Any short attempted from the 6109.00 rally target we were using would have made money, even if tightly stopped, since the futures fell 20 points after topping on Friday at 6111.00. I did not establish a tracking position, however, because no one mentioned having done the trade. Now, if buyers close this gas-bag above 6111.00 for two consecutive days, expect more upside to the 6219.00 target shown in the thumbnail chart. Trade with a bullish bias until such time as the target is reached, then use a 49.50-point trigger interval to tell you when to get short. A 'camouflage' trigger will be necessary, since conventional-entry risk would be $10,000 on four contracts.
The chart shows two invisible impediments that could trip up bulls this week. The first lies at 446.62, the D target of a conventional pattern begun from 400 in early September. The second is a trendline resistance from a head-and-shoulders pattern that will come in around 455. Together, these potential rally-stoppers represent thick layers of supply between current levels and July's record 468. The oddity is that until July MSFT had been leading the market higher. Is it about to resume that role after underperforming lunatic-sector stocks for the last several months? We should be ready for this possibility in any event, so stay tuned for updates in the days ahead. _______ UPDATE (December 12, 10:45 a.m.): A diabolically sick time for MSFT to be short-squeezing higher just when the lunatic sector is coughing and wheezing itself to death. One could almost believe the chimpanzees who purport to 'manage' money actually do meet in a smoke-filled room to plot each gratuitous, stupid sector rotation. If the stock hits 460, I'll throw in the towel on that promising head-and-shoulders pattern that has perfectly defined and controlled the stock's ups and downs for the entirety of 2024.
The weekly chart I posted last week set a high bar for bulls. I've downsized this week to the hourly chart, which shows TLT about to test the resistance of a Hidden Pivot midpoint at 94.64. The rally has come far enough since November's sub-90 low to warrant the benefit of the doubt. As always, a two-day close above the red line or a decisive penetration of it would imply more upside to at least p2=97.18 or even to d=99.72).
Gold served up a second consecutive week of slop, making it difficult to guess what's on the minds of the thieves who manipulate it for a living (legally and with the Guvmint's complicity, of course). However, enduring uptrends tend to produce relative weak countertrends, and that describes this one so far. It has twice penetrated to Hidden Pivot midpoint support at 2647.90, but without sending the futures down to the pattern's 2605.30 target. They could still get there, but bears might be drained of energy by then. Alternatively, a pop through C=2690.50 would signal a resumption of the long-term bull trend. Worst case: a two-day close beneath 2617.50, portending more slippage to as low as 2487.00 (daily chart, A= 2826.00 on 10-31-24).
Last week's slight penetration of Nov 19's external high at 32.03 was bullish, although not very. It generated a weak impulse leg on the daily chart that implies any retracement this week that holds above 30.095 would be corrective and therefore a 'buy'. A further push up to p=32.483 would certainly call for a tightly tightly tightly tightly stopped short, presumably with a 'camo' trigger fashioned from the 5- or 15-minute chart. My worst-case target is 29.160, a back-up-the-truck number for those of you who have been waiting since early November for a better buying opportunity (daily chart, a= 33.76 on 5-29-24).
The pattern shown has worked perfectly so far, signaling a winning short from the red line and a theoretically juicy payoff from 'mechanically' bottom-fishing at the green line (x=6000.44). That means it's equally likely to work for getting short at D=6109.00 with a tight stop. Shining a spotlight on the trade on my front page could slightly queer the pattern's voodoo magic, so I'd suggest using a reverse-pattern trigger of small degree (i.e., sub-5 minute) to execute the trade. Because the first contact with p=6042.63 on the way up did not impale this Hidden Pivot resistance, there can be no ironclad guarantee the target will be reached, although it seems likely.
Continue to use the 435.90 target given here last week as a minimum upside objective and an optimal place to get short. A rally to that 'reverse' Hidden Pivot resistance would not affect the textbook perfection of a head-and-shoulders pattern that has been under construction since January. The pattern seems almost too pretty to work, but even if it doesn't, I still expect 435.90 to provide an excellent opportunity to make money betting the 'don't' line. Use put options at the 432 strike with three to ten days left on them. Be sure to check the chat room and your email 'Notifications' for updated guidance, however, since it might be necessary to modify the trade to obtain the best possible odds. ________ UPDATE (Dec 5, 1:10 p.m. EST): MSFT gapped through the 435.90 pivot on an opening-bar short-squeeze, but I still doubt it's going much higher. There are two places you can look for a downturn, both of them voodoo numbers: 440.18 and 455.10. If the stock reaches the higher, it will trash the still-perfect head-and-shoulders pattern, but without negating the possibility of a major top forming well shy of the all-time high at 468.36 recorded in early July.
The selloff from the 108.07 high recorded on November 22 has exceeded any minimum downside target I could have projected at the outset. Also, the high fell a whopping 91 cents shy of my 108.98 upside objective, and that is another reason I've given this correction wide berth with the big pattern shown and its 'locked' point 'a' high. The chart implies the downtrend is bound for a minimum 104.91, the pattern's midpoint Hidden Pivot support. Expect a tradable reversal from there, but if it is short-lived, or if the support is decisively penetrated on first contact, it could signal an important tone change in the bull cycle begun in early October. Since gold has been moving higher with the dollar, we might expect bullion's uptrend to accelerate if the greenback continues to fall.
The December contract cheated us out of a profitable 'mechanical' buy at the green line when it erupted for a 60-point rally without having quite touched our 'launching pad' at x=2598.80. Price action is bullish but not quite bullish enough to make the bounce a shoo-in to achieve the pattern's 2770.70 target. We'll therefore begin the week without the usual confidence and clarity, so check for updates if there's any movement, since that cannot but shed light on the strength and resilience of the uptrend. My gut feeling is that it will achieve d=2770.70, but without making it look easy. _______ UPDATE (Dec 3, 3:58 p.m.): More sideways tedium this week has added nothing useful to an indecisive picture. I am proffering this chart nonetheless as a companion to the update moments ago of the Silver tout immediately below. Both need an upsurge through their respective midpoint Hidden Pivot resistances to signal the onset of a meaningful rally.
A bearish target at 28.445 target that has been forever in coming now looks highly likely to be reached. The reverse pattern with which it associated is sufficiently gnarly that you can bottom-fish there with a very tight stop-loss, preferably crafted with a 'camouflage' (i.e., small-pattern) trigger. Alternatively, the futures would signal an opportune 'mechanical' short on a rally to 31.880. That is a Hidden Pivot midpoint resistance associated with a=30.440 (10-8, 180-minute) _______ UPDATE (Dec 3, 4:09 p.m.): March Silver has tripped a theoretical buy signal with the potential to reach 34.870. The link is to a reverse pattern that I expect to work well for all purposes: buying, shorting, forecasting, determining trend strength. It is bullish that Silver has gotten traction, sort of, without having come down to the 28.455 target we were using to clock the correction. But the retest of the November 14 low should not have been necessary to jump-start Silver, and that will remain a concern until such time as the futures impale p=32.483, a key number for the near term.
