Gold is down an unpersuasive $24 at the moment, perhaps resting for more-challenging adversity in the wee hours. We remain focused on two rally targets nonetheless: one at 1782.30 that is tied to a big pattern that's been in play for more than a week; and another, lesser Hidden Pivot at 1775.10 that is shown in the chart. Ordinarily we look to bid patterns like this one at the green line -- here 1696.80, and an implied stop-loss at 1670.60. That's risking $24,000 on a four-lot trade, so I am recommending it only to those with the Hidden Pivot chops to cut the risk by 80% or more. A buy at the green line would entail about the same dollar risk (using a 1696.80 bid, stop 1670.60), although it would be somewhat less hazardous, as well- developed green-line entries tend to be. By that point, depending on the time of day, it may be possible to substitute GLD, or options on it, for the futures contract. _______ UPDATE (Apr 13, 8:15 a.m. EDT): The trade recommended above missed triggering at 11:00 p.m. by a micron. Cancel the order, since I'm not keen on sloppy seconds in this instance. If anyone filled the order using an rABC (a=1731.80 at 7:00 p.m. on the hourly chart) or a camo set-up, please let me know so that I can establish a tracking position. It could have produced a profit so far of as much as $8,600 on four lots.
The 250.35 rally target we used last week is still in play, but I can offer no guidance in advance of Monday morning's opening that is guaranteed to survive further weakness overnight. I've proffered a 'mechanical' buy at the green line for the E-Mini S&Ps, but this vehicle would trigger a comparable signal at the red line, p=228.77, stop 221.57. Check in after the bell, since the opportunity may be developing in a way we can exploit using call options. ______ UPDATE (Apr 13, 10:12 p.m. EDT): Once again, DIA is poised to trigger a red-line buy at p=228.27, and once again I cannot recommend it until I've seen how stocks open Tuesday morning. _______ UPDATE (Apr 14, 6:40 p.m. EDT): DIA opened on a gap higher, negating the easy 'mechanical' entry we'd sought at the red line. This helium balloon is still going to 250.35, but any shot we have of climbing aboard before it gets there will have to come from an intraday set-up. Plan on shorting at 250.35 in any case, using puts priced under $1 that have a week or so left on them. The trade should not be initiated until such time as DIA trades within 0.07 points of the target. ______ UPDATE (Apr 23, 9:15 p.m.): This space for rent! _______ UPDATE (Apr 27, 9:05 p.m.): Using a 24-hour chart, I've changed the point 'B' high slightly to come up with a new target at 250.43. My trading strategy can stand as given above. _______ UPDATE (Apr 28, 9:22 p.m.): A plunge to 228.36 would trigger a 'mechanical' buy signal, stop 221.00. Please note that the 250.43 rally target is still viable.
The futures have opened weak Sunday night, but it feels like DaBoyz are maneuvering stocks lower in order to buy 'em. We should join them if the June contract falls to the green line (2696), since that would trigger an appealing 'mechanical' buy signal. The trade is recommended only to those who know how to reduce the theoretical entry risk, which amounts to about $3800 per contract on a 2620 stop-loss, to $400 or less. This can be done with a 'camouflage' set-up or an rABC pattern. If the opportunity gels during the regular session, tune to the Trading Room for potential real-time guidance. ______ UPDATE (Apr 13, 10:25 p.m. EDT): The futures dipped no lower than 2711.00, stranding our niggardly bid. The 2921.75 target shown in the chart remains viable as a minimum upside objective for the near term.
My forecast zigged and DIA zagged. Oh well. Now DIA is about to probe the 228.77 midpoint resistance shown in the chart. An easy move through it should be taken as a sign that more upside to at least p2=239.56 remains. The outlandish D target at 250.35 would somewhat exceed a corresponding target at 2881 that I've proffered for the E-Mini S&Ps, but we'll trade each as though the other did not exist. If both vehicles were to reach their respective D targets, it would be as though there had been no bear market at all, just a garden-variety 15% correction. Considering what caused the stock market to collapse in the first place, and the fact that a deep recession is coming under the best of circumstances, the rally would be the most powerful -- and ridiculous -- short-squeeze in history. That, of course, is the purpose of short-squeezes -- in this case to persuade investors that they should never have doubted the advice of the shills and idiots who have been telling them to sit tight. It is predictable that the next leg down will be even more history-making than this psychotic rally. _______ UPDATE (Apr 7, 9:25 p.m.): If DIA falls to the green line (217.97), it would trigger a 'mechanical' buy signal. Stay tuned to the chat room if you're keen on trading this one. ______ UPDATE (Apr 8, 9:18 p.m.): DIA came nowhere near our niggardly 217.97 bid when it dipped slightly in the first hour. A minimum 250.35 is still where it's headed, but we'll have to keep looking for opportunities to get aboard. The next potential stumbling block is 239.56, the secondary Hidden Pivot.
