Last week's peak missed the 37.15 target of the pattern shown by 27 cents. This is but a minor concern at the moment, but the shortfall is sufficient to suggest bulls were either a little tired or less than true believers. Regardless, because it took more than four months for the pattern to play out, GDXJ is due for a breather of perhaps 8–12 days. If it lurches higher within the next few days, however, and closes above D=38.15 for two consecutive days, that would imply bulls are again ready to rumble,
A 'mechanical' buy at the green line returned a theoretical profit on Friday when the dollar jumped to the red line (p=204.50). This is of no trading consequence, since we don't actually take positions in this vehicle, but it lends a touch of health to the overall appearance of the daily chart. The moderate presumption now is that the rally will continue to at least p2=106.44, and possibly event to D=108.38. Let's see whether bulls can push DXY past the midpoint resistance with vigor, since that would bull up the chart even more.
The Fed's main job supposedly is to manage our expectations. But have Powell & Co. painted themselves into a corner? At the moment, it would appear that investors have no clue what to expect from the Fed. That wouldn't necessarily be a bad thing, except that their default mode has been to push stocks with multitrillion dollar capitalizations into unsustainably steep rallies. This trend is growing more dangerous and delusional by the week, and even a slight feint toward monetary clarity by policymakers could pop the bubble, turning an economic boom quickly into a global downturn. Meanwhile, the Fed's credibility suffers every time they suggest inflation is mellowing. What their hemming and hawing suggest in reality is that no one on the Open Market Committee has bought gas or groceries in a long time. Stocks have been in an unnaturally steep climb since October, and no one would be surprised to see it end. Yeah, you've heard that before. But we'll continue to serve up bear market porn anyway because the bullish case is too stupid and boring to write about. However bullish you might be, let's face it: Stocks do not remotely deserve to be trading at these levels, and only an imbecile or someone paid to lie about it would argue otherwise. Lunatic Sector So how soon might we expect the market to go into a hellish dive? The chart above suggests the S&P Index could make an important top just 2.6% above these levels. We like the target because there is so little drama in the chart pattern that produced it. However, before we infer that the end is nigh, we need to put aside the fact that some key stocks in the lunatic sector -- specifically Microsoft, Nvidia and Facebook -- have already topped within a
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.
Although AAPL precisely fulfilled a longstanding target at 430.54 on the weekly chart on Friday, the rally still has a ways to go before it achieves an 'extension' target at 456.88 that comes from the C-D leg of the larger pattern. This is how we deal with rallies when they exceed big-picture targets, and the smaller segment should be judged on its own merits without much regard to -- in this case -- MSFT's weekly chart. That implies 456.88 is very likely to be achieved, and precisely, given price action at p. The initial stall there confirmed the legitimacy of the pattern itself, while the easy penetration of p=383 six weeks later strongly implied the rally would continue to D. ________ UPDATE (Mar 21, 10:24 a.m.): However compelling the long-term target at 430.54 might seem, the 439.35 target shown in this short-term picture takes precedence at the moment, since the explosive move past p implies D=439.35 is all but certain to be reached.
I've made a finicky adjustment to the point A low that yields a slightly lower rally target at 2269.10. Months of tedium at p do not allow certitude about whether D will be reached, nor does the stall precisely at p2=2167; however, my gut feeling is that 2269.10 will work as a minimum upside target. If April Gold gets no lift from last week's soporific string of lows near 2159.40, the next place you could step in to buy with a tight stop-loss would be at 2116.00. That's the 'd' target of a small reverse pattern on the daily chart. _______ UPDATE (Mar 21, 9:26 a.m.): The futures should be presumed bound for the 2306.20 target shown in this chart once they push decisively past the 2269.10 Hidden Pivot resistance noted above.
No change. The 27.34 rally target given here earlier still obtains. The initial upside penetration of p=24.765 was hardly decisive, but that is insufficient reason to believe the target won't be reached. Buyers are going to take their own sweet time getting there, though, and that would likely hold true if the futures swoon to x=23.478, generating a 'mechanical' buying signal. It would likely be good enough for government work, but don't expect to cash out for a partial profit soon after getting long.
For all its wacky histrionics, crude remains one of the most tradeable vehicles tracked on this list. The pattern shown, with an 82.48 rally target we've been using as a lodestar, produced a second 'mechanical' buy at x=77.26 last week that went on to rack up significant gains without much fuss or stress. Paradoxically, most of the trades come from thrusts into 'discomfort' zones that are so predictable that they should be called 'relaxation' zones. I will continue to provide real-time guidance for this vehicle that is commensurate with the interest subscribers show in the chat room. ______ UPDATE (Mar 18, 10:24 a.m.): I am raising my target to 83.26, since buyers are not having much difficulty surpassing rally targets of lesser degree. The pattern's point 'B' high is more sausage-y than I would prefer, but I'll use it anyway because the pattern itself looks gnarly enough to evade widespread detection and use. The target will be shortable when reached, but your trading bias should be bullish until then. If you were looking for yet one more negative factor to slow down the psychotic bull market rampage, crude's effortless waft above $80 barrel could be it, since it threatens to raise the price of everything tied to energy prices -- i.e., virtually all goods and services sold on this troubled planet. _______ UPDATE (4:03 p.m.): The rally from the Feb 5 low has gone out of control, killing my enthusiasm for getting short. It looks to be headed for 86.15; however, even on the five-minute chart, there was just one dicey chance to get long today using an rABC trigger. ______ UPDATE (Mar 20, 5:33 p.m.): See my 12:45 post in the chat room for an equivalent target for the May contract, plus actionable guidance.
Although the impulse leg in the conventional pattern shown was not very powerful, it was persistent enough that I'll give the bearish interpretation of this chart the benefit of the doubt. That means that GDXJ is on a 'mechanical'-short signal triggered on first contact with the green line. That implies that GDXJ is more likely to fall to p=33.73 than continue its ascent toward C=39.82. Regardless, I doubt that sellers will be able to push it down to D=27.63. _______ UPDATE (Mar 20, 5:52 p.m.): Use the 42.10 target of this large reverse pattern as a minimum upside projection for now. _______ UPDATE (Mar 21, 10:46 a.m.): I've flagged the 38.15 target of this reverse pattern on the weekly chart as a significant impediment and potential rally-stopper. It's worth shorting for a scalp, but my gut feeling is that it will give way, allowing further progress to the 42.10 target noted above.
The 'mechanical' buy triggered on Thursday when TLT fell to the green line (x=93.40) is looking like hell at the moment, with the steep fall over the last two weeks showing no sign of abating. However, 'mechanical' entries are never supposed to feel warm and fuzzy, since they are designed to exploit the vicious shakeouts that can occur when overly eager buyers get too far ahead of themselves. All we can do now is wait and see whether TLT takes a one-level bounce to the red line without exceeding C=92.01 to the downside.
