Friday's coy feint above p2=299.25 cracks the door slightly for a shot at 312.99, our longstanding target while the Cubes were cooling their jets for the last three months. They've been waiting for the perfect vaccine and, more recently, a clear indication of who will next occupy the White House. The geniuses who are paid to throw Other People's Money mostly at a half-dozen stocks would have us believe they can live with Biden, but we shouldn't believe this for a minute. The story has given them cover to distribute stocks, however, until investors come to their senses as they inevitably do, sometimes with such epiphanies spaced decades apart. We can assume for positioning purposes that the next 'oh-god-what-have-we-done?' moment is most likely to occur with QQQ cavorting near 312.99. It will provide a speculative opportunity to get short in any event, so stay tuned. _____ UPDATE (Dec 9, 8:30 p.m.): The plunge from within inches of the 312.29 target is mildly bearish. If the selloff continues without pause, exceeding November 30's 294.78 low, that would turn the short-term picture outright bearish. _______ UPDATE (Dec 10, 6:15 p.m.): Sellers turned docile. Let's see how they set up for the weekend.
It can sometimes seem like there's no bottom when the Bad Guys are whalin' on gold, but bulls can at least hope for an upturn from the 1756.30 Hidden Pivot target shown in the chart. Failing that, expect to see the December contract work its way down to 1700.00, since the dirtbags who manipulate bullion prices for a living are nothing if not slaves to the obvious. Ordinarily I would suggest bottom-fishing with a tight stop, but in this case the impulse leg is ersatz and therefore unreliable, since it exceeded no external lows. The pattern could prove good enough for government work nonetheless, so don't hesitate to use and 'rABC' set-up to get long if you know how. _______ UPDATE (Nov 30, 9:27 p.m.): The so-far feeble bounce from a 1762.30 low has not quite negated my 1756.30 downside target, but the burden of proof now on bulls would lighten if the futures can clear a minor resistance at 1816.30 created last Wednesday on the way down. ________ UPDATE (Dec 1, 9:08 p.m.): The bounce is no longer feeble, but it is still a smidgen shy of 1817.10 [corrected] print needed to generate a trustworthy impulse leg on the hourly chart. A further thrust, especially if it is unpaused, surpassing Nov 24's 1829.80 'external' would strongly suggest that gold's bullish reversal has gotten off the launching pad. _______ UPDATE (Dec 2, 7:24 p.m.): In after-hours trading, the February contract poked very slightly above an external peak at 1835.50 that's equivalent to the one at 1829.50 noted above for the December. This has generated a bullish impulse leg, along with a minor, uptrending pattern that could provide some hooks for getting long. Stay tuned to the chat room for further guidance. _______ UPDATE (Dec 3, 6:18 p.m.): A struggle at
The bearish pattern in December Silver's chart, unlike gold's, is 'textbook' and unambiguous, leaving little doubt that a decisive breach of p=22.26 would send the futures down p2=20.40 in search of a durable bottom. Any lower would put the pattern's 18.55 'D' target in play, but we'll take this mini-bear market one step at a time. Friday's precise bounce from p implies that the two remaining Hidden Pivot levels can be used to bottom-fish, presumably using an rABC pattern of small degree. Moreover, a rally from p or p2 cold set up an equally opportune 'mechanical' short. ______ UPDATE (Nov 30, 9:31 p.m.): Today's chintzy poke to just below p=22.26 was not decisive, but the subsequent bounce will need to continue to at least 25.16 to take some pressure off bulls. _______ UPDATE (Dec 1, 9:27 p.m.): Shifting to the March contract, we can use the 24.78 'D' of this reverse pattern as a minimum upside target for the near term. An easy move through it would be bullish, and levels x and p can be used enroute to fashion 'mechanical' bids or to paper-trade them just to stay closely attuned to the trend.
I had expected the receding prospect of economic recovery to weigh on the markets last week, but it seemed not to have fazed buyers at all. They stood their ground even though the impact of new vaccine stories seems to have fallen off considerably since the big Pfizer announcement two weeks ago. Now, it would seem, there are a half-a-dozen players, and it's hard to tell which could deliver a cure that might put America back on track. In the meantime, bears should forget about reaping a bonanza right away merely because deeper recession looms. You can use the 3798.50 target shown in the chart as a minimum upside projection for the holiday season, and p=3498.75 as a place to park a 'mechanical' bid. The required stop-loss at 3398.75 implies entry risk of $5000 per contract, so we'll want to convert the set-up using an rABC on the lesser charts to cut it down to size. For now, our short-term trading bias should remain bullish.
Bitcoin Mania 2.0 waxed so exuberant last week that I've hauled out a big-picture chart to show you what rabid buyers will be up against when business resumes in earnest Sunday night. My strong hunch is that they will make short work of the 21.63 midpoint Hidden Pivot resistance, putting a 39.50 target theoretically in play. The pattern is well up to snuff for creating bullish mechanical trade set-ups, although the implied $900 entry risk for some of them may call for tactical measures using our rABC workhorse. Stay tuned, because it's going to be a bumpy ride. _______ UPDATE (Nov 24, 5:55 p.m. ET): The rally is now powerful impulsive on the weekly chart, unlikely to pull back to the green line to trip a 'mechanical' buy. That means we'll need to improvise a more daring entry-on-the-fly, competing against a world that has gone crazy-bullish on bitcoin. Stay tuned to the chat room for intraday guidance, even if you are already aboard.
