This Thursday morning, December 8th, Rick will be conducting a webinar focused on the state of global markets. Among the specific topics of discussion will be bellweathers such as the Dollar Index, T-Bond futures, the euro and index futures for the broad averages. During these events Rick examines a variety of issues with an eye towards providing actionable trading advice to attendees. Register now for the free event. Space is limited. Reserve your slot now.
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T-Bond Futures
Yesterday’s hard selloff in Silver generated some wicked impulse legs on the hourly chart, and so I’ve hung out the yellow flag for the first time in a long while. Scalping should be done from the short side in both Gold and Silver — the first time this has been so since early January. Please note as well that T-Bond futures have bounced from a potentially important low and that the Dollar Index is very near a similar high-odds bottoming point.
The USD Index (DXY) and T-Bond futures are both approaching well defined Hidden Pivot supports, so we need to be on high alert for a possible major trend change in the markets. I’ve provided a precise target for DXY, but here is the equivalent support for June T-bond futures: 117^18. Both come from downtrending patterns that are clear and compelling on the hourly chart.
We should require nothing less than a 123^02 print today before inferring that the two-day surge into week’s end was more than a dying-cat bounce. A rally to that price would surpass a tiny (aka look-to-the-left) peak made on the way down last Tuesday, renewing and solidifying the bullish impulse thrust recorded on Friday. Bears had better dive for cover if this occurs, since the squeeze will only just be starting.
The futures suffered their most savage drubbing in a while, bottoming so far at the exact midpoint of the pattern shown. This implies that if they go any lower, the midpoint’s ‘D’ sibling at 120^01 is likely to be reached, and precisely.
The futures are at a crucial resistance — the 124^31 Hidden Pivot midpoint of the big pattern shown in the chart. It projects to as high as 130^04 (!), but there is also a lesser bullish pattern that suggests 128^17 is possible without a lot of strain. It’s midpoint sibling lies at 125^07, so let’s stipulate that if the the futures exceed 125^07 on a closing basis for two consecutive days, they should be considered on their way to significantly higher prices. That would be bad news for equities in the U.S. and elsewhere, since it implies a full-blown panic into the supposed safety of U.S. Treasury paper.
The bullish penetration of a midpoint resistance at 120^23 augurs more strength over the next 7-10 days to as high as 123^07. (The equivalent for the December contract is 121^30.) Secondary resistance at 122^11 can be shorted with a stop-loss as tight as four ticks. ______ UPDATE: The futures spiked to 122^17, stopping us out with a four-tick loss. The overshoot suggests still-higher prices lie in store.
The long-bond futures look like they could continue to do nothing for more weeks or even months. On the daily chart, the last time they created a bullish impulse legs was two months ago, in late June. Since then. however, bullish and bearish feints have canceled each other out, suggesting that indecisiveness is likely to rule for the foreseeable future. A pop this week exceeding 121^31 would change that, turning the picture bullish immediately, but I am certainly not expecting it.
Gold and Silver Near a Major Bottom
by Rick Ackerman on September 23, 2011 1:36 am GMT · 75 comments
Don’t let this nasty shakedown in bullion scare you. For the record, we are quite confident that gold and silver will be back on track soon, bounding toward new record highs. But both may have a little farther to fall if forecasts disseminated earlier to Rick’s Picks subscribers prove correct. Specifically, we’ve been drum-rolling a possible 1709.20 bottom for Comex December Gold, and a 35.70 low for December Silver. As of yesterday, the latter had overshot its target by 17 cents, hitting a 34.53 low that in a single day shaved 10 percent off the value of the world’s store of silver. Gold, for its part, didn’t quite reach the 1709.20 target, instead turning higher from 1723.20. We think the December contract’s so-far $29 bounce from that number will prove short-lived and that the futures will make an important low at or very near 1709.20 today or Monday. If so, this is likely to put pressure on Silver, perhaps pushing quotes below $35 for a day or two. In any event, if the selloff in bullion is not over already, it will be soon. » Read the full article