Rick’s Picks

Buyers on Friday impaled the 31.74 midpoint Hidden Pivot resistance of the bullish pattern shown, all but guaranteeing the rally will reach a minimum d=32.505. If the futures get past it as easily as they have p=31.74, that would portend not just a test of the 33.25 peak recorded on October 4, but a breakout above it.  The rally would then encounter the 'D resistance of a bigger pattern at 33.33, giving us another opportunity to assess the trend's staying power. A bigger picture provides high confidence that the December contract will eventually reach 37.249, a 'D' target on the monthly chart derived from a pattern stretching back to A=12.871 recorded in March 2020.

Four rising peaks on the weekly chart since April have created a wedge that will likely need more correcting before GDXJ can take out the 51.74 high recorded on 9/27. Use the Hidden Pivot midpoint support at 45.03 shown in the chart as a minimum objective for this pullback. You can buy aggressively there with a tightlystopped 'reverse trigger' if the opportunity arises, since the support is well located.  A bigger picture projects as high as 72.23. The rally has stalled at p=49.02, but a monthly close above this 'hidden' resistance would be encouraging.

Friday's manic short-squeeze, nearly all of which occurred on the opening bar, pushed the futures to within a single tick of a well-advertised target at 5868.50. Is the pattern that produced the target too obvious to work? Time will tell, but I suspect that traders will screw the pooch ('bassza meg a kutyát' in Hungarian, pronounced BOO-sta mega COO-cha) for a while at these levels before the bullish tide recedes. If not and the futures continue to fall from Friday's high, the first Hidden Pivot support where you could try tightly stopped bottom-fishing would be at p=5815.25 (daily chart, a= 5830.00 on 9-26); and thence at d=5762.25.

The futures spent the whole week sucking the marrow from bears with a shallow, stubborn correction.  One might think this would set up a fearsome rally, and there is that possibility. Regardless, we should keep a close eye on price action at the 5868.50 Hidden Pivot target of the pattern shown as we attempt to get short there in the usual way -- i.e., via a small-pattern reverse trigger (aka 'camouflage').  The pattern is one more example of an 'ABCD' that is too obvious to work precisely but which cannot fail to show stopping power that is tradable, however laboriously. Bears shouldn't grow too discouraged if the mindless herd plows through the target, since there is another, potentially even more daunting, 'hidden' resistance at 5906.25. That's the midpoint pivot, on the monthly chart, of A= 4310.50 (10/31/23).

I have higher targets outstanding, but this picture is more interesting, since it suggests that however much MSFT corrects, it will eventually take out the record 468.35 target recorded in July.  The pullback precisely from p=383.17 affirmed the pattern's reliability, and the shallow pullback that followed, which did not allow a 'mechanical' buy, attested to the uptrend's power. The subsequent poke past D=456.88 provided yet more evidence that new highs are coming. The overshoot may look relatively small, but a pattern this well-formed should have shown the same, precise stopping power as the red line (p). One last thing to notice is that, although MSFT's correction off the top was steep and wrenching, it did not quite touch the red line. Thus did the steep rally deny us a second 'mechanical' buying opportunity. This is an unmistakable sign of strength to come, and it will temper my big-picture permabearishness. Most immediately, look for this retracement to come down to p=400.47. It can be found on the weekly chart, where A=468.35 on 7/5.

Last week's bounce was the most powerful in a year, but is it going anywhere?  We could know soon, and with a high degree of confidence, depending on how the uptrend interacts with the 103.17 midpoint resistance shown in the inset. Although an easy move past it would imply more upside to at least D=106.12, that would leave the dollar merely level with a supply zone created by several peaks extending back nearly two years. A breakout above 107 would turn the weekly chart strongly impulsive, but we'll wait till it happens before drawing any conclusions. Here's a bigger picture to remind you that the almighty buck has been in a bull market for more than a decade, notwithstanding the Fed's best efforts to turn it into confetti. It is the only currency big enough to handle the global financial shell game, and it will always be in high demand for that reason, no matter what the BRICs and our many enemies are plotting against it.  The chart shows upside potential to at least p=112.20 on the next breakout.  ______ UPDATE (October 13): The rally stalled last week a tick above the 103.17 resistance noted above. Bulls need to do better to demonstrate their ability to push the Dollar Index up to at least 106.12.

Friday's plunge brought TLT down to within a hair of a compelling Hidden Pivot support at 95.13, but also to a voodoo number conducive to tightly stopped bottom-fishing. It remains to be seen whether this presumptive correction splatters the midpoint support, passes through it with ease, or reverses direction.  Two consecutive daily closes beneath it would imply more slippage to at least 91.87, the pattern's 'secondary' support. Still worse would be a decisive penetration the first time it is touched, since that would open a path down to d=88.61. All of this would be occurring in a balky bull market that could see TLT climb to 105.49, a big-picture target identified here previously. It shouldn't surprise anyone that Treasury debt has been getting pounded. The Fed recently began to ease with stocks and real estate in a vertical climb and the job market, such as it is, showing no sign of weakness. This could not but lead to more inflation, even though I still expect it to be snuffed by recession and the far more powerful debt deflation that a return to hard times will bring. Finally, I'll mention that T-Bond futures are in a similarly precarious position, having plunged on Friday to within two ticks of an important prior low at 121^23 recorded on August 8. If the December CBOT contract should breach the low, that would create a strong impulse leg of daily-chart degree. This implies that any subsequent rally would be corrective rather than destined for new highs. Here's the chart.

December Gold remains nicely on track for a move to at least 2803.40, the 'D' Hidden Pivot resistance shown in the chart. As noted earlier, the futures should be presumed headed to 2940.10 if they push past the lower resistance easily. I doubt this will happen, however, given the month-long stall at p=2576.70. I also doubt that buyers are ready to embark on a move capable of replicating the steepness of the A-B leg, and we may see a dip beneath Sep 30's 2646.20 low to give the next rally more running room. In any case, trading can be done using reverse patterns on the lesser charts that go back as little as 4-6 days.

See Friday's chat room discussion for a detailed explanation of a 33.23 forecast for this vehicle last Wednesday that caught the top of Friday's spike high and a so-far 94-cent plunge within half a penny -- a single tick. One contract shorted at the top could have produced a gain of as much as $4700 in a little more than two hours. Looking just ahead, I have used a daily chart (click on thumbnail inset) to project a 33.505 target for the next thrust. Although a pullback from Friday's high that touches the red line (p=32.33, a midpoint Hidden Pivot), would trigger a 'mechanical' buy, I am recommending that you attempt this only at the green line, and only if you know how to use a 'camouflage' trigger to cut the $3000 theoretical entry risk by 85%-90%. _______ UPDATE (Oct 8, 12:22 p.m.): The selling has turned ugly this morning, crushing d=30.565 (daily chart a=30.670 on 8/26). The futures are screwing the pooch now after having marginally penetrated the p support of a pattern that projects to as low as 27.65(!) As of the moment, however, the bunco artists who engineered today's shakedown may be able to do no worse than mildly breaching p=30.438. Here's a chart that shows it all.