The futures are topping here, since D=5220.00 is too compelling a Hidden Pivot resistance to simply give way. The fact that the topping process has entered its third, tedious week is evidence not of the bull's tenacity, but rather of the herd's discovery of "our" pattern and target. Even with the sketchy filigree that characterizes the A-B leg, the pattern is still far from gnarly, and therefore overexposed. We can short the futures or use SPY options to leverage the impending plunge, so stay tuned to the chat room and let your interest be known if you care. _______ UPDATE (Mar 18, 4:21 p.m.): The so-far high of what I still believe to be a topping process was 5257, recorded on March 8. However, stocks look primed for an explosive leap on whatever Fed 'news' comes tomorrow, regardless of whether the pronouncement is ostensibly bullish or bearish. I'll be interested to see what the usual dirtbags and scoundrels make of this opportunity, but we shouldn't be surprised if they are able to goose the futures 50-80 points above our 5220 target. _______ UPDATE (Mar 21, 9:04 a.m.): Based on the way buyers impaled p=5276, this short-squeeze blowoff will hit a minimum 5396.25, the Hidden Pivot target of the pattern shown. Any long entered at a lower price will make money, and the pattern is gnarly enough to imply that a short at the target will work, too.
Even though last week's extension of bull-mania exceeded the 5220.00 target shown by only a smidgen, it's still creepy. The 'hidden' resistance should have held, if for no other reason than that the pattern is too gnarly to be common knowledge. Granted, the point 'B' high is pork sausage, as noted here last week. But that's still not a good reason for its target to have been exceeded so easily. The rally did reverse to produce a close beneath the target, so it's still possible we'll see rationality reassert itself in the week ahead with a persuasive plunge. Unfortunately, SPY failed by two points to achieve a corresponding target at 520.54 before the sell-off began, so we took no short position with puts. _______ UPDATE (March 13, 11:03 a.m. EDT): The minor rally pattern shown has already produced two 'mechanical' winners while becoming increasingly gnarly, so expect it to produce a third profitable trade: shorting D=5287.25 when the futures get there. A small reverse pattern should be suitable for this purpose, but be sure to take a small partial profit if it works. You could also buy a pullback to p2=5204.00 'mechanically,' stop 5176.25.
The bullish stampede stalled briefly at the 4287.75 target signaled in early May, but the close above signaled more upside over the near term to at least 4331.50, a Hidden Pivot resistance shown in the chart that has been more than two months in coming. There are some additional point 'A' lows that could be used to project an even higher target, but I have not used them because the 'B' high did not exceed any prior peaks. That doesn't necessarily mean the futures can't surpass 4331.50, only that a target above cannot be considered precisely reliable. Please note that a swoon touching either the red or green line, however unlikely, would generate an appealing 'mechanical' buy. ______ UPDATE (Jun 5, 6:43 p.m.): The S&Ps sympathetically weakened when AAPL plunged today, but this seemed scant reason for concern. It happened because too many amateur traders were expecting the long-awaited unveiling of Apple's ridiculously overpriced VR goggles to send the stock soaring. It did, albeit briefly and with help from the usual short-covering panic overnight. However, the subsequent dive was merely classic 'buy-the-rumor-sell-the-news' price action, probably signifying nothing. We'll monitor AAPL closely nonetheless, since the selloff began from a high just nine cents from the 184.86 rally target I'd drum-rolled in the AAPL tout just above. _______ UPDATE (Jun 8, 4:54 p.m.): The trendline shown in this weekly chart has been breached only slightly, but it should not have been breached at all if the rally were about to reverse. The line is authoritative because the two peaks it connects came ahead of precipitous selloffs. If the futures close above the line on Friday or trade decisively above it, that would be yet another warning to bears against fighting the rally aggressively.
Last Wednesday's textbook 'mechanical' buy at x=4120.00 left little doubt where the June contract is headed next. The 'D' target at 4288.75 seems all but certain to be hit early in this four-day week. If it pushes past the Hidden Pivot resistance by more than a couple of points on the first try, you may confidently assume that a new target at 4332.75 is in play. It is derived from the somewhat lower 'A' at 3937.00 recorded on March 24. _______ UPDATE (Jun 2, 9:25 a.m. EDT): The Hidden Pivot target at 4287.75 (a slight correction) still appears certain to be reached. The small delay relative to my forecast occurred because -- manifestly -- too many traders were bullish when the week began. You will have noticed that whatever factors that gave us good reason to be quite bearish are not exactly weighing on the stock market's walnut-size brain at the moment. When DaBoyz fist-pump ES obliviously past 4287.75, you can infer that 4331.50 is the next stop, a slight adjustment from the number given above.
