction produced a bearish impulse leg on the daily chart; that would take a breach of the 1704 low recorded last June. Wake me if this happens, or if a powerful stab higher takes out November's 1978 high -- an event that would be bullishly impulsive and suggest gold might be on its way to as high as 2284. _______ UPDATE (Feb 16, 10:03 a.m. EST): The futures are getting pounded today for no good reason, presumably bound for the 1765.50 target shown. They typically do not reach D targets in either direction, but in this case the precipitous move through p suggests selling will go the distance. Here's the chart. _____ UPDATE (Feb 17, 8:37 p.m.): A so far feeble bounce has occurred from within 2.40 points of the 1765.50 target, but it would take a print at 1795.20 to lift bulls from immediate jeopardy. _______ UPDATE (Feb 18, 9:43 p.m.): Gold got barely any bounce from the 1765.50 target. This means it is about to fall to 1749.80, where you should look for a tradeable bounce. Here's the chart.
March Silver remains on track to achieve the 34.67 target shown. The chart looks more bullish than gold's, but we needn't overly concern ourselves with this, since eventually they will get back in line. My gut feeling is that silver will turn less bullish to accomplish this rather than gold turning more bullish. That's because the spike to $30 a few weeks ago brought on by youthful blusterers at Reddit quickly aborted when they ran out of juice and into reality. Even so, if the detumescence should continue down to the green line (25.11), the 'mechanical' buy I suggested there earlier would still be in force. The stop-loss would be at 21.92, just beneath the pattern's point 'C' low, but we'd be shooting for just a one-level ride to p=28.30, rather than a rocket ride all the way to D=34.67. ______ UPDATE (Feb 18, 9:48 p.m. EST): Silver has turned 'less bullish' (see above), but it still looks better than gold. I've projected at least somewhat lower prices for the latter, but let's see if the futures can hold above 25.935 top keep the short-term-bullish pattern projecting to 31.39 alive.
I've shifted the point 'A' low a dozen bars to the left, an adjustment in pattern logic that has raised the rally target by around than 300 points, to 54,331. We've been using a target at 48,834 to stay confidently on the right side of an insane uptrend, but last week's 48,905 effectively fulfilled it, marking a top a scant five-hundredths of a percentage point from our original price objective. Since then the futures have pulled back only slightly, hinting that the stampede is intent most immediately on the new target at 54,331. Given the clarity of the pattern to which it is tied, I doubt this Hidden Pivot resistance will be a pushover. However, judging from the way bulls impaled the midpoint pivot at 41,570, odds of the target not being reached are close to nil. Plan accordingly if you trade this vehicle.
Although I've identified magnetic targets in the E-Mini Nasdaq and QQQ that lie 12% above, the more modest target at 234.82 shown here, an easy 6% climb, is equally compelling and screams to be shorted. If it turns out to be a watershed top, that implies NQ and QQQ will both fail at levels midway between p2 and D that I've explicitly mentioned in the current QQQ tout. This target virtually maxes out logical topping possibilities on the long-term chart, since there are no lower point 'A' lows to be found, nor any B-C corrections that are more dramatic. Notice the decisive move through p=165.26 the first time it was hit. This makes the corresponding 234.82 target all but certain to be achieved. It also promises to be a great opportunity to lay in a supply of ultra-low-risk put butterfly spreads for maximum downside leverage when IWM gets there. Until then, all trades should begin with a strongly bullish bias. ______ UPDATE (Feb 8, 3:38 p.m. EST): For now, let's plan on legging into some Mar 19 180/185/ 190 put butterflies. We can start with a 0.15 bid for 24 Mar 19 190/185 put spreads, adjusting that price (and possibly the date) as IWM closely approaches the 234.82 target. The spread is currently on a bid/asked of 0.22/0.30. (Note: These prices have been changed to reflect a shift to the March 19 expiration). ______ UPDATE (Feb 10, 7:57 p.m.): I never chase a trade, but I am nonetheless concerned that IWM and all broad averages will top without having quite reached my rally targets. The puts have remained out of reach in any event, so we'll have to play it by ear. In practice, this will mean buying at least a few puts ahead of the weekend on any rally.
