The S&Ps will be trading above 5000 if MSFT rallies the 15% needed to achieve the 430 target I've ballyhooed in this week's commentary. Even so, I doubt the E-Minis are about to blow through the 'discomfort zone' just above, since it is fraught with prior peaks and voodoo numbers. Accordingly, I've sketched a bearish reverse pattern that would trigger a short if the futures were to fall 75 points from any high. That's an unacceptably large trigger interval, but you can cut it down to size by setting up a 'camouflage' trade on a chart of lesser degree, such as the 15-minute.
My short-term-bearish outlook is more evolved in AAPL than in the E-Mini S&Ps, since the stock already triggered the prospective short noted in the tout for the latter. The trade would have finished the week $2.48 in the red, but I am not advising getting into it belatedly in any event -- at a better price, as it were. It would take but a 1.6% rally to achieve new record-highs, and there is no compelling technical rationale for betting against this. The next attractive buying opportunity based on the chart would come at p=184.60, a midpoint support that we can bottom-fish with an rABC pattern on the 15- or 5-minute chart.
With each new upthrust, TLT continues to pass our tests -- most recently by creating of a fresh impulse leg on the daily chart. This occurred when the rally exceeded a look-to-the-left 'external' peak at 91.61 recorded on September 22. The move topped 11 cents shy of the 93.17 'D' target shown in the chart, so that obstacle remains to be tested this week. Assuming it is exceeded, the next daunting impediment would be the 96.54 peak recorded on August 31. It is important enough that any move above it should be regarded as a sign that a potential bull market is emerging from its infancy.
Buyers impaled the 2073.00 target of the reverse pattern shown, implying the futures are on their way to at least 2152.60, the D target of a lesser pattern whose A & C coordinates are shown in the chart. Given the way bulls consolidated above the smaller pattern's midpoint pivot, the probability is high that D will be achieved with little ado. Since the futures by then will have broken free of gravity at $2,000, we should expect a relatively quick move from 2152 to 2,200, the first round number resistance above the soon-to-be-obliterated one at $2,100. _______ UPDATE (Dec 8, 11:47 a.m.): I'll bet our old friend Andy Maguire had a thing or two to say about Monday's psychopathic, whoopee cushion reversal in gold. He has noted that the pond scum who cause these takedowns have a risk cushion of as much as $90 in the arb against unlimited paper gold. Although they are obviously still able to squash gold down to $2000 practically at will, DaScumballs are going to find in increasingly difficult to fool investors into thinking gold deserves to be significantly lower than that. For now, the February contract is headed down to the 2001.50 target shown in this chart -- a good place to attempt tightly stopped bottom-fishing. Any lower would indicate 1986.90, an even better bet for bottom-fishing if it is achieved.
March Silver has moved into a thicket of prior peaks, but there should be little doubt it will surpass them and head unhesitatingly toward the 27.16 target shown. The December contract we'd been tracking has stalled at p2, but the equivalent obstacle here has been exceeded on a closing basis, attesting to the power of the move. The big pattern has yielded up just one 'mechanical' buy so far, but the rally has steepened since, suggesting that a swoon to the red line, never mind the green one, to set up a 'mechanical' buy is unlikely. In practice, this means we'll need to find a reverse pattern on a chart of small degree to get long enroute to 27.16.
The 42.09 target shown has been with us for a while but only came into focus on Friday with the clean move through, and close above, p2=39.18, the 'secondary pivot'. Since GDXJ shredded p=36.28 as well barely a week ago, the implied finishing stroke to D would seem almost as certain as that the sun will rise in the East tomorrow. The rally has been unkind to doubters and will not become any less so as it traverses the white void just above. Prompt me in the chat room if you've got an idea of your own that you'd like vetted, but it will take diligent attention to the lesser charts in any case to get aboard belatedly.
Crude teases prior highs and lows so relentlessly as to seem hellbent on tormenting everyone who trades it. I doubt the bear cycle begun from around 88 on October 20 will reach the 66.30 'D' target shown, but p2=69.56 certainly seems possible, given the small breach of p=72.93 two weeks ago. In any case, the next buying opportunity would likely come on a marginal breach of lows just to the left of Friday's close. The trigger interval would be $1.39, so check with me in the chat room for risk-limiting ideas before you take the plunge.
