AMZN’s heedless sponsors goosed the stock to an intraday high at 1841.29 that missed an 1843.29 target I’d spotlighted earlier by $1.34, or less than 1%. The stock plummeted $28 thereafter, but because subscriber interest in the target, and in leveraging it to get short, were next to nil in the chat room, I haven’t established a tracking position. For your information, expiring 1750 puts were the first out-of-the-moneys one could have bought for less than 1.00 when the stock was topping. They traded down to 0.88 before rocketing to 3.04 in a little more than two hours. This is not quite ‘jackpot’ odds, however, since we usually look for at least a quadrupling in price. For now, we’ll move to the sidelines and watch, since Monday’s high could turn out to be an important one. _______ UPDATE (July 17, 9:11 p.m. EDT): It didn’t. The stock is the most bankable sure thing in the world of managed money, and that’s why it will continue to rampage higher until the heavenly trumpets sound. Use 1864.24, a minor Hidden Pivot, as a minimum upside objective for now.

Energy consumers shouldn’t get their hopes too high that the steep decline in crude oil prices over the last several days will continue. One reason I say this is that, after two sharp breaks in price during that time period, the selloff has exceeded only a single ‘external’ low on the intraday charts (see inset).  This suggests the move is still merely corrective relative to late June’s big run-up, which saw the August contract rally from $64 to $75 in less than three weeks. A second reason I don’t put much store in the downtrend is this unpersuasive attempt by the Wall Street Journal to explain it: ‘Attacks on Libyan ports, U.S. sanctions against Iran and supply disruptions have underpinned the recent oil rally even as protectionist trade policies are raising fears of a global economic slowdown and lower consumption of materials. But analysts said higher output from Libya and the possibility that Russia could agree to further increase supply to fill possible production gaps were hurting prices Monday.’  Has anything really changed?  It doesn’t sound like it. I will revisit my bullish logic if the weakness continues, exceeding mid-June 63.40 low. But until such time as that happens, my outlook still favors a move above $80/barrel. This forecast is purely technical, by the way, and goes against my gut feeling that the global economy is not strong enough to push crude above $80, nor will it be any time soon. Regardless, I’ll let my charts do the talking. Right now, they are saying quotes are bound for a minimum 78.98 this summer.

Because mid-May’s multiyear high at 3.11% precisely matched a target I’d sent out to subscribers five months earlier when rates were around 2.35%, I was open to the possibility that yields had made a major top.  This seemed even more likely when the Ten-Year Note plunged to 2.76% over the next 12 days. Now, however, a strong recovery rally has shortened the odds of a move to new highs.  is a  If it is coming, it would generate headwinds above 3.25% sufficient to slow the U.S. economy or even suffocate it, since rates for mortgages and car leases would rise as well. At the very least, based on the chart shown, Ten-Year Note yields look very likely to challenge the May high, since the target is actually 0.04 points above it. The rally could turn out to be a bull trap, either by forming a double top or, less likely, an upthrust to new heights that reverses precipitously. A third possibility is that, once above May’s highs, rates will continue to rise. Whatever the case, I will be monitoring this vehicle closely, since a move into the 3.25%-3.50% range would significantly reduce the flow of oxygen to the U.S. economy’s heart and lungs — i.e., housing and autos. ______ UPDATE (June 14, 9:14 p.m. EDT): Check out the $TYX.X tout above, since it recalibrates my thinking about where long-term rates may be headed. ______ UPDATE (June 17, 5:10 p.m.): Rates on the Ten-Year now look primed for a fall to at least 2.831, a compelling midpoint Hidden Pivot support shown in this chart.  However, if the support is breached decisively (i.e. 28.00 or lower), look for yields to fall to as low as 2.653 over the near term. _______ UPDATE (July 15): Rates on the Ten-Year have been flirting with the 2.831 support for nearly three weeks, trading as low as 2.811. The breach is sufficient that I expect rates to move sideways-to-lower this summer, and for the price of T-Notes to rise.

In the tout above, I wax mildly bullish on $TNX.X, a vehicle that tracks interest rates on the U.S. Ten-Year Note. This implies that I am bullish on rates and believe