Rick’s Picks

The mindless herd breathed a collective sigh of relief over the tariff tizzy's latest cliffhanger, celebrating its resolution with a short squeeze up their own wazoos that played out mostly on a single day, Wednesday. The spree left the futures just shy of a 6984.00 target that is nothing special, although its decisive breach would suggest a possible breakout above the range that has asphyxiated the S&Ps since Halloween.  More likely is a drop back into the valley, whose floor lies as much as 1400 points below.  The 6984.00 target is shortable, but you could also attempt a ride to it, since it is all but certain to be reached.

DaBoyz took advantage of bearish expectations that had been intensifying since the stock began its long dirge in the final days of October.  The rabid short-squeeze pushed MSFT to the top of the list of Friday's percentage gainers. It also slightly pierced a midpoint Hidden Pivot resistance at 469.36 that is associated with a 'D' target at 500.03. Penetration was not sufficient to clinch more upside to the target, nor to guarantee the profitability of a 'mechanical' buy at the green line. (As things stand, it would rate a still-enticing '7.3'.)  A bullish trading bias is warranted now, as is the expectation that this behemoth's continuing ascent will add buoyancy to the broad averages and the lunatic sector (aka 'Magnificent Seven').

The daily chart yields two logical possibilities for a top, or at least a pause, at either of two prices: 5132.20, which I've been drum-rolling for a while; or 5300.50. The latter represents an extension of the A-B leg that features a highly unorthodox low labeled A2.  Both targets are sufficiently compelling to suggest that bulls will not easily get past them. The patterns, while not in-your-face obvious, are easy enough to identify that we should not expect them to show precise stopping power.  Let's therefore be prepared for a stall in a place no one is watching: 5129.60, midway between p2 and D of the larger bottom. Notice that it coincides with the lower target at 5132.20, implying there will be double stopping-power there.

The ballistic, $30 climb since December appears to have topped within spitting distance of my 103.215 target. That could be it, but I'm not counting on it, especially since I have higher targets outstanding in gold. The chart shows an alternative possibility at 122.305 that leaves room for a further rally of 18% above Friday's high.  The pattern itself is unusual, but I am comfortable using it to project yet another, potentially important, high because I've seen this one work before in a roughly matching time frame.  Be prepared for a stall or worse at 109.043, the secondary Hidden Pivot. ______ UPDATE (Jan 26, 5:30 p.m.):  Everyone's been telling themselves they'd buy this little monster on weakness. Well, here it is.  The 98.575 target shown in this chart is almost certain to be achieved, but it is tied to a pattern that every clown in the trading world sees and is planning to use.  If you plan to join them, make sure its with a 'camo' trigger that they wouldn't know from a barstool. Alternatively, shorting x=107.035 'mechanically', stop 109.860, will enjoy better odds.  I'll publish more correction targets if and when they become available. For now, though, there are only 'conventional' patterns to use for that purpose.  Because I'd rather not bump heads with a thousand clowns, you'll have to be patient until more rABCs develop, including the obscure ones I prefer. 

The chart replicates the pattern I've used to project a 5300 target for Feb Gold. The corresponding target for GDXJ is 151.42, and although the pattern, like the one for gold futures, starts with an un-kosher point 'A' low, it should prove more than good enough for government work.  In fact, it provides an anchor that visually suggests that 151.42 will be a resistance point of consequence. It is the highest target I can project with unexceptionable coordinates. Using a longer-term chart here is not particularly useful for creating new point 'A' beginnings because it would simply recall whatever relatively undramatic lows occurred with GDXJ trading beneath $40. Some of the ups and downs back then may have felt like a big deal, but in the context of the big move up that has occurred since August, they were just grassy bumps on a rural airstrip. _______ UPDATE (Jan 26, 12:02 p.m.): Like much else in the bullion world, GDXJ has gone all lunatick-y, starting today's session with a wildly exuberant gap to the 151.42 target advertised above. It has spent the day so far diddling this Hidden Pivot, but the already 70-cent overshoot has practically guaranteed still-higher prices. I am able to project them only by using 'extension patterns' along the Big Picture's C-D leg, but what would be the point? Query me in the chat room if you get desperate for further guidance.

