The futures were not supposed to blow past a target as clear and compelling as the one at 4950.00 shown in the chart. Yes, the pattern is too obvious to work precisely. But still. Regardless, we must now infer not only that at least somewhat higher prices impend, but that the ballyhooed one at 430.58 in MSFT may not show the stopping power I've given you to expect. Either that, or the 5059.75 target of the more expansive pattern shown here is in play. It will not work precisely because this is a continuous chart, but the target should be good enough for government work, meaning we can improvise a short up there if necessary, about 10-15 point higher on the March contract.
The criminally engineered, $8 shakedown on the opening bell Friday missed my 176.93 target by a hair, setting up a possible short-term bottom. If so, AAPL looks like it will ripen for 'mechanically' shorting at the green line (x=191.04), even if a subsequent relapse only delivers a one-level profit. In retrospect, my decision to switch to MSFT as our one-size-fits-all bellwether appears to have been sound. The stock has clearly lost its mojo, even if it still moves with the heft of a blue whale.
TLT's nasty plunge on Friday created an ostensibly bearish island-gap reversal, but my hunch is that it will shrug it off. The pattern shown offers the possibility of a high-odds mechanical buy at the green line (x=94.86). That implies that after it touches x=94.86, it will rally to at least p=96.61 without dropping below C=93.11. I may put out guidance for trading this one, so stay tuned to the chat room and your email 'Notifications' if you want to stay apprised. _______ UPDATE (Feb 11): TLT took a weak bounce from the green line, turning what had looked like an appealing 'mechanical' buying opportunity into dross. The trade, which I did not advise, has yet to be stopped out, but that's what it might take to lighten the load sufficiently for a decent rally. The buy trigger off the new low beneath 93.10 would be 1.15 points. or 0.13 points if you want to risk getting too frazzled to squeeze off the shot. Here's the chart.
For the deepest, most liquid trading vehicle on earth, the dollar has been getting precious little respect. The chart shows how it has been buffeted around, getting sand kicked in its face by the BRICs, Davos, Iran and who-know-who else. All that aside, the pattern shown has sufficient clarity to tell use whether DXY will remain a 98-pound weakling for yet a while longer, or instead embark on a recovery tour to the 108.38 target of this pattern. If so, a crucial test awaits at 104.50, which is a double resistance, the respective p and D Hidden Pivots of the two charts featured in this tout. _______ UPDATE (Feb 6, 1:05 p.m.): Rallies yesterday and today created two peaks that exceeded the double Hidden Pivot resistance by just a dime. My hunch is that the overshoot, tiny as it was, will suffice to keep the uptrend alive. However, we'll need to see how strong the minor abcd corrective patterns are before we can judge more confidently whether a significant rally is under way. Whatever the case, it would become a 'mechanical' buy on a pullback to x=102.56.
Gold is technically in a bullish phase, having completed a correction down to the 201.40 target of the reverse pattern shown. The initial move off the low was sufficiently robust to affirm the bullish picture. However, price action since has been feeble, presumably because the steep, month-long rally from October's 1861 low needs more time to consolidate before the futures embark on another powerful run-up. We can only bide our time while bullion dithers, since trading the relatively small oscillations is hard work. I will signal nonetheless if an exceptional opportunity (i.e., a potentially important low) should develop.
Last week's rally to the green line (x=23.15) generated an enticing signal to get 'mechanically' short, but it went unanswered because silver hasn't exactly been a hot discussion topic in the chat rooms. 'Spartacus' offered a link to an ostensibly bullish chart, but only tentatively so. The chart shown in the inset had more immediate consequences, but it remains to be seen whether the so-far one-level move finds its way down to the 'D' target at 21.45. I doubt it, but a further fall to at least p2=22.02 is neither illogical nor unlikely.
The reverse pattern shown nailed the recent top nicely, although it did not furnish the information that might have explained crude's latest conniption. Now I'm hearing that last week's plunge was discounting a 'peace' settlement between U.S./Europe and Israel's most murderous enemies. Netanyahu is too polite to tell those who hatched this suicide pact without respecting his or Israel's existential needs to shove it up their ass, but he will surely ignore it. If this is indeed what is driving oil at the moment, we'll tune it out until price action returns to its wonted, psychotic state. _______ UPDATE (Feb 11): $80/barrel has been pivotal to crude's swings since last August and is still the number to beat. The pattern shown projects slightly above it and would give bulls more credibility if the 80.08 target is exceeded, especially on a closing basis.
GDXJ has settled into a tiresome dirge comparable to gold's and looks vulnerable to a further fall to as low as D=31.62. First it will need to test the midpoint support at 33.44, which, because it closely coincides with some lows recorded in January, will take discernment to leverage. My suggestion is to use a 37-cent trigger interval to set up a 'buy' with equal potential. As always, a decisive penetration of p=33.44 would portend more slippage to p2=32.53, at least.
Here are a couple of headlines concerning the economy that appeared atop Bloomberg's front page on the same day last week. Taken together, they could make one's head spin. First the happy news: IMF Lifts World GDP Outlook on U.S. Strength. But here's the article just beneath: UPS to Cut 12,000 Jobs. A case of schizophrenia on the copy desk -- or were they just trying to be provocative? Since no mainstream news outlet save USA Today out-cheerleads the economy (and crime-infested Gotham) more obnoxiously than Bloomberg, we can assume that the UPS layoffs were simply too important to bury on an inside page. The company is one of America's biggest employers, and its ubiquitous delivery trucks are a visual bellwether for the economy -- so much so that it would not exaggerate to say, "As UPS goes, so goes the nation." Amazon has been laying off as well, but it is predictable that both stories will ultimately get less ink than Facebook's whoopee-cushion leap Thursday triggered by an earnings beat and some other smiley-face 'surprises' from Zuckerberg. The glorified advertising firm's shares tacked on an instant $66 after the close, adding a reported $200 billion to the global ledger and $50 billion to Zuckerberg's s piggy bank. We've discussed these wild but frequent effusions before, and how they contribute enormous sums to the 'wealth effect' without altering the economy in any real or constructive way. Sure, a few of the big winners will reward themselves for all their hard work by buying ocean-going yachts and Lamborghinis in crazy colors. But most of the money will get plowed right back into the market, the better to pump still more gaseous wealth into a handful of stocks held unto death by portfolio managers. A Dollar Krakatoa Actually, even hydrogen has more
The rally off the last low, 82.42, has been so unimpressive that we must consider the possibility of more downside to at least p=78.05 as the most likely scenario for the winter months. TLT would be a screaming buy at that price, although without any guarantees of a rip-roaring rally capable of surpassing the December 2022 peak at 109.68. Not coincidentally, the chart of TYX, which tracks interest rates on the long bond, has signaled a 'mechanical' buy for a move to as high as 6.16% (!). That number seems unreal, since the economy, along with the banking system, would almost surely collapse long before rates got that high. Or would they? In any event, the buy signal is about as 'textbook' as they get, so we'll need to take it seriously even if we can't understand it.
