GDXJ is probably within no more than five points of groping its way to the bottom of the textbook head-and-shoulders pattern shown in the hourly chart (see inset). If it's going to revive sooner rather than later, though, the secondary pivot at 43.44 would be a logical place for this to occur. You can bottom-fish there with a tight stop-loss, using expiring call options if you've got the chops. I've used a dubious one-off 'A' high here, and the pattern could turn out to be governed by the marquee high at 55.58, so plan accordingly.
The Dollar Index pulled back hard on Friday, half-correcting the steep upthrust from two days earlier. Given how the uptrend impaled the midpoint Hidden Pivot (p=107.36), there is little room for doubt about whether D=109.30 will be reached. As noted earlier, that would keep weight on gold. It would also set up a potential 'mechanical' buying opportunity at p=107.36. We don't often do this trade at p, but the trend is so strong that waiting for a relapse to the green line (x=106.39) might leave us empty-handed when the turn comes. _______ UPDATE (Dec 28): The dollar has hovered stubbornly aloft, denying us an opportunity to bottom-fish at the red line (p=107.36). The trade recommendation remains viable nonetheless.
I am playing fast and loose with crude's 'technicals' this week, since chat-room interest in this symbol appears to be dead. As such, I have little reason to provide potentially tradable ABCD coordinates. Instead, here's a perfectly serviceable pennant formation with the January contract falling to around 67.50 before it gratuitously reverses direction. Nudge me in the chat room if you actively trade this symbol and require more-detailed guidance. A bearish bias is warranted, albeit with close attention to the vicious feints and head- and foot-fakes that have always characterized this vehicle's movement.
The tightly stopped short I suggested at 6109.00 two weeks ago is holding, since the December contract has traded no higher than 6111.00. It took a nearly 60-point rally to trigger the trade, since the futures were at 6051 when I made the recommendation. Did my target catch an important top? We'll know soon, since the subsequent selloff ended last week just shy of the 6036.50 correction target shown in the graph (see inset). If you've been short for the ride down, cover 50% to 75% at 6036.50 and place a stop-loss at 6085.50 for the rest. If it's hit, that would imply new record highs are coming. Even so, let's be alert to the possibility of a fake breakout that would trap bulls and shorts alike. Alternatively, a two-day close beneath 6036.50 would be reason to take this weakness seriously.
MSFT sold off hard after wafting into the middle of the supply zone I'd detailed here last week. Accordingly, I've used a somewhat unorthodox, bearish reverse pattern to tell us whether there is any conviction behind the selling. Use 438.46 as a minimum downside target for the near term, and don't hesitate to try bottom-fishing there, especially if you know how to set up a 'camouflage' trigger that would limit entry risk to no more than 5-10 cents per share. If sellers crush the 'hidden' support at 438.46, expect more downside to D=420.76. That would be a big deal, since MSFT's recent strength has restored it to its position as the most important stock in the world -- not merely a bellwether, but THE bellwether for the everything bubble. _______ UPDATE (Dec 18, 11:59 p.m.): It's possible that my decision to resurrect Microsoft as our #1 global bellwether may have caught a very important top. MSFT's unsettling plunge today was nastier than we might have expected, especially considering the company's revenue stream from recurring subscriptions is practically bomb-proof. And yet, the stock fell 3.76%, trailing only Amazon and Tesla in the megastock loser's column. The latter's share price is so bloated with Musk-worship in a dangerously saturated EV market that TSLA will undoubtedly turn out to be the best short in the lunatic sector once the bear market has run its course. I'd warned in the current 'Morning Line' (see above) that Mr Market might throw the kill switch at the height of Santa season, the better to crush the multitudes who evodently fear an ugly surprise, if it materializes, early in the new year. If Wednesday's selling picks up tempo into week's end, we'll have our answer: a Christmas bloodbath for investors. How very clever it would be for
T-Bonds got crushed last week, reversing precipitously from within an inch of what would have been a bullish breakout. The gap down through p=91.82 all but guarantees the downtrend will continue to a minimum D=88.78, a Hidden Pivot support that can be bottom-fished by interpolating the target for March T-Bond futures. The reversal is likely to work precisely if at all, so you can use a stop-loss as tight as 3-4 ticks (or a 'camo' trigger) to get long. If the target is easily penetrated, that would be bad news for bonds and correspondingly bullish for interest rates. Higher rates would of course keep pressure on gold.
I've reproduced the 'mystery levels' that were blacked out earlier because the pattern has been quite useful for trading purposes. The pullback from p=100,011 was easy to short, as was getting long 'mechanically' on the 12/5 pullback to the green line (x=93,344). With any luck, the next burst will hit D=113,343 exactly, providing us with an optimal place to exit long positions and/or reverse them with the tightest stop-loss conceivable. The balky action at p means there can be no guarantee that D will be reached, so don't hesitate to attempt shorting at p2=106,677 with a reverse-pattern trigger that cuts theoretical entry risk down to size. _______ UPDATE (Dec 16, 1:52 a.m. EST): BULLSEYE! The 106,677 Hidden Pivot I’d suggested using to short this rabid badger caught the top of a $3,900 spike within one-tenth of a percentage point. It was a new record high for Bitcoin, and the precipitous reversal that followed could have been worth as much as $2,378 so far to any subscriber who was paying close attention. The ‘camouflage’ trigger I’d advised using to hold entry risk down to a practical minimum is a proprietary trick, but for the record, the short would have triggered at 106,314 less than two minutes after the top was in.
Last week's rally ended with 10-Year rates sitting just above a midpoint Hidden Pivot resistance at 4.38%. If Monday's close is above this number as well, that would portend more upside to D=4.63%. This would be bad news for all who owe dollars, a class of businesses and individuals whose size is almost beyond imagining and which includes commercial real estate developers who have been hanging on for dear life. It will also put further pressure on bullion, which has faltered in recent weeks. If there's a silver lining, higher rates will also constrain our elected representatives in Washington from spending like drunken sailors.
We'll find out soon whether Mr Slammy has bigger ambitions than the so-far two-day thrashing he has administered to gold futures. The small reverse pattern shown yields a target at 2643.00 that is probably the best bulls can hope for. You can bottom-fish there with a 'camouflage' trigger created from five-minute-or-less bars, but if this 'hidden' support is easily exceeded, brace for more downside to at least 2628.10. That's the midpoint Hidden Pivot support of a big pattern (A=2826.30 on 10/3) associated with a D target at 2497.40, a worst-case target for 2024. ______ UPDATE (Dec 17, 12:52 p.m.): The futures have turned higher from within an inch of the 2643.00 minimum downside target given above. A relapse would encounter 'voodoo' support near 2632.70 that can be bottom-fished with a small-pattern (aka 'camouflage') trigger. Otherwise, the so-far modest bounce will need to touch 2683.50 to suggest a recovery and become interesting.
The futures bottomed Friday at a key support, the 30.728 midpoint Hidden Pivot of a pattern that projects to as low as D=28.18. The pattern is gnarly enough to offer some potential trading opportunities, including bottom-fishing at p, p= p2=29.456 or even D. Also, a rally from the sweet spot between p and p2 would set up an enticing 'mechanical' short from x=31.999, stop 33.275. As always, a decisive penetration of the midpoint support (p=30.728) would portend more slippage to at least p2, or possibly D.