The Dollar Index tripped a theoretical buy signal on Friday when it slightly exceeded the green line (x=103.57) early in the session. A hypothetical trade would have finished in the red, but we'll await more evidence next week to determine whether the rally has the moxie to reach p=104.82, the midpoint Hidden Pivot resistance. Although we don't actually trade this vehicle, its gyrations inform and influence our outlook for other vehicles, particularly bonds and bullion. Assuming the latter remains strong, it will be interesting to see whether the dollar and gold/silver are able to rise simultaneously. That would be an important tone change -- something we haven't seen before for a prolonged period of time. _______ UPDATE (Dec 8): Nothing dramatic, but the dollar made encouraging progress last week toward the 104.68 midpoint pivot of the pattern shown in this chart. If it reaches it this week, that would generate the first bullish impulse leg we've seen on the daily chart since September. _______ UPDATE (Dec 13, 11:20 p.m.): Nothing cheers the chimps who manage your money like a falling dollar, since a strong one will undo every assumption that has powered global markets and economies (and Globalists!) for as long as anyone can recall. A day of reckoning is coming, so don't expect the dollar to keep falling just because Wall Street and the bozos who invent the news are spinning everything Powell says these days as wildly dovish.
They don't ring a bell at the top, as the saying goes, but it's hard to see how Mr. Market can avoid it this time. The stock market's heedless, nutty short squeeze since October will end when Microsoft hits $430, probably early in the new year. It's that simple. How do I know this? Just a gut feeling. I've been paying close attention to charts for more than 40 years, and the one above looks like it can't miss. It tells us two things with clarity and authority: MSFT will continue to rise until it reaches $430, a Hidden Pivot resistance; and, it will not surpass that number, at least not by much, without a major correction. Furthermore, because Microsoft shares, which are trading in record territory, have surpassed a laggard Apple's as the #1 favorite of portfolio managers, the former cannot but serve as a reliable proxy for institutional mindset. My high confidence that MSFT will reach 430 is rooted in the way buyers handled resistance at two crucial 'Hidden Pivot' levels: 1) at the red line, a 'midpoint resistance' at 322.01; and 2) at the pink line, a 'secondary resistance' at 376.29. Not only was the first level easily penetrated on first contact, it also became support thereafter, adding to the likelihood of a further move to 430.58. As for the secondary pivot, although it has yet to be decisively exceeded, the fact that it was exceeded at all strongly suggests the uptrend will continue. Also, the ABCD pattern is sufficiently clear and compelling that we can infer D=430.58 will show precise stopping power. Ankles Grabbed Mr. Market undoubtedly would love to rebuke (i.e., sodomize) me for being so confident. As the headline implies, though, I've willingly grabbed my ankles so that he can try. The pattern is
The December contract is about to get interesting, since its steep climb to a 4612.75 target, the attainment of which was never in doubt, will soon generate a powerful new impulse leg. This will happen when the uptrend exceeds the 4597.50 'external' peak recorded on September 1. Although the relatively small push it would take to achieve new record highs never figured into our trading plans, it was always a possibility. If and when it happens, we'll want to keep this old IBM chart well in mind, since it is as perfect an example as I could offer to show you how devious a major top can be. This one trapped bulls and bears alike with an initial high that fell slightly shy of my D target. When the stock sold off from the initial high, bears evidently were so busy patting themselves on the back that they were unprepared for, and unbelieving of, the short-squeeze sneak attack that produced the final high exactly at D. The devastating collapse that occurred thereafter could only have happened if everyone were unprepared for it. I've left some additional notes on the chart, which was designed to teach a key aspect of the Hidden Pivot Method, to wit: Healthy trends produce 'abcd' corrections that do not reach their 'd' targets. This one did, however, thereby warning that when IBM reached D of the dominant (i.e., bull-market) cycle, that would be the last hurrah of the long-term bull.
