The 22.01 downside target I flagged at the beginning of the week worked beautifully, enabling bottom-fishing less than two cents off the intraday (and weeky) low. It occurred on Friday at 22.03 and gave way to a strong bounce that could have produced a quick profit of as much as $10,000 on four contracts. No one reported doing the trade, however, so I provided no further guidance. The extent of the bounce is unpredictable at this time, but because it has come from a Hidden Pivot target that took more than three months to reach, we might expect it to continue untroubled for at least another 4-7 days if not significantly longer.
I've used a composite chart for the now-defunct December contract to project a rally target at 166^27. Its equivalent, basis the March, would be around 165^10. I've also used a 'reverse ABC' pattern for this projection because it yields a lower target than one where 'A' is lower than 'C'. My reason for being cautious is that the impulse leg of the pattern did not exceed any distinctive prior peaks. It is properly impulsive and therefore bullish, but not impressively powerful. Although my long-term outlook is bullish, I'll be tempted to try shorting for a scalp near 165^10. Stay tuned to the chat room if you care.
The pattern shown is nutty, but not so nutty that it won't work for getting long 'mechanically' if you choose, or even getting short at D=98.00. I've used it because the more obvious pattern occupying the last four weeks is a little too obvious to be 'our little secret'. A run-up to 98 is going to create more problems for a bull market that is already years overdue for a devastating correction. It will make overseas profits earned by U.S. multinationals shrink, but it will also tighten the deflationary noose around everyone who owes dollars. This will come as a rude surprise, and ultimately a profound shock, to those who make financial decisions based on what they learn from CNBC, CNN, The Economist, Bloomberg, and the New York POS Times. Rick's Picks readers might not be spared from the ravages of the coming Second Great Depression, but at least they will have seen it coming.
Mr. Market blew a great opportunity on Friday to scare the hell out of everyone, concluding the session with a mild short-squeeze rather than the devastating rout that Wall Street's years-long wilding spree so urgently needs. The continuing ascent of Apple shares as always remains key to the global illusion of prosperity and the surreal expectations of portfolio managers; and that is why, as last week’s commentary pointed out, the stock is not about to go quietly into the night. It struggled nonetheless last week to make headway toward a 187.93 target after peaking on Wednesday at a record-high 170.20. AAPL subsequently sold off hard for all of about ten hours, then limped to the finish line to end the week in a way that could have satisfied neither bulls nor bears. The rally target, a very major one, remains viable, but we’ll need to monitor AAPL's progress toward it closely, since fears of Omicron, the latest supposed Covid variant, are threatening to strangle the global consumer economy yet again. When the week ended, Fauci and his benighted lackeys in the news media seemed eager, if not to say desperate, for someone to die, or at least be hospitalized for a few days, lest an opportunity be missed to roll out another booster shot and to stoke the public's antipathy toward the unvaccinated to new extremes. Alas, press releases from health officials in South Africa, Omicron’s apparent ground zero, only served to mitigate concerns that the variant might be the devastating killer that so many politicians and bureaucrats must be hoping for. Stocks Are Topping Meanwhile, with Western Civilization in mid-stage collapse, the stock market continues to feel like it’s in a sympathetic topping process. However, it takes a little imagination to concoct a scenario in which the practically unlimited
Mr. Market blew a great chance to scare the hell out of everyone on Friday, ending the session with a mild short-squeeze rather than the rout that stocks so desperately need. AAPL as always remains key to the global illusion of prosperity and the lofty aspirations of pension fund managers, and that is why, as last week’s commentary suggested, it is not about to go quietly into the night. The stock struggled nonetheless last week to make headway toward a 187.93 target after peaking on Wednesday at a record-high 170.20. It subsequently sold off hard for all of about ten hours, then muddled to the finish line in a way that could have satisfied neither bull nor bear. The rally target, a very major one, remains viable, but we’ll need to monitor the stock closely in case omicron fears threaten to kayo the consumer economy yet again. When the week ended, Fauci and his lackeys in the news media seemed eager, if not to say desperate, for someone to die, or at least be hospitalized for a few days, lest an opportunity be missed to roll out the booster-shot-of-the-month. Alas, press releases from South Africa, omicron’s ground zero, only served to mitigate fears that the latest Covid variant, if it is one, could be the devastating killer that so many politicians and bureaucrats are hoping for. For its part, the stock market continues to feel like it’s in a topping process. However, it takes a little imagination to concoct a scenario in which the practically unlimited quantities of ginned-up money that have powered the bull market could dry up. Consider that companies with tens of billions of real dollars of surplus cash go out and borrow funny money because, apparently, they want to save the good stuff for…exactly what? Certainly
The pattern shown, with a 49,360 downside target that looks very likely to be reached, is gnarly enough that we won't be competing with the world if we use it to trade. That would imply bottom-fishing at 49,360 with a tight stop-loss or a frugal 'camo' set-up; or, getting short on rally to x=57,377. Other trades going in either direction are possible if you zoom in on the last dozen or so bars, which manifest not one, but two tidy impulse legs. The 89,780 bull-market target is unchanged although of little concern at the moment. ______ UPDATE (Dec 5, 11:02 a.m.): Bertie is getting thwomped Sunday morning after opening on a gap down to a so-far low of 48,000. The pattern shown in the chart has room for one more target at 46,945, so let's see how it goes. An easy breach of that number would not be an encouraging sign.
