Last week's hard selling brought the futures down to the green line, signaling a moderately appealing 'mechanical' buy. The elongated b-c leg sapped some of the bullish energy from this pattern, and so we'll paper-trade this one to see how much moxie bulls have left. A gratuitous poke beneath c=5559.75 can be used to set up a 'counterintuitive' entry trigger of 46.50 points. That's too wide to be practical, so I'll suggest executing the trade with a 'camo' pattern taken from the 15-minute chart or less. I am giving the bull the benefit of the doubt because sellers missed an opportunity on Friday to generate a headline decline.
Microsoft sat poised on a high ledge when the dust settled on Friday. Although the visually unavoidable plunge the chart displays so well could wait for a few weeks or longer, it's highly unlikely the stock's institutional sponsors will be able to hoist it to the $420 midpoint of the supply zone, never mind to new record highs. The alternative is a wealth-destroying slide into the low $300s that should bring a bounty of opportunity for the nimble, since it will be reflexively punctuated by rallies designed to keep hope alive until a bottom is reached.
Gold's steep rally has left doubters on the sidelines since January, a high price to pay for hesitating. The rally looks bound most immediately for 3198.70, a presumptive weigh station en route to the 3533.90 target of a larger pattern noted here earlier. That number is associated with a 'midpoint Hidden Pivot' at 3037 that should slow bulls down for a while, perhaps 2-3 weeks. If not, and the April futures forge intrepidly higher, it would shorten the odds of a run-up to 3553.90. An additional 'hidden' resistance you should prepare for lies at 3285.80. It can be shorted with a 'camo' trigger fashioned from the 15-minute chart.
Covering the remaining distance to the 27.305 target looks like it'll be a piece of cake. The pattern has yet to give a false signal, and any trade attempted with x, p or p2 as a reference point would have been profitable. The last juicy buying opportunity occurred on the pullback to the green line (x=31.380), about as 'textbook as mechanical trades get. Your trading bias should be bullish until 37.305 is hit, but be prepared for a stall there and a pullback, probably tradable.
Because this symbol is overdue for a correction, I've arbitrarily drawn a chart that could signal the start of one if GDXJ falls to 55.17. That would trigger a theoretical 'sell' signal with downside potential to at least 51.74. An additional 'hidden' support at 55.63 could provide a tradable bounce. The supports should not give way easily, and that is why we can safely assume Mr Market means business if they do.
This symbol was setting up for a textbook 'mechanical' buy at 90.61 when last week began, but the green line where we typically do the trade got crushed, negating the opportunity. A new one subsequently materialized with a rally target at 91.49, along with the possibility of a fresh 'mechanical' trigger if TLT drops back to 89.35 (stop 88.62). The crosscurrents have left me mildly bearish, and I would grow moreso if TLT closes for two consecutive days beneath 87.81. That would portend more slippage to as low as 82.83 (daily, A=94.85 on 12-6).
I've reinstated MSFT as our top market bellwether because other symbols that have served in that role look too punk to count on. The shares of Apple, which couldn't innovate its way out of a wet paper bag, will be extremely vulnerable when recession hits, while Bitcoin's canny handlers lack the guts to lead stocks higher. DaBoyz turns the cryptos loose to run wild whenever the broad averages climb sharply, but this is just go-along price action incapable of exciting traders' animal spirits. 'Doc' Copper doesn't work, either. Although it looks capable of reaching $6.18 a pound, a 20% climb from current levels, that scenario is not believable in the context of a global boom in manufacturing. More likely, it would be a blowoff for the copper-intensive EV story, which has become less compelling as electric-vehicle resale values have plummeted. For better or worse, we should focus on Microsoft to gauge the strength and staying power of this nascent bear rally. With a little more than $3 trillion capitalization, the software behemoth is the third-largest company in the world, just behind Apple and Nvidia. Unlike those companies, however, Microsoft is not especially vulnerable to an economic downturn, since such a large portion of the firm's nearly $200 billion in revenues is derived from recurring subscriptions to cloud computing facilities, personal and business software. Microsoft will remain a cash cow in the hardest imaginable times, even if the supply of dollars implodes in a deflationary bust. A 'Buy' Signal So what does MSFT's chart say? Last week, a rally tripped a theoretical buy signal at 394.56 that implies the stock will reach a minimum 412.20. We should expect a tradable pullback from that number, but if a nasty relapse follows instead, taking out the March 11 low at 376.91, that would
Last week's fleeting thrust to a marginal new peak slightly altered the immediate picture. Expect Bitcoin to fall to at least 81,524, a midpoint Hidden Pivot support that can be used to bottom-fish with a small-pattern (i.e., 'camouflage') trigger. I doubt bears have the gumption to push this vehicle down to the 74,243 target, but the odds would shorten following a two-day close beneath p=81,523. Alternatively, if buyers get revved up and push this vehicle sharply the other way, they are apt to encounter tradable 'voodoo' resistance at 89,802. _______ UPDATE (Mar 29, 2:03 p.m.): I had scheduled the above to autopublish tomorrow (Sunday) afternoon, neglecting to consider that the little sonofabitch never sleeps. My 81,523 downside target did in fact catch the low of an $1100 bounce within one-tenth of a percentage point. I mention this belatedly because I didn’t want Bitcoin’s 24/7 histrionics to cheat me out of a damned good call.
Traders spent the entire week screwing the pooch, demonstrating that bulls and bears are equally clueless at the moment. It suggests that the coming bear rally will likely be a tedious affair, about as much fun to watch as the 1893 New Orleans matchup between two determined lightweight boxers, Andy Bowen and Jack Burke. It went 110 rounds before the ref mercifully called it a draw. Will the SEC step in and freeze stocks at a permanently high plateau? My hunch is that the longer this slugfest lasts, the more likely the broad averages will make marginal new highs before a full-blown, take-no-prisoners bear emerges. More immediately, however, you should use 5845.75, the Hidden Pivot target shown in the chart (inset), as a minimum upside objective when the new week begins. It will remain viable as long as traders, entranced by Wall Street's fun-house mirror, don't stop themselves out with a stupid, pointless feint beneath last week's 5650.75 low.
MSFT's glory days may not return soon, but the polio-inflicted rally begun two weeks ago from a shell-shocked low at 377 has at least a little farther to go. Specifically, a Hidden Pivot resistance at 398.06 beckons and can be used as a minimum upside target for the next 2-3 days. A tradable pullback is likely there, but the effect could be muted by my billboarding it on the front page. (Please note: It is visible only to paying subscribers.) Pivoteers can hitch a ride coming and/or going, but I'd suggest a tightly constructed 'camo' trigger for the short.
