The 3357.00 rally target identified here earlier remains valid as a minimum upside objective for the next day or two, a lodestar for a trip to the 3392.75 target of a larger pattern that was also noted here. The only surprise is that the futures spent all day and most of the previous night flouncing around within an excruciating, 10-point range, the better to fray the nerves of bulls and bears alike who may have been overprepared for 'something' happen. Because pullbacks this week have been timid, there have been no opportunities to get aboard using a 'mechanical' set-up, a tactic designed especially for taming and exploiting violent swings.
The futures have spent the last two weeks consolidating for a relatively modest push to the 3392.75 target shown. It's an oldie, and although it is all but guaranteed to be reached, it could conceivably mark an important top. We'll look to get short there regardless, using tight safeguards to avoid getting pulped if buyers simply forge higher. We would be no less eager to get short in new record territory, however, since the giddiness we might expect at those levels would be more conducive to a bull-trap high than any Hidden Pivot targets I could offer you. Stay close to the chat room if you want to avoid getting fooled. For the record, a pullback to the red line would trip an enticing 'mechanical' buy, stop 3080.00. If it triggers, you can paper-trade this one to enhance your understanding of 'mechanical' trades. Of the last dozen proffered here, only one that I can recall got stopped out for a loss. _______ UPDATE (Aug 3, 5:38 p.m. ET): Barring a collision between Earth and an asteroid, the futures will ascend to exactly 3357.00 and reverse tradeably from that Hidden Pivot over the next day or two. This pattern is gnarly perfection, and it can serve to get long 'mechanically' on any pullback from a Hidden Pivot level to the one beneath it (as occurred on Friday). The stop-loss would be a third of the differential between the entry price and D=3357.00. The 3392.75 target of a larger pattern remains valid as noted above, but this newer pattern can help us cut entry risk down to size on the way to it. _______ UPDATE (Aug 4, 6:42 p.m.): Remember, the futures must pull back by one full Hidden Pivot level to generate a 'mechanical' buy signal. The next would occur at
The mechanical buy triggered last Thursday lengthened our impressive winning streak, but also demonstrated that these trades are often scary. They are designed to exploit violent swings, and that is why placing one's bid at the green line often feels like trying to catch a falling piano. The theoretical gain on the trade so far would have been around $5500 per contract, with a shot now at an additional $11,000 per contract if the futures reach the D target at 26.975. That was the assumption at the time the trade triggered, although we typically take a profit on half of a four-contract position when it gets to the red line line. (The midpoint Hidden Pivot lies at 24.718 in this case, a millimeter above Friday's end-of-day high). Although the remaining $2.34 to be traversed cannot yet be considered a certainty, odds would shorten considerably on a decisive push past p, but even moreso on a two-day close above that resistance. _______ UPDATE (Aug 4, 6:56 p.m.) The last $2 of Silver's ascent have come so easily that I've switched to a bigger picture with a 31.560 target. First the futures will need to reach p=27.010, my minimum upside objective, but a decisive stab through it, or a two day close above it, would put the 31.560 Hidden pivot well in play. Here's the chart. _______ UPDATE (Aug 5, 5:28 p.m.): Bulls toyed with the 27.010 midpoint pivot as though it were a speed bag, implying they can easily take this vehicle higher when the feel like it. The next Hidden Pivot benchmark on the way to 31.560 is p2=29.285, so we'll make that our minimum upside objective for now. It seems likely to be reached by no later than Friday. ______ UPDATE (Aug 6, 10:39 p.m.): The futures came within 8
The futures appear to be basing for another rally, although they cannot yet be considered an odds-on bet to achieve the 2285.90 target shown in the chart. A move at least somewhat higher over the near term seems likely, however, given the way last week's sharp thrust exceeded the 1981.60 target shown here. The small overshoot may not look significant, but in the visual context of an ABC pattern so clear and compelling, that's sufficient to warrant a bullish trading bias. The upbeat picture would change, however, on a pullback early in the week exceeding the 1941.70 low recorded on Thursday. Otherwise, look for buyers to cruise above 2000 -- for the first time ever -- soon. _______ UPDATE (Aug 4, 7:06 p.m.): The move above $2000 has been so effortless that the futures should be presumed headed to p2=2046.30, at least, arriving either today or early Thursday. As always, a decisive stab through a Hidden Pivot level would imply a move to the next -- in this case the 2091.00 target of the pattern shown in this chart. A surprise swoon to the green line would trigger a mechanical buy, stop 1912.10. _______ UPDATE (Aug 5 8:34 a.m.): The futures have pulled back a mild $7 after topping at dawn at 2048.00, a hair above the 2046.30 pivot I'd proffered as a minimum upside target. Once this correction has run its course, a decisive pop past p2=2046.30 would all but lock up more upside to the 2091.00 Hidden Pivot noted (and shown in the chart) above.
