‘Guise’

The thieves who manipulate this behemoth for a living partied hard in the final moments of Friday’s session, goosing MSFT $7 just ahead of the bell. Usually it is in the opening minutes of the day that we see them diligently at work, stealing hubcaps in full view of SEC regulators. Wall Street loves these guys, since they have been responsible for creating untold trillions of dollars’ worth of vaporous ‘wealth’ since the bull market began in 2009. Friday’s criminally inspired spike was relatively modest, worth approximately $7 billion to portfolios that hold Microsoft shares.

The irony is that the sleazeballs who purport to control this stock, among others, are themselves the unwitting slaves of mysterious technical forces they will never completely understand. The chart shows exactly how this works, with Hidden Pivot levels that can be used to gain a profitable edge over the riff-raff and algos. They already enabled us to get long just a hair off the September 5 low at 492.37.  More recently, the stall at 519.75, the pattern’s midpoint Hidden Pivot resistance, could have been shorted on Friday, but for the fact that it occurred on a vicious upthrust with just a few minutes remaining in the session. But there are still several potential trades that can be milked from the pattern, including a ‘mechanical’ buy on a pullback to the green line, and two potential shorts in places that Rick’s Picks subscribers will recognize. Trading should be fun — and what could be more fun than going up against machines incapable of distinguishing a chickpea from a garbanzo.  (The difference, says comedian Will Durst, is that a guy would never pay $200 to have a garbanzo sit on his chest.)

This ETF proxy for the Long Bond has generated its first impulse leg since August with a pop above two prior peaks on the weekly chart. The move is not nearly as strong, and it is no reason to break out the bubbly, but it implies the rally cycle begun from 83.30 in May will achieve a minimum 92.91.  That is an important midpoint Hidden Pivot resistance associated with a big-picture rally target at 102.52. The target comes from a pattern on the weekly chart begun from 82.42 in October 2023. As always, a decisive penetration of ‘p’ on first contact would shorten the odds of a continuation to as high as ‘D’ , but to least p2 (97.82 in this case).

GDXJ has shredded its way past all lesser targets, leaving just one more, major, Hidden Pivot resistance at 93.89 that comes from the weekly chart and beckons a test. Judging from the ease with which buyers penetrated the midpoint resistance at 78.90, the target is all but certain to be reached. It is nearly as likely to produce a precise reaction, meaning you should consider covered writes if you hold a long-term position.  I advised doing so at a lesser target not far below, but there was relatively little resistance. This time it is likely to be different, but if GDXJ melts through the resistance anyway, I’ll need to rummage through my bag of technical tricks to come up with a new target, since the one at 93.89 is the highest I can produce with conventional tools. In most cases, this entails extrapolating an ‘extension’ target from the intraday charts. This tactic will yield Hidden Pivots that should be expected to show shortable stopping power, but it is not a reliable means for predicting a major top.