September Crude loitered for four days at a 76.26 Hidden Pivot correction target identified here earlier, then crushed it with a running dive that followed a vicious head-fake. The subsequent low occurred almost precisely at the too-obvious trendline shown. Since every oil trader in the galaxy will have used this feature to bottom-fish, it is unlikely to work precisely. However, sellers are going to have difficulty turning such a compelling 'structural' support to mush, so look for oil's so-far 12% slide to end hereabouts. _______ UPDATE (Aug 5, 12:35 p.m.): The slide did not end at the support. Is oil perhaps discounting the possibility that the stock market's plunge has set in motion an economic collapse?
The futures bounced last Thursday from within a hair of the green line (x=5421.21), triggering a textbook 'mechanical' buy within a very un-textbook ABCD pattern. It's a credible signal, however, given the initial hesitation at the red line on the way up, and the stall precisely at p2=5728.14. Even so, I am wary of the possibility that this so-far moderate bounce will fail to achieve the D target at 5881.60, effectively ending the bull market begun in 2009. The September contract is a lead-pipe cinch to reach p, though, so we'll put further speculation aside and focus on trading the remaining 75 points of 'ceertain' upside.
The 435 'd' target of the reverse pattern shown looks too compelling for the stock to have crushed it effortlessly. It did, though, signaling the likely failure of the next rally to achieve new record highs. Even if it did, I'd treat the breakout as a phony and lay in a store of put options that correlate with a sell signal on a chart of lesser degree (aka 'camouflage'). Let's first see whether the stock is able to push past the 'external' peak at 446.96 recorded last week on the way down.
While the broad averages were getting pounded last week, bitcoin's deft handlers were displaying the kind of brash confidence that all but guarantees significantly higher prices -- and soon, especially if stocks continue to recover. Use p=71,394 as a minimum upside projection for the near term, and expect this hoax to punch through this Hidden Pivot with little difficulty. That would shorten the odds of a finishsing stroke to the 89,029 target flagged here earlier.
The futures rallied nearly $40 last week from within a dime of the target provided here a few days earlier. This has not made me especially bullish, however, even if I am open to the possibility the rally will achieve new highs without requiring five to eight weeks to recharge, as has been the case since April. That scenario would become more like if the October contract lunatics above the external peak at 2456.70 recordeed last Wednesday on the way down. Until such time as that occurs, be alert to the possibility of a punitive relapse.
September Silver took a tentative bounce from the launcher last Thursday, but it will need to close above the pink line at 28.82 to be considered airborne. The reverse pattern shown is both compelling and obscure, so d=27.41 stood to work precisely. Is the reversal from 14 cents above that Hidden Pivot sufficiently precise to infer the downtrend is spent? Probably. But if the futures relapse this week, be ready to bottom-fish voodoo 27.05 with a trigger interval as tight as a dime. ______ UPDATE (Jul 29, 6:13 p.m.): The futures relapsed, all right, but only enough to get them even closer to my 27.41 target. Is the new low at 27.45 close enough? The question is no longer worth pondering, but you should be long if you used the suggested trigger interval, with a partial profit from the 60-cent move that has occurred so far.
Ordinarily, the failure of a downtrend to achieve a 'D' target should be read as a sign of incipient strength. In this case, however, the gap-down opening after GDXJ head-faked above p=45.95 implies that the target remains likely to be reached, notwithstanding the robust bouncce that has occurred so far. The midpoint Hidden Pivot is a speculative place to try aa 'mechanical' short in any event, so be ready to buy puts there if overly enthusiastic buyers goose this vehicle in the early going after Monday.
Crude's so far $1.35 bounce from within 7 cents of the 76.26 target I'd flagged suggests the rally is likely to get legs, so don't be fooled if this vicious little sonofabitch fakes a low beneath Friday's 76.19 bottom before it takes off. This could set up a 'counterintuitive' trigger for Pivoteers who are familiar with the technique, which is the forerunner of the reverse-pattern set-up. Since no forecast should be chiseled in stone, let's remain open to the possibility that the low will be broken decisively. If that occurs, assume DaBoy are fixing to crush quotes.
Last week's correction has further to go before buyers could step in without risking much. A pullback to the green line (x=5422) would trigger a 'mechanical' buy, although there are no guarantees we'll be gifted with such a bargain price. More interestingly, neither can there be any guarantees that the next big rally will reach the 5881 target shown in the chart. Had the uptrend impaled p=5575 a month ago on the way up, a finishing stroke to 5881 would be more or less asssured. However, price action at p was muffled, and it took fully three weeks before buyers were able to push past it decisively. That is a cautionary sign, even in a bull market that has been as strong and steady as this one.
MSFT is falling after having slightly exceeded the 462.80 target shown. Ordinarily I would regard the overshoot as mildly bullish, but in this case the target was simply front-run by sellers eager to short an ABC pattern so obvious it could be seen from outer space. With all these clowns piling on, the short squeeze that occurred above the target should have been stronger. The implication is that the stock is falling on organic weakness and will need to correct stridently before it can turn around. Hidden Pivot levels aside, my guess is that the pullback will come down into the space defined by the two prior lows at, respectively, 388 an 404.