The futures were on a 'mechanical' sell signal to D=6925.25 when the week ended.  It came in the final hour of the session, well after the trade was triggered 'conventionally' on the way down on Thursday afternoon.  Price action continued a lengthening string of Fridays so boring that a trader fixated on his screen could fall into a trance. We may not know for a few weeks or longer whether this has been topping action or  alternatively a consolidation for a run at higher prices.  In any event, I wouldn't suggest bottom-fishing at the target of the pattern shown, since it is compromised by a coincident low on Wednesday that is bound to attract a thousand clowns. ______ UPDATE (Jan 19, 12:40 a.m.): Sellers went bananas over more Trump tariff bullshit, sending the futures down to 6911.00 so far. That's 2.0 points from the 6909.00 target I billboarded in the chat room last Tuesday as a back-up-the-truck number.  It still is, provided you know how to set up a 'camo' trigger on the hourly chart. The tactic is explained in detail in the Hidden Pivot Course I've made available free to subscribers. _______ UPDATE (Jan 20, 10:10 a.m.): Sellers crushed the 6909.00 support, putting the futures on course for a rendezvous with 6819.75 or worse.  In theory, 6869 has triggered a 'mechanical' buy and would be the second signaled at the green line of a bullish pattern that projects to 7163 (60-min, A=6596 on Nov 21). That pattern would be wrecked, however, and stopped out, with a print at 6771.00.

The stock spent most of the week lollygagging near the 457.04 'secondary Hidden Pivot' of the bearish pattern shown.  Its eventual  target is 444.89, a $15 fall from here. However, the breach of p was such a laborious affair that I cannot guarantee that it will be achieved.  But if p2 is decisively exceeded to the downside, or if the stock closes for two consecutive days beneath it, odds of further fall to 444.89 would shorten significantly. For now, 444.89 should be viewed as a worst-case low for the near term. It is also a back-up-the-truck number for bottom-fishing, since even with the somewhat obvious pattern, D=444.89 cannot possibly give way without a struggle. ________ UPDATE (Jan 21, 5:57 p.m.): After the stock MSFT has put in a tradable bottom at or very near 431.89, the rally along a big-picture C-D leg would have the potential to reach 593.79. Seems farfetched, I know, but the stock will face a test we can rely on near 469.29, a major midpoint Hidden Pivot that coincides with the 2024 top. Neither of those Hidden Pivots exists yet, and their exact, respective locations will depend on where the actual low occurs. Please note that the time stamp for this post, along with the last price, come from my update in the chat room yesterday. 

Let's use the imagined head-and-shoulders formation I drew here last week to get short at 106,464, the midpoint Hidden Pivot resistance of the pattern shown. The provenance of the 108,378 stop-loss I am recommending is novel, since it is derived from an unrelated 'mechanical' set-up that carries more risk. This is a blend of the two trades, with a price objective of 72,808. That implies this long-term trade will be risking $1914 initially to make as much as $27,144.  Please note that the odds of getting stopped out are significantly higher than if we employed an entry strategy with a wider stop-loss. _______ UPDATE (Jan 20): Bitcoin's plunge on Sunday put my wishful short far out of reach. It could now fall to 87,722 -- gratuitously -- over the next 3-5 days, and a rally to 95,403 would trigger a 'mechanical short, stop 97,964. _______ UPDATE (Jan 21, 1:18 p.m.): For lack of genuine interest, Bitcoin has flunked the reinstatement test. The $2800(!) bounce off yesterday's low came from within 22 points -- a fiftieth of a percentage point! -- of the 87, 722 target I'd advertised in the last update (see above). There was no mention of this in the room, not even from the dozen-or-so subscribers who professed to want BTC to remain on the list. Accordingly, starting on Sunday, I will substitute Copper on the touts list. I am willing to provide private Bitcoin forecasts to anyone who wants them, but the charge will be $1500/month, and I will need at least four signups to initiate coverage. The service will come with a money-back guarantee, details on request. Serious inquiries only at the email address given in the chat room.

The simple, corrective pattern shown is unlikely to deceive us as we search for signs that the bull market might be faltering.  The highest target I've projected so far is 5132.20, somewhat lower than the 5176.00 given here last week.  That number was derived from a composite chart, but the revised target, which comes from the February contract alone, should give us a more accurate picture.  If getting to 5132.20 is going to remain a good bet, the futures should retrace to no lower than p=4500.70.  They could fall beneath that number or even to D=4350.80 and still be no worse than even odds to hit 5132. But if we are looking for better odds, 4500.70 must hold.  If it doesn't, and a subsequent rally brings the futures back up to the green line (x=4575.60), that could conceivably set up a 'mechanical' short. Moreover, if the current downtrend crushes the 'hidden' support at 4350.80, that could spell trouble for the bull market. _______ UPDATE (Jan 19, 1:01 p.m.): A bullish wilding spree Sunday night turned a would-be corrective pattern (see above) into chop suey, ensuring more upside most immediately to at least 4773.90. _______ UPDATE (Jan 20, 10:48 a.m.): Currently trading for around 4730, the futures are now bound for a minimum 4835.50 (daily, A=4032.80 on 11/18). A correction to p=4559.90, however unlikely, would warrant a somewhat rare 'mechanical' buy at the red line. D=5132.20 is still the highest target I can project using the daily bars.