The chart (see inset) shows how this ETF for the Nasdaq 100 came within an inch last week of a 271.90 secondary pivot that has the potential to cap the most powerful rally ever. My hunch is that QQQ will exceed this 'hidden' resistance decisively, signaling more upside to D=307.56 over the near-to-intermediate term. I base this on the fact that buyers surpassed the very clear 'D' target of a lesser pattern without hesitation, and that they have since danced at those heights with little sign of fear. Here's a chart that shows this. The unmitigated bullishness of it seems absurd, given the ridiculous valuations already factored into the Naz. As you know, however, in these precincts charts will always hold sway over common sense. ______ UPDATE (Aug 6, 10:50 p.m.): Monday's gap through p has left no doubt where the Cubes are headed next. They are all but certain to reach D=283.76 within the next couple of days, but don't be surprised to see that Hidden Pivot resistance impaled, since there will still be an outstanding target at 307.56 (see above).
In dollar terms, the nuclear short squeeze in AAPL that finished out the week was the most powerful and consequential in history. Friday's detonation catapulted Apple ahead of Aramco as the most valuable company in the world. That's not bad for a consumer-goods manufacturer whose main source of revenue is an overpriced smartphone. The rally in the stock amounted to a 10% gain, pushing the Cupertino firm's market cap to $1.817 trillion. That's surely a record for financial markets on this planet, but for all we know it could have set a record for the galaxy. The sum is equal to 30 times projected sales, a bit rich considering much of the economic world has entered a depression or is close to one. For those interested in knowing where the stock is headed next, it looks all but certain to achieve a minimum 456.19, the Hidden Pivot target shown in the chart. ______ UPDATE (Aug 6, 11:12 pm. ET): The vertical pitch of Apple's rally is conceivably the stupidest thinggg happening in the galaxy right now, an orgy of greed and hubris that should embarrass not only Wall Street, but all of civilization. However, the reason for it is not hard to fathom: Since every $1 rise in the price of the stock adds $4 billion of 'wealth' to the financial system, it becomes possible for just this one stock to postpone the collapse of America's public and private pension systems. This looming catastrophe is inevitable and will start with the bankruptcy of Illinois, quickly metastasizing into more than two dozen other states. All of them would become basket cases if AAPL were eventually to fall below $100, which is why it absolutely will.
It's been a long slog to the 45.71 target since GDX tripped a 'buy' signal back in mid-June at 34.84. I crowd-sourced the trading of the stock because it became too much of a headache to do so myself, especially during the grinding, two-month consolidation begun in late April. In retrospect, the rally could have been positioned as a buy-and-hold, since the pullbacks that punctuated the steep July uptrend were not too painful in comparison to the gains racked up from one peak to the next. We'll have to see what happens after 45.71 is achieved, but, as always, a decisive push past it on initial contact would be bullish. Regardless, if you've held a long position all the way up, I'd suggesting lightening up, possibly with some just-in-the-money covered writes. Above 45.71, the weekly chart allows for more progress to as high as 51.72. ______ UPDATE (Aug 5, 6:14 p.m.): Numerous subscribers reported using my longstanding rally target at 45.71 to exit long positions or lighten up within pennies of what could turn out to be an important top. They sidestepped considerable pain in the process, since GDX subsequently fell $1.76 to 44.02 before staging a modest bounce into the close. I don't expect bulls to come roaring back, at least not right away, but if they do, use this 48.55 target as a lodestar, and thence 51.72 (as noted above).
I instituted coverage of this vehicle a while back to provide an equity-based alternative for subscribers who'd rather not trade futures. Unfortunately, we've been hobbled finding good entry points to leverage puts and calls because DIA only trades during daytime hours. That means it is most often playing catch-up with index futures, which tend to hit tradeable reversal points in the dead of night. Most recently, over the last two weeks, DIA has failed to reach a red-line resistance at 273.14, a Hidden Pivot we've used as a minimum upside target that could have provided some attractive opportunities to get short. In each case, the E-Mini Dow did touch the equivalent 'p' during the night session. Another problem is that DIA's pullback to the green line last Thursday would ordinarily have been used to trigger a 'mechanical' buy. In the actual event, however, I couldn't justify the trade because the high preceding the pullback did not quite reach p. I am not about to abandon DIA because of the problems noted above, but I wanted you to be aware of why good trades in this vehicle have been few and far between.
A perfect 'mechanical' buy triggered in the final hour of Wednesday's session (see inset) when the futures spasmed violently for who-knows-what stupid reason. However, even if you had been expecting this, execution would have been difficult, requiring lightning reflexes and plenty of luck. In any event, the futures should now be presumed bound for the 26.975 target, at least, even if they have yet to reach the 24.718 midpoint pivot where taking a partial profit on half the position would be in order. _______ UPDATE (Jul 30, 2:32 p.m. ET): The futures spent the day treading water, suspended midway between the 23.589 'mechanical' entry point and the theoretical stop-loss at 22.45. I am unable to predict with any confidence how this tedious dirge will settle, but I'd become a buyer again below the stop.
August Gold's leap Monday night missed a longstanding target at 1992.40 by $18, which ordinarily would warrant a cautious stance for at least a few days. In this case, however, the recovery following an overnight sell-off has been so quick and effortless that a lasting push above $2000 seems all but assured. The modest, 2006.20 target shown in the chart is one of several I could have displayed, but it will suffice for now as a minimum upside objective. I'll haul out some bigger charts with more ambitious targets once gold looks like it has found solid footing above $2000. ______ UPDATE (Jul 30, 2:35 p.m. ET): Today's snoozefest did not alter the bullish picture for the near-to-intermediate term.
