I have not updated my perennially bullish outlook for the dollar for a long time, and you can see why in the chart. DXY has come of March's 103 high with a so-far 6.3% sell-off that has done no technical damage to the long-term uptrend. Actually, a further selloff of 3.6% would come down to a trendline that is likely to evince good support. Pivoteers may also notice that a pullback to the green line would trip a strong 'mechanical' buy signal that is about as textbook as such trades get. 'Mechanical' trades work best when speculators get too far ahead of themselves in either direction. The pullback to the green line is Mr. Market's way of reminding them that overconfidence seldom pays off. The bullish outlook also implicitly raises a question that seems not to be troubling traders at the moment -- namely, what kind of moron would be buying the euro and other currencies in preference to dollars? Indeed, the rally in the euro is as stupid and groundless as the one in U.S. stocks at the moment. No currency will supersede the dollar, simply because it is the only currency big enough to facilitate the quadrillion dollar shell game that makes paper-shufflers rich. Also, the world will continue to prefer to pay for real things, most particularly crude oil, with a currency that is in practically infinite supply. If you read anything suggesting that the dollar has entered a bear market, save your time energy, since it was written by some bozo with poor comprehension of the currency market's underlying dynamics. _______ UPDATE (Jul 21, 7:18 p.m.): I road-mapped a potentially nasty correction months ago, and so it has been. But the dollar will generate a 'mechanical' buy at 94.48, stop 88.25 if it falls to the
Gold has come crawling out of the gate Monday morning, down as much as $13 just ahead of the NYSE opening. The bounce from 1738.40 is mildly encouraging, however, since this level corresponds almost to-the-tick with a midpoint Hidden Pivot support. In theory, for uptrends to remain dominant, corrective abc patterns must reverse at or near their respective midpoint pivots as may be happening here. When this has occurred, we also know that a relapse breaching the pivot would likely find its way down to D=1730.00, whence a presumably tradeable bounce precisely from that Hidden Pivot would become likely. In this case, the fledgling rally is approaching the point 'c' high of the pattern and would negate the pattern itself with a print at 1746.80. That would be reason for an added ounce of optimism, putting a 1754.40 target theoretically in play (15-min, A= 1728.60 on 5/29 at 4:00 a.m. EDT). ______ UPDATE (June 1, 7:05 p.m.): The 1754.40 target boldfaced above caught the intraday high within four ticks. I have slightly modified the pattern to show a 1770.00 'D' target that would become an odds-on bet to be reached if buyers can push the futures decisively past p=1753.80. Be on the alert for a 'mechanical' buying opportunity, since gratuitous swoons are always possible in this vehicle. _______ UPDATE (June 2, 5:15 p.m.): Gold's tortuous, mincing rallies, punctuated by gratuitously nasty plunges, have become too tiresome to be taken seriously. The futures are easily tradeable, however, using the Hidden Pivot tools at our disposal. Stay tuned to the Trading Room and post your technical observations if you care to interact with this vehicle.
A deftly engineered swoon Sunday night has tripped a textbook 'mechanical' buy at 3017.00, the green line (see inset). You'd have needed guts to stand pat with a bid there, considering how difficult it was to discern what was moving index futures at the time. The slingshot bounce from the lows promises to reach the 3092.00 target, although we shouldn't expect it to happen as easily as Sunday's short-squeeze on almost no volume. We'll look at getting long via a 'mechanical' set-up if the futures rally and pull back to the red line in the way we prefer. _______ UPDATE (June 2, 5:25 p.m. EDT): The futures will hit 3092.00 as predicted and expected. Short there only if you've made at least $800 on the 50-point rally that has occurred to get them there. _______ UPDATE (June 3, 11:13 p.m.): No guesswork is needed. The futures are all but certain to connect with the 3177.50 target shown in this chart. It was first mentioned here several weeks ago, along with another that will show some stopping power at 3153.25.
Although GDX has not fallen to the green line to put the 30.97 target in play (see inset), I've drawn the pattern with a bearish bias just in case. I am not down on this vehicle at the moment, but a little bit of weakness could set up an attractive buying opportunity at 32.92, the pattern's midpoint Hidden Pivot. I will continue nevertheless to solicit crowdsourced ideas for getting long, and possibly even building a long-term position. But if we are going to attempt a buy-and-hold from the get-go, it will require an optimal entry point with clear opportunities to take partial profits along the way. _____ UPDATE (June 1, 7:13 p.m. EDT): A pullback to p at 2:00 p.m. generated an appealing 'mechanical' buy signal at 34.88. The subsequent rally appears bound for at least 35.54. No one has mentioned GDX in the Trading Room since Friday, implying there is very little interest in this vehicle at the moment. It is still a crowdsource project. ______ UPDATE (June 2, 5:35 p.m.): Two Hidden Pivot levels I mentioned in the Trading Room this morning look promising for bottom-fishing: 33.65 and, especially, 31.77 (corrected). Here's the chart. I've suggested using rABC or 'camouflage' to get aboard, but a limit bid and tight stop-loss will do if easy entries are your preference. ______ UPDATE (June 3, 8:45 p.m.): I'd suggest a light touch if you plan to bottom-fish this cinder block at 31.77 -- a 12-cent stop-loss at most. If it's hit, we can try again 'counterintuitively' beneath the 31.31 low recorded on May 1. Tune to the Trading Room for rABC guidance in real time. ______ UPDATE (June 8, 9:56 p.m.): GDX tripped a picture-perfect 'mechanical' buy at 32.39, but it went unnoticed in the Trading Room. I'll leave this vehicle
DIA's spirited leaps through two Hidden Pivot resistances since mid-May has made a run-up to the D target at 267.28 very likely. Although I restored this vehicle to the touts list in order to provide an equity-based trading alternative to futures contracts, the juicy 'mechanical' entry set-ups we look for have been relatively few and far between. That's because DIA is usually playing catch-up with index futures at the opening bell, creating bullish gaps that leave our fire-sale bids in the dust. Be that as it may, we'll continue to look for opportunities as they arise, probably going against the trend in places like the 'D' target here. We should be prepared nonetheless to jump on intraday swoons if they come our way.