Like every other trader who listened to the news over the weekend, I was very bearish when I came to my desk Monday morning, and that is exactly why the short-squeeze was so powerful. To determine where it was headed, I looked at charts in various time frames and came up with an implausibly bullish target at 2783.50 that is shown in the inset. I warned subscribers to get out of the way and did so myself, since the chart implied the upthrust still had another 187 points to go. By day's end that had been reduced to 115 points, and I have little doubt 2783.50 will be reached. If it is decisively exceeded, please note that the rally could go all the way to 2881.00. That Hidden Pivot resistance is derived from the higher corrective coordinates that I've labeled B2/C2. We'll trade with a bullish bias for now, but also look for shorting opportunities at the various HP levels. One more note: The secondary pivot (p2) of the bigger pattern lies at 2652.00, which has been penetrated only slightly so far and was giving buyers a little pushback Monday evening. _______ UPDATE (Apr 7, 9:29 p.m. EDT): The reversal from an early-morning high 33 points shy of the 2783 target warrants caution. Bulls got ahead of themselves, but it remains to be seen how badly Mr. Market will punish them for their brash enthusiasm as the day began. A pullback to the green line (2497) would trip a so-so 'mechanical' buy, but I'm not recommending taking action at the moment. _______ UPDATE (Apr 8, 9:25 p.m.): Up, up and away! I am holding to the 2783.50 target flagged above, or if the futures penetrate it decisively, to another at 2881.00. The lower number should be short-able, but I am
The bounce from the March 23 low has recovered a third of the initial, 1196-point drop, but it failed at last week's peak to trigger a theoretical buy signal at 2572 by 10 points. That wouldn't turn me bullish if it happens, since I expect the broad averages to fall to 1500 or lower on the next leg down. However, it would bring a neutral-to-slightly bullish bias to my swing- and day-trades. The futures in the meantime could fluctuate over a 600-point range (!) without saying much. That is the distance between the 2174 bottom and the midway point between the green-line trigger line and the midpoint Hidden Pivot resistance at 2971. This level is instinctual with me and unrelated to any rules we use to trade or forecast. More immediately, a midpoint support at 2374.13 that I flagged last week is still my minimum downside target for the near term. Here's a chart that shows it.
DIA spent most of last week avoiding what I still regard as a very likely fall to at least 200.92. This midpoint Hidden Pivot support is nicely located to set up a enticing 'mechanical' buy, although I've already warned that call options may prove too pricey to yield the kind of edge we need to do the trade. Still, with DIA priced above $200 per share, we'll need to find a way so that subscribers with relatively small trading accounts can participate. In practice, this will probably mean buying the nearest strike with soon-to-expire options offered for under $1.00, and bidding the options only when DIA has gotten with a dime of the target.
The 1679.20 rally target we used last week is still very much in play, but it will take a decisive thrust past it to imply buyers have the moxie to reach D=1782.30. A two-day close above the lower number would significantly shorten the odds of a move to at least p2=1730.70, but an intraday spike to around 1700 would be equally encouraging. That could conceivably set up a 'mechanical' buying opportunity on a pullback to x=1637 (the green line), so keep that in mind if the futures fall hard enough to make your stomach churn after rallying over the next day or two. _______ UPDATE (April 6, 8:38 p.m. EDT): Buyers have pushed the futures decisively past the 1730 secondary pivot this evening, implying they'll have little trouble reaching the 1782.30 target flagged above. Once past it, the June contract should be presumed bound for the 1857.90 Hidden Pivot shown in this chart. This target is equivalent to one at 1852.00 that I projected for the April contract two weeks ago, when gold was $150 lower. _______ UPDATE (Apr 7, 9:40 p.m.) Buyers actually did have trouble when Monday night's running start reversed and turned into a rout. The 1782.30 target remains viable nonetheless, but we'll need to monitor June Gold's ups and downs closely to find a safe spot for re-entry.
AAPL looks like it will need to go lower for a running start to help Buffett and DaBoyz trigger off the next short-squeeze. If so, the 228.11 midpoint support shown in the chart will be an opportunity to try bottom-fishing. The pattern is too gnarly to attract the attention of the rabble, and the red-line support is nicely in the middle of nowhere. Accordingly, we'll look to buy Apr 9 calls for under 1.00 if the stock gets within 0.15 of the target. This may require going as high as the 250 or 252.5 strike. Keep in mind that the calls will expire Thursday because markets will be closed on Good Friday. ______UPDATE (Apr 6, 9:37 p.m. EDT): Well, we knew all along that Buffett and DaBoyz weren't going to get hosed just because they own hundreds of billions of dollars' worth Apple and iPhone sales are headed for disaster. The way they fist-pumped the stock today through the 259.68 midpoint Hidden Pivot shown in this chart, there can be absolutely no doubt it is going to at least 282.45. I am still predicting a plunge to well below $100 before this bear market is over, but Apple shares are going to 282.45 first. _______ UPDATE (Apr 14, 8:04 a.m.): The stock has traded as high as 279.70 overnight, coming within 1% of the well-advertised target. When it reaches 282.45, AAPL will have rallied by exactly a third from the March 23 low of 212.61 and will lie just 13.8% from its all-time high, on Jan 28, of 327.90. An opportune place, by my runes, for the Masters of the Universe to take the money and run. Please note that I've used a one-off 'A' to project the target, but if it's exceeded by more than 0.15-0.20, that would announce more
Because DIA opened on a gap below the green line (see inset), it is very likely to continue falling to at least 200.92, the midpoint Hidden Pivot support shown in the chart. Ordinarily I would suggest bottom-fishing there using call options, and would encourage Rick's Picks newbies to join in the fun, especially if, like most who have tried their hand at options, you've never cashed a winning ticket. Options premiums are so ridiculously juicy, however, and bid/asked spreads so wide, that we may have to sit this one out. Stay tuned to the chat room in any case, since opportunity may come unexpectedly. ______ UPDATE (Apr 2, 11:15 p.m. EDT): The subdued short-squeeze in the final hour did not change my outlook, although you should not do the trade if 200.92 is hit in the final hour. It would take a rally exceeding 225.87 to negate the bearish target.