DIA has been stalled for two weeks at February's record highs, likely marking time until the mood is right for the next big thrust. Considering the unsettled state of, well...everything, investors' complacency has been extraordinary -- and I don't mean in a good way. Funny money talks, and for better or worse, we are living at a time when there is just no shutting it up. As before, a pullback to p=282.74 would trigger a mechanical buy, stop 275.64, and the D target at 304.07 is still short-able with a tight stop-loss if you've made money on the way up. _______ UPDATE (Dec 8, 5:51 p.m. EST): The target still looks good as a place to attempt a very tightly stopped short, but there has been no opportunity to ride with the trend, since it has been characterized by a series marginally higher highs separated by swoons three to four times as large. _______ UPDATE (Dec 9, 8:43 p.m.): DIA popped to 303.60, 1.10 points from the target. Since no one mentioned this in the chat room, I'll assume for the time being that there is little or no interest in trading this vehicle. Comments? Fills? FYI, this vehicle is still a short as long as it continues to hover within inches of the target. ______ UPDATE (Dec 10, 6:20 p.m.): There were a couple reports from subscribers who took action at Wednesday's top, but tactics varied too much for me to establish a tracking position. Even if I did, Friday looks like it could be a coin toss.
Gold's consolidation since July has been an ordeal for investors, but the good news is that bears will be ready to keel over dead when the time comes. They've struggled hard to push bullion lower, and even though their efforts have been helped occasionally by air pockets such as the 100-pointer we endured one day a couple of weeks ago, they know that we know these fright-mask tactics will not win in the end. For the time being, however, let's stay focused on the 1809.60 target that has kept us from getting sucked in by head-fakes and distributive rallies. This Hidden Pivot is not of the highest quality because the impulse leg is illegitimate, but the futures can still be bottom-fished with a tightly constructed 'rABC' pattern on the lesser charts. Alternatively, it would take a print at 1983.90 to sound 'taps' for bears. _______ UPDATE (Nov 24, 6:03 p.m. ET): The way this brick has been plummeting, one might think traders are dumping gold to raise cash for bitcoin. The futures have crashed the 1809.60 target with ease, implying that whatever rally is coming, unless it exceeds 1898.00, will be a short sale.
Silver's downtrend since late July has probably given bears even less satisfaction than gold's. It is a corrective dirge that last week resisted falling to a midpoint Hidden Pivot support at 23.10 where we could plan on bottom-fishing. Odds are high of an upturn beginning from somewhere between the red line and the 22.62 low recorded on 10/29. The trade is best initiated with an rABC pattern, possible using a=23.67 from 11/19 on the daily chart. If the trade is stopped out and the futures close beneath the red line, that would imply more jeopardy down to as low as D=20.08. _______UPDATE (Nov 24, 8:59 p.m.): Silver has bounced nicely from just below 23.10. If you did the trade exactly as directed, using a 'reverse rABC' set-up with a=23.67, you could have cashed out at the red line for an $1100 profit shortly before 9:00 p.m. Only one subscriber reported getting long near the 23.10 pivot as suggested, so I have not established a tracking position. If you simply bought there with a tight stop-loss, you'd be up around $1300 now, presumably able to manage the trade without much stress. Here's the chart.
We hold a small short position consisting of four Nov 27 272 puts that have flatlined. QQQ shows no inclination to break up or down, even if a Hidden Pivot target well below, at 272.84, remains theoretically viable. My gut feeling is that the Cubes will head higher, but not before they've corrected to at least p=285.99, or perhaps p2=279.42. The rally would have potential to 312.29, the Hidden Pivot target of a pattern going back to July 24's 251.32 low. The pattern looks authoritative, implying not only that the target will be reached, but that x=273.16 could be bought 'mechanically' with stop-loss at 260.11.
The futures spent the entire week in a tight range that reflected mounting uncertainties not only about whether Trump will reverse Biden's apparent victory, but how much more damage a resurgent Covid-19 will do to the economy. The reaction of stocks to vaccine news has become increasingly muted, since it is impossible to know at this point how much even a very effective vaccine would accelerate a recovery. Whatever the answer, it seems likely that even very good news will be the kind we are supposed to sell following eight months of bullish 'rumors'. We are constrained from doing much of anything in this vehicle, however, unless it re-visits the green line (11,193) to trigger a 'mechanical' buy. If it does, my gut feeling is that the subsequent rally will struggle for a long time to reach D=12804 if it reaches it at all. ______ UPDATE (Nov 27): With Friday's poke above p2=12.267, bulls have become an odds-on bet to achieve 12,804, although perhaps not with the reckless bravado we've gotten so used to over the years. They are now sharing the inflow of funny-money with small-cap stocks, a limitation that's likely to slow their ascent. _______ UPDATE (Dec 3, 6:46 p.m.): Although I have higher targets outstanding, the stall at a 12,550 minor target warrants caution.