I've displayed a weekly chart because it makes the turgid price action of the last several weeks seem not so much depressing as tedious. Nasty, gratuitous swoons in a bull market that has yet to attract an institutional following are inevitable, but we should always keep in mind that bears do not have the power or the moxie to sustain damage. The June contract could come all the way down to x=1816.60, in fact, and still look fine. That would trigger a succulent 'mechanical' buy, even through the implied $128 fall from here would likely ratchet up despair amongst gold's fair-weather supporters.
The futures ended the week a hair shy of the 4244.00 'internal peak' recorded on February 3. Hold the applause if buyers should surpass it this week, however, since the 4382.75 peak from August 19 is the one that matters. A rally exceeding it would generate a bullish impulse leg of weekly-chart degree, putting in jeopardy the hopes and dreams of those who think an old-fashioned economic depression would be just the thing to asphyxiate the trivial concerns of wokeness, tame rampant paganism in America, rebuke a hopelessly corrupt political system and provide a reality check for an economic system that runs on debt and helium. Stay tuned to the Trading Room for white-hot trading tips while we're waiting. _____ UPDATE (May 24, 8:54 p.m.): The 'white-hot tip' mentioned above popped up serendipitously during this morning's tutorial session for advanced Pivoteers. It helped us fine-tune a textbook 'mechanical' buy after the futures finished mau-mauing bulls with what we will assume for now was a gratuitous dive. The rally target is the 4287.75 D pivot of this pattern, but we'll sit back for now and let bulls prove their case. ______ UPDATE (May 25, 9:59 a.m.): The selloff that has caused last night's short-squeeze to detumesce is not going anywhere, since the peak of the overnight rally exceeded yesterday's high by two ticks. That makes it impulsive, so expect a rebound. Also, I have corrected the chart accompanying the previous update.
June Gold would become a tempting 'mechanical' buy on a pullback to the green line (x=1816.60). Failing that, we might expect the futures to continue to jack bulls and bears alike with the kind of skittishness that makes trading such a challenge. For all the histrionics we endured last week, settlement was little changed from the week before. Other than an uncompelling voodoo number around 1930, there is not much to recommend for trading purposes as the new week begins.
Let's not waste too much time pondering what this sad sack of tailings is going to do next, since it hasn't done much of anything for more than a month. That's if you don't count the meaningless spasms that occur whenever the latest drivel from the Fed hits the tape. The futures will always be tradeable, of course, but only with the kind of close attention that's hard to muster with America in pre-holiday mode ahead of a three-day Memorial Day weekend that is just two weeks off. The work ethic, and all. I'll mention in passing that the June contract has triggered two profitable 'mechanical' shorts since the bear rally began in October, each producing a $12,000 win per contract. Considering the amount of time traders spent screwing the pooch in the process, that worked out to around $3.57 per hour. If ES falls anew to the red line, however, racking up a third 'mechanical' winner, I'll shift my focus to the 3424.50 downside target of the big pattern, shown here.
I've used a pattern similar to the one in Silver to show that both are in a precarious place, poised to fall at least 2% if their respective midpoint Hidden Pivot supports are decisively breached. So far, the pivots have held, but we'll need to monitor price action closely this week. Like July Silver, June Gold is a spec buy at the moment, presumably using a reverse-pattern trigger on a chart of small degree. Doing so on the daily chart would risk a little more than $1000 per contract initially, far more than the $150 or so we should be willing to part with. _______ UPDATE (May 16, 5:22 p.m.): June Gold has fallen into the bog of weak consolidation that occurred in the last two weeks of April. The most bulls should hope for is that the futures rebound sharply after maliciously dipping beneath the bog's low point, 1980.90 on April 19. Here's the chart.
Yes, it's a bull market, but not one that has been much fun. My current rally target is 2138.30, just 134 points above Friday's settlement price. Riding this bee-stung Brahma became particularly unpleasant last week when a vicious spike up to 2085 on Wednesday reversed precipitously to finish the week just slightly above where it began. For the record, the dive on Friday triggered a 'mechanical' buy at the green line (x=2020.30), stop 1980. The usual caveats apply. ______ UPDATE (May 12): The 'mechanical' trade was worth as much as $3,600 per contract, although it generated little buzz in the chat room. The 2138,30 rally target remains viable.
