It has been years since the E-Mini S&Ps created a bearish impulse leg of daily-chart degree. They did so last week, however, with a plunge that breached the required two lows: a small 'internal' from December 10, and the external low at 5921.00 recorded on November 19. The implication is that the urgent short-squeeze rally on Friday will sputter out shortly, allowing the futures to resume their well-deserved slide into hell. It will be interesting to see whether this happens before New Year's, which would be the kind of shocker that takes everyone, bull and short-covering bear alike, down with it. This seems difficult to imagine, given that the rigged support system for the stock market is ubiquitous. It includes Fed funny-money, portfolio managers locked into a handful of high-fliers, and share buybacks by companies with many more tens of billions than they know what to do with. Be patient, permabears. Your day is coming, probably sooner rather than later.
Microsoft would trigger a 'mechanical' buy if it falls to the green line (x=433.65), but I suggest paper-trading this one unless you are an expert because the point 'a' low is so nebulous. I rate the pattern a middling '6.5' (out of 10). Even so, price action at p, even in lousy patterns, is usually useful for analyzing trend strength. In this case, the initial upthrust that impaled p was sufficiently decisive to imply that d=448.70 is entirely likely to be reached. Will the miserable pisher-of-an-'a' change the odds? We're about to find out.
The three-day dance around p=2630.70 left me mildly bearish when the week ended, but not so bearish that I would recommend a 'mechanical' short at the green line. Although the bounce to the line will have occurred off our sweet spot midway between p and p2, the tedious, irregular C-D leg let off enough steam to flatten A-B's bearish energy. That energy is what makes 'mechanical' trades work and the reason why this gambit is unlikely to offer the edge we seek. In any event, the D target at 2500.00 remains my worst-case low between now and December 31. It will also provide good odds for bottom-fishing with a tight stop-loss.
The three-day dance around p=2630.70 left me mildly bearish when the week ended, but not so bearish that I would recommend a 'mechanical' short at the green line. Although the bounce to the line will have occurred off our sweet spot midway between p and p2, the tedious, irregular C-D leg let off enough steam to flatten A-B's bearish energy. That energy is what makes 'mechanical' trades work and the reason why this gambit is unlikely to offer the edge we seek. In any event, the D target at 2500.00 remains my worst-case low between now and December 31. It will also provide good odds for bottom-fishing with a tight stop-loss.
The March contract looked bound for at least p=30.763 when the music stopped on Friday. The pattern is sufficiently clear to keep us confidently on the right side of the trend and allow us to exploit it profitably with relatively little risk. Most immediately, that would imply getting short at p. The trade should be attempted only if you are comfortable using reverse-pattern triggers of small degree (aka 'camouflage'). If the rally hits our sweet spot between p and p2 straightaway and then pulls back to the green line, that would offer a back-up-the-truck opportunity to bottom-fish 'mechanically'.
GDXJ is probably within no more than five points of groping its way to the bottom of the textbook head-and-shoulders pattern shown in the hourly chart (see inset). If it's going to revive sooner rather than later, though, the secondary pivot at 43.44 would be a logical place for this to occur. You can bottom-fish there with a tight stop-loss, using expiring call options if you've got the chops. I've used a dubious one-off 'A' high here, and the pattern could turn out to be governed by the marquee high at 55.58, so plan accordingly.
The Dollar Index pulled back hard on Friday, half-correcting the steep upthrust from two days earlier. Given how the uptrend impaled the midpoint Hidden Pivot (p=107.36), there is little room for doubt about whether D=109.30 will be reached. As noted earlier, that would keep weight on gold. It would also set up a potential 'mechanical' buying opportunity at p=107.36. We don't often do this trade at p, but the trend is so strong that waiting for a relapse to the green line (x=106.39) might leave us empty-handed when the turn comes. _______ UPDATE (Dec 28): The dollar has hovered stubbornly aloft, denying us an opportunity to bottom-fish at the red line (p=107.36). The trade recommendation remains viable nonetheless.
I am playing fast and loose with crude's 'technicals' this week, since chat-room interest in this symbol appears to be dead. As such, I have little reason to provide potentially tradable ABCD coordinates. Instead, here's a perfectly serviceable pennant formation with the January contract falling to around 67.50 before it gratuitously reverses direction. Nudge me in the chat room if you actively trade this symbol and require more-detailed guidance. A bearish bias is warranted, albeit with close attention to the vicious feints and head- and foot-fakes that have always characterized this vehicle's movement.
The tightly stopped short I suggested at 6109.00 two weeks ago is holding, since the December contract has traded no higher than 6111.00. It took a nearly 60-point rally to trigger the trade, since the futures were at 6051 when I made the recommendation. Did my target catch an important top? We'll know soon, since the subsequent selloff ended last week just shy of the 6036.50 correction target shown in the graph (see inset). If you've been short for the ride down, cover 50% to 75% at 6036.50 and place a stop-loss at 6085.50 for the rest. If it's hit, that would imply new record highs are coming. Even so, let's be alert to the possibility of a fake breakout that would trap bulls and shorts alike. Alternatively, a two-day close beneath 6036.50 would be reason to take this weakness seriously.
MSFT sold off hard after wafting into the middle of the supply zone I'd detailed here last week. Accordingly, I've used a somewhat unorthodox, bearish reverse pattern to tell us whether there is any conviction behind the selling. Use 438.46 as a minimum downside target for the near term, and don't hesitate to try bottom-fishing there, especially if you know how to set up a 'camouflage' trigger that would limit entry risk to no more than 5-10 cents per share. If sellers crush the 'hidden' support at 438.46, expect more downside to D=420.76. That would be a big deal, since MSFT's recent strength has restored it to its position as the most important stock in the world -- not merely a bellwether, but THE bellwether for the everything bubble. _______ UPDATE (Dec 18, 11:59 p.m.): It's possible that my decision to resurrect Microsoft as our #1 global bellwether may have caught a very important top. MSFT's unsettling plunge today was nastier than we might have expected, especially considering the company's revenue stream from recurring subscriptions is practically bomb-proof. And yet, the stock fell 3.76%, trailing only Amazon and Tesla in the megastock loser's column. The latter's share price is so bloated with Musk-worship in a dangerously saturated EV market that TSLA will undoubtedly turn out to be the best short in the lunatic sector once the bear market has run its course. I'd warned in the current 'Morning Line' (see above) that Mr Market might throw the kill switch at the height of Santa season, the better to crush the multitudes who evodently fear an ugly surprise, if it materializes, early in the new year. If Wednesday's selling picks up tempo into week's end, we'll have our answer: a Christmas bloodbath for investors. How very clever it would be for
