The selloff on news of Trump's illness triggered a 'mechanical' buy in the wee hours on Friday, but the position is probably no better than an even bet to survive whatever news greets the markets when they re-open Sunday night. There was a theoretical profit of $850 per contract in the trade at the closing bell on Friday, but anyone who took the position home over the weekend was going out on a limb. The 3438.25 rally target will remain viable unless the futures drop below C=3291.25 first. That is all but certain to happen if the President's condition worsens over the weekend. His symptoms have been mild so far, but so were Boris Johnson's initially. A selloff Sunday night could be expected to fall to at least p=3277.25, where you can bottom-fish with a very tight stop-loss. However, if this midpoint pivot fails, the next stop would be p2=3221.88. Here's the chart. _______ UPDATE (Oct 5, 5:03 p.m.): Trump survived the weekend, disappointing millions and sending stocks into an ebullient short-squeeze that was continuing in the early evening. The 3438.25 rally target is not in doubt, but if you want to go short, use this pattern to position a tight rABC against the mob.
DIA barely got its hair mussed Friday on news that Trump has been infected with Covid-19. Even so, the intraday high fell well shy of a midpoint resistance at 281.36 that bulls will need to demolish in order to clear a path to the 297.45 target. On balance, we ended the day with no significant bias either way. That would change dramatically, however, on any news over the weekend that the President's condition had worsened. If that happens, expect DIA to gap down to at least p=270.87, or even to p2=266.13, with 261.39 as the worst case, short-term. Here's the chart. If Mr. Trump is reported to be doing 'great' but there are no confirming television images of him smiling from his bed at Walter Reed Hospital, you can use tightly stopped call options to bottom-fish p=270.87 with a tight stop-loss, since that's where DaBoyz are likely to stage their first rally attempt on inconclusive news. _______ UPDATE (Oct 5, 5:10 p.m. ET): Sunshine and lollipops poured down on Wall Street yet again as DIA hit 281.59 after gapping higher on the opening. Now, two consecutive closes above p=281.36 will all but clinch more upside to the 297.45 target noted above. _______ UPDATE (Oct 8, 8:02 p.m.): DIA has done what we asked of it, but not with sufficient brio to imply that a blast to 297.45 is a done deal. To be cautious, we'll use p2=289.41 (see inset) as a minimum upside projection for now.
The Cubes laid an egg on Friday to end a week that had begun with a scorching rally. The news concerning Trump caused bulls to turn tail and left bears less than eager to cover short positions ahead of the weekend. From a technical standpoint this vehicle failed to trigger a 'mechanical' buy on the drop to the green line because it had failed to reach the red line first (see inset). There is nothing bearish about this per se, but it is most unusual for QQQ to miss an opportunity to signal a 'mechanical' long following a decent rally leg on the hourly chart. Since the failed upthrust was impulsive nonetheless, having exceeded some distinctive 'external' peaks, we should give bulls the benefit of the doubt as the week begins. All bets are off, however, if the news from Walter Reed Hospital is concerning. _______ UPDATE (Oct 5, 5:23 p.m.): If bulls are going to put Friday's punk performance behind them, they'll need to push this hoax up to at least p=286.20 -- or better yet past it, to demonstrate some of the mettle it will take to achieve D=312.29. _______ UPDATE (Oct 9): Even with a short-squeeze gap on the opening, the Cubes still fell a millimeter shy of p=286.20 when they ought to have exceeded it. We'll give bulls the benefit of the doubt for the moment anyway, but the yellow flag will be out until such time as they impale the red line. _______ UPDATE (Oct 12, 7:12 p.m.): My gut is saying D=312.29 will be reached eventually, but you can try shorting p2=299.25 anyway. Use puts priced under 0.65 that expire this Friday, but do the trade only if QQQ is within 0.07 points of the target. Stop yourself out if 301.40 is touched. Here's
Gold was probably oblivious to news of Trump's illness on Friday, but not to the modest upswing in the dollar. As a result, the December futures couldn't hold onto a $7 gain achieved overnight. The intraday high occur an inch above the 1921.90 Hidden Pivot I'd proffered as a target the night before, but that's not enough to assume with confidence that the subsequent pullback is going to be a consolidation for another leg up on Monday. Bulls held the edge at the bell nonetheless, and as long as they don't let the futures dip below C=1885.80 (see inset), they shall remain favored. _______ UPDATE (Oct 5, 5:27 p.m.): The rally on dollar weakness may have looked impressive, but it exceeded zero 'external' peaks. The closest lies at 1925.50 (9/21 on the hourly chart), and let's hold the applause until it has been breached on a closing basis or decisively bettered intraday. ______ UPDATE (Oct 6, 8:18 p.m.): The timid poke above 1925.30 should have fooled no one -- but it obviously did, given the way gold collapsed on news that Trump had taken stimulus talk off the table. The bullish trend since Sep 28's 1851.10 low remains intact nonetheless, but the burden of proof has shifted heavily onto bulls. Whatever happens, plan on bottom-fishing with a tight stop-loss if and when the futures fall to the 1838.00 target shown in this chart. _______ UPDATE (Oct 9, 8:59 a.m.): This morning's so-far $33 upsurge would need to tack on an additional $56 to become technically significant. Here's a chart that explains why.