The institutional apes are in this stock up to their eyeballs -- with YOUR hard-earned savings! -- so don't expect it to go quietly into the night. In fact, AAPL would become a fetching 'mechanical' buy on a pullback to p=155.34, stop 149.65, and even moreso at x=146.80. That's no guarantee it will hit D=172.40 the next time its handlers goose it knowingly, but it does imply that if a bear market has commenced, it's not likely to provide an easy path to riches for permabears. That's not about to happen as long as AAPL, the most institutionally over-owned stock ever, has the worshipful support of Big Money. ________ UPDATE (Nov 29, 6:45 p.m. ET): Friday's low got within 46 cents of the red line, close enough to set up the 'fetching' mechanical trade I'd suggested above. I won't track it, however, unless I hear from at least two subscribers who got aboard. Don't wait for me if you're in, though, since the so-far $500 gain per round lot warrants partial profit-taking. _______ UPDATE (Nov 30,6:02 p.m.): On Wall Street, nothing succeeds like excess, and it was force-fed into AAPL today with the efficiency of a hydraulic piston. To underscore the point that they are completely in charge even when the broad averages are plummeting, DaBoyz levitated the world's biggest-cap stock by more than 3%, closing it on the high of the day. Shorts left bruised and bleeding supplied yet more buoyancy after the close, pushing the stock still higher into effectively zero supply. It's a quite clever trick, preventing a bear market from happening merely by targeting a single stock. That's how the game is played, and although it will ultimately prove to be a losing strategy, we shouldn't underestimate how long the Street's criminal masterminds can sustain the
Elsewhere on the page, I've compared Friday's dramatic plunge to Japan's sneak attack on Pearl Harbor. Thanksgiving Friday was supposed to be a quiet day on Wall Street, but it looked more like the possible start of the bear market we've long expected. The selloff generated a powerful impulse leg on the daily chart, although it did no damage whatsoever to the weekly. We'll keep that in mind lest permabear hubris dull our judgment in the weeks ahead. It would not be unusual for a major trend change to occur after the trend has fallen shy of an important Hidden Pivot target. The current trend failure occurred at 4740, a not insignificant 20 points below a 4760 target we'd culled from a pattern tracing back to 2009. There needn't be any guesswork, however; we'll know what's on Mr. Market's mind by paying close attention to corrective patterns on the hourly chart. If they start exceeding their D targets routinely, that would add to the evidence that a major bear has commenced. The same goes for retracement rallies that fail to reach their 'd' targets, particularly if they sputter out at the p 'midpoint' resistance. On the hourly chart, here's a good place to start, since it shows Friday's close to have occurred bearishly beneath p=4583. ______ UPDATE (Nov 30, 5:40 p.m.): Omicron is not what is causing stocks to fall, although a nascent bear market might be. If so, expect more carnage, but then a lulu-of-a-bear rally to suck everyone in and exhaust short-covering. The ostensible reason for the rally will be the debunking of Omicron's supposed threat to humanity. This 'variant' and any vaccine said to cure it are a bad joke, actually, and most of us have grown much too tired of Fauci hokum to believe it, let
The short-term picture would darken if sellers take out the minor 'D' target at 49,360 shown in the chart. However, scalpers can bottom-fish there nonetheless with a very tight stop loss, or get short at the green line 'mechanically' if you know how to control the risk. A bigger chart suggests that Bertie would become a very appealing 'mechanical' buy if sellers drive it all the way down to the green line at 44,063. Regardless, our ball market target at 89,780 will remain viable as long as 28,824 is not exceeded to the downside. ______ UPDATE (Nov 30, 6:07 p.m.): Bertie swam against the tide with a modest gain. It was boasting that it knows something that those who were dumping stocks don't. In this market, you have to trust seeming reckless speculation more than cold logic, so there's your answer.
The 'not exactly bearish' T-Bond chart featured in last week's commentary was intended to make the point that the usual eggheads, pundits and nearly all forecasters have had bonds figured wrong for quite some time. They should be even more embarrassed and mystified by Friday's spectacular rally, which made the daily chart look still less bearish (while paying off pass-line bettors with a quick, 'mechanically' earned $11,000). The same yo-yos have attempted to cover their tracks with talk about how bonds are moving higher because of a global 'flight to safety'. But where, we should ask, was such talk back in November, when a steep rise in bond prices drew only skepticism from inflationistas? Looking ahead, the 168^15 rally target has been in play theoretically since mid-October, although the difficulties of overcoming p=162^25 have made the attainment of D any time soon less than certain. Whatever happens, the unwinding of overly enthusiastic bets on inflation will continue to lend buoyancy to Treasurys, presumably until a bear market in stocks creates a true flight to the safety of U.S. bonds. _______ UPDATE (Dec 1, 6:44 p.m. ET): The March contract is headed toward a short-term top at 163^30. Short aggressively there if you've been long for the ride up. Here's the chart.