I hadn't noticed the 318.30 target shown in the inset, but it jumped out at me when I accidentally imposed a 240-minute chart on DIA. It looks like a great place to try shorting, notwithstanding the higher targets where we are looking for possible tops in IWM, ES and QQQ. Specifically, I'll suggest buying puts that expire in around two weeks for less than 0.50 when DIA gets within 0.15 of the target. On Friday, with DIA trading around 311, the nearest strike that would meet our criteria was 285. This implies we'll likely be looking at 290s or 295 when the time comes. You can also interpolate by buying SDOW shares, which closed Friday at 11.90. A midpoint Hidden Pivot support that comes in at exactly 9.45 corresponds closely to the 318.30 DIA target. _______ UPDATE (Feb 10, 8:04 p.m.): Stay tuned to the chat room, since I'd hate for the Dow to turn down with a vengeance after having gotten within 1% of my target. My recommendation is to buy at least a few puts ahead of the weekend, preferably with this gas-bag in a rally that I am confident will be distributive.
My imagination has failed whenever I've tried to predict the potential Mother of All Tops. We've nailed some nice peaks along the way, usually making a few bucks on the short side before the inevitable reversals occurred. However, the 377.14 target shown in today's chart (see inset) looks like the most promising so far for delivering a big winner. The three coordinates I've used to draw the pattern are elemental and even historical, comprising the 2009 start of the longest bull market in U.S. history, and then the start and finish of the mind-blowing pandemic collapse last February/March. The 377.14 target is simple and compelling, but also an ambitious stretch for anyone who may have thought the radical change in political leadership would get no honeymoon on Wall Street. This chart allows for a further 12% rally even though 2021 is fraught with potential economic pitfalls and vaccine disappointments that should have made investors far more cautious. Few doubt at this point that they are out of their minds, or that a bear market worthy of the name is long overdue. It will become even more overdue if and when QQQ hits 377.14. The equivalent rally target for the E-Mini Nasdaq is 15351, shown in this chart. To be extra cautious, let me mention two numbers for the QQQ and the Mini-Nasdaq that reflect, respectively, the midway points between p2 and D: 350.51 and 14262. I am flagging these price points because it would not be unprecedented for a bull market to sputter out in, so-to-speak, the middle of nowhere. Finally, there's this promising target at 13836 in the E-Mini Nasdaq. For short term plays, the pattern looks hard to beat -- not only for shorting D with a very tight stop-loss, but for 'mechanically' buying a pullback to p=13,281.
The well-advertised target at 3938.25 has been in play since mid-November and should be considered highly reliable if you want to try shorting with a very tight stop-loss. It was not possible to 'guarantee' the target would be reached because it took quite a struggle for bulls to hoist the futures decisively above the midpoint Hidden Pivot at 3717.25. Now that ES is trading well above p2, however, the target should be considered a lock-up. This favorite pattern is characterized by a short, relatively quick ABC phase followed by a seemingly endless dirge along the C-D leg to D. It is particularly useful to us because the out-of-symmetry AB and CD legs tend to throw chartists who use 1-2-3 Gartley-type formations off the scent of a target that often works precisely. For our purposes, it can serve as a place to try shorting, even though I have higher targets outstanding in IWM, an ETF vehicle that tracks the Russell 20o0 small-caps, QQQ and NQ. _______ UPDATE (Feb 10, 8:27 p.m. EST): The recent high at 3928 missed my longstanding target by 10 points, or 0.2%. If the weakness that has ensued gets legs, look for it to continue down to at least 3879.00. The pattern can be used to short ES 'mechanically'. As always, an easy move through D would portend still lower prices. Here's the chart.
The 48,834 rally target we've been using is still tracking nicely, although it would take a decisive pop above p=38,822 to make the target an odds-on bet to be achieved. So far, buyers have merely head-butted the red line without penetrating it. Last week's 18736 high came close enough, though, that any pullback to the green line (x=33,816) should be regarded as an opportunity to get long 'mechanically'. The appropriate stop-loss would be at 28,809, a tick below the pattern's point 'C' low. I would like to track a second, cheaper crypto vehicle here, so please let me know in the chat room what your favorites are. GBTC, the vehicle I've been using, has the drawback of trading only during daytime hours. _______ UPDATE (Feb 9, 1:23 p.m. EST): In GBTC, The gap through p=43.03 to start the week has all but guaranteed that D=57.70 will be reached. Given the high quality of the pattern, I would also expect a tradeable pullback precisely from that Hidden Pivot resistance. The equivalent target in $BRTI is 53,169. ______ UPDATE (Feb 10, 9:42 a.m.): No change. BRTI's most recent leap came within 1% of the 48834 target, so it should be considered fulfilled. _______ UPDATE (Feb 11, 7:12 p.m.): Today's bullish spasm hit 48,672, just 0.2% from my target, but it will take a two-day close above it to put 53,169 solidly in play.