It could go either way, but I've featured a bearish chart because last week's high failed to exceed any external peaks. That would have put the December contract on track for a run-up to 25.12 or so. As things stands, the bearish pattern we used last week to plot a move down to 21.50 is still viable, even though this Hidden Pivot target was nearly reached on 9/24. The near-miss made the subsequent rally to the green line a 'mechanical' short, albeit an unappetizing one, and there things stand. Look for a move down to at least p2=22.45 Sunday night or Monday if bulls are unable to make any headway at the outset. _______ UPDATE (Oct 5, 5:35 p.m.): Just to be safe, and also unfoolable, let's stipulate that the futures fist-pump above the 25.30 'external' peak recorded on 9/21 before we break out the Prosecco. _______ UPDATE (Oct 6, 8:33 p.m.): Silver flunked our test, penetrating p=23.178 on the way down. This has shortened the odds of more weakness down to at least D=21.680 over the near term. Here's the chart. _______ UPDATE (Oct 8, 8:24 p.m.): The rally from Tuesday's 22.96 low tripped a 'mechanical' short at the green line, but I'll pass up the trade because of the poorly formed C-D leg. It is elongated and choppy, features that tend to diminish the tradeable value of a correction that follows a strong impulse leg. We'll paper trade this one, keeping 21.680 as a downside objective. It would be negated by a pop above C=24.67.
Traders spent the last half of the week torturing each other for who-knows-what reasons. The downtrending pattern is too ugly, and the one-off 'A' too puny, for a precise call on further weakness, but we can still use the 93.34 target, since it is good enough for government work. That means Friday's fleeting rally to the green line was a 'mechanical' shorting opportunity, which further implies that 93.34 is likely to be achieved. If so, this would give bullion at least a little buoyancy early in the week. I wouldn't count on much more than that, however. _______ UPDATE (Oct 5, 5:40 p.m.): The bounce came from three cents above my 93.34 target, but it was not sufficiently robust for us to presume the correction begun from 94.61 on 9/25 is over. Set an alert at 94.04 if you want to be confident the trend is changing. _______ UPDATE (Oct 6, 8:40 p.m.): DXY took a strong leap from 93.34 on a retest, sparing anyone who was long in gold or silver a nasty surprise. The rally would need to pop above 94.34 to turn the chart bullish again and put a 95.33 target in play. Here's the graph.
The futures spent most of the week moving higher, but the rally ultimately failed to negate the bearish pattern shown. This means the Mini-Naz was a decent short on Tuesday at x=11,143, since the 10,445 downside target has yet to be achieved. Would we have stayed short ahead of the weekend? Given the news concerning President Trump, it was probably a decent bet. However, we never presume to know how the thieves and bozos who dominate Sunday night's price action will behave, so we never feel guilty going home on Friday without a position. Nevertheless, I've suggested bottom-fishing midpoint pivots in ES and DIA that correspond to the one at 11,090 shown here. You should attempt this only if you know how to set up an rABC trigger at the red line that would risk $150 or less initially. _______ UPDATE (Oct 5, 5:48 p.m.): The intraday low never got down into our buying range near 11,090, but the rally will need to pick up tempo to persuade that bulls are back in charge. If so, they'll announce it with a pop to at least 11,623, the 'D' target of this minor pattern. If you've caught a profitable ride higher, you can try shorting there with a stop-loss tightened with a small rABC. _______ UPDATE (Oct 6, 8:49 p.m.): Far from popping its cork, the E-Mini Nasdaq turned leaden, plunging beneath the 'C' low of the minor bullish pattern we used to project 11,623. That would have stopped out enough bulls to induce a snap-back rally, but so far one has not occurred, and that's bearish.
December Silver's failure to reach the bearish target at 21.50 shown in the chart is encouraging. The pattern is clean and compelling, if somewhat gnarly, and the target should therefore have been achieved if sellers had good command of the board. The fact that they evidently don't is bullish by implication, and that means this rally is probably no worse than an even bet to probe resistance between $27 and $29 that accumulated over the last six weeks of summer. A pop on Thursday above 25.30 would all but clinch that scenario. _______ UPDATE (Sep 30, 5:55 p.m.ET): The futures went the wrong way, but this did not diminish the so-so odds of a pop above 25.30.
Gold wasn't quite believing the weakness in the dollar or it would have racked up an even bigger gain on the day. Even so, each of the three upthrusts that occurred Tuesday exceeded a prior peak, refreshing the bullishness of the intraday charts and suggesting that higher prices lie ahead. By day's end, the December contract had slightly exceeded a 1904.20 target I posted in the chat room. This was neither bullish nor bearish, but the so-far shallow pullback to 1899.60 is. Let's see how bulls do over the next day or two dealing with thick supply between here and 1925.00. _______ UPDATE (Oct 1, 6:07 p.m. ET): Just a little more push will connect with the 1921.90 Hidden Pivot target shown in this chart. A decisive move past it on first contact would be bullish.
The Dollar Index poked tentatively above a Hidden Pivot target I'd flagged at 94.61 on Friday, but bulls will need to put a little more gusto into it to show they are capable of taking DXY to 100 and beyond. To be sure, September's steep rally has earned a rest. But if new multi-year highs are coming, the pauses should be brief if not necessarily gentle. Indeed, a steep dive followed by an equally sharp recovery would be the best evidence we've had to date that the rally is for real; that's how bull markets behave. In the meantime, we'll take the smaller, bullish patterns as they come. The one in motion now, begun from 93.93 on 9/23, target 94.85 on the hourly chart. It can be bought 'mechanically' on a pullback to p=94.52, stop 94.30; or to x=94.36, stop 94.18. _______ UPDATE (Sep 29, 4:19 p.m. ET): Bulls had an opportunity to turn things around, but the bounce from a distinctive Hidden Pivot target at 93.84 couldn't get past even a single 'external' peak. Now, the likelihood is that DXY will grope and stumble its way down to lows near 93.50 recorded last week. Alternatively, it would take a pop above 94.30 to reignited the bull trend begun on September 1.