June Gold trampolined off a 1683.10 Hidden Pivot Wednesday, enabling subscribers to get long in their favorite bullion vehicles at or very near the intraday low. I'd posted a heads-up in the Trading Room as the futures began their turn, noting that the 1683.10 'secondary pivot' of a pattern that has been in progress for six weeks was a 'logical' place for a bounce. The futures rallied $30 from an actual low at 1684.20, and although they are not yet out of the woods, the bounce has turned the hourly chart bullish and breathed new life into targets as high as 1879. ______ UPDATE (May 28, 7:01 p.m. EDT): What would it take to imply the futures are out of the woods? Answer: an upthrust exceeding the 1757.60 peak recorded on May 20. I've set a screen alert to wake me when bulls get there.
I've adjusted our rally target slightly upward to 3069.00, a high-odds turning point that you can short provided you've made at least $600 on the way up. The 'mechanical' buy I'd noted here yesterday is currently profitable to the tune of about $3300 per contract, but I did not recommend it because it came off a 'sloppy seconds' signal. Anyone who took the trade would have suffered an adverse swing of about $1000 per contract before it came home, although the 'mechanical' setup ultimately worked as such trades are supposed to when stocks swoon violently. As always, an easy move past so clear a Hidden Pivot resistance as 3069.00 would imply the uptrend is likely to continue. ______ UPDATE (May 28, 7:04 p.m. EDT): The intraday high occurred two ticks off the original target, 3065.50, but it was close enough for some Trading Room denizens to make hay. Here's a report from one of them, MattB, a regular at the Wednesday morning tutorial sessions: "Rick, sorry, but I missed the [E-Mini Nasdaq] trade. I was busy using your tricks in [the E-Mini S&Ps]. Paid for the next few years' subscriptions with two contracts in 23 minutes." We should know soon if the target caught an important high ahead of the weekend.
I sometimes joke that virtually every trading vehicle, in every time frame, whether trending up or down, reverses from p2, the secondary pivot, virtually every time. Or so it would seem. I was never really a p2 kind of guy, but my mentor, Ira Tunik, used it so often, and persuaded so many Rick's Picks subscribers that it was important, that I eventually started to pay attention. That's when I began to see that it actually does repel trends almost as consistently as my beloved 'p' midpoint Hidden Pivot. It has also become clearer recently that some of the most successful traders in the room have been using p2 to set up rABC trades that deliver as consistently as a loose slot machine in a Reno bust-out joint. All of which is intended to call attention to the chart shown in the inset, a weekly graph of the E-Mini Nasdaq futures. This lunatic-powered vehicle comprises an invincible core of no-decision stocks that institutional holders would never even consider selling. That is why it is spitting fire at the moment, just inches from record highs. Notice as well that Wednesday's peak, which put a new high on the bounce from March's Mindanao abyss, occurred almost precisely at p2=9585. I wouldn't want to put ideas in your head, but there are worse places to attempt getting short. Just sayin'. We can use puts in $NDX, so stay tuned to the chat room for timely ideas -- or make sure you've enabled 'Updates' on your account page. The caveat here is that buyers shredded the 8600.00 midpoint pivot the first time they encountered it on the way up. This made it likely that D=10,571 will be reached. As you can see, it sits well above the current record high at 9763.00. I can't
Using just two or three of our Hidden Pivot entry tactics in various time frames creates more intraday opportunities than we are able to exploit. This session provided good evidence of this as we looked to force trades in several popular vehicles. We’ve done this before, but with some new refinements, particularly in the way we use rABC setups, it’s possible to find good trading opportunities all day long, even when picking trading vehicles at random.
Friday's agitated price action was telegraphed at 3:00 a.m. overnight, when the futures meandered aimlessly below a clear Hidden Pivot support at around 3:00 a.m. This somewhat altered our immediate outlook without significantly affecting its bullishness. Keep the aging, 3153.25 target in the back of your mind as the futures work their way higher, but use the 2984.50 midpoint resistance of the pattern shown as a minimum upside objective for the near term. It will be an enticing spot to squeeze off a short, but not unless you've made at few bucks on the way to it. A drop of as much as 50 points on Monday would change nothing. _______ UPDATE (May 26, 7:53 a.m.): It took the swarm of locusts 18 hours to munch through 2984.50; now the immediate objective is 3024.88 (see inset), and thence the pattern's D target, 3065.25. _______ UPDATE (8:59 p.m.): A meaningless selloff late in the day triggered a 'mechanical' buy signal at p=2984.50, stop 2957.50, but I didn't recommend the trade because of its poor timing -- i.e., at the closing bell. We'll take another look if the futures come down to x=2944.13, the green line.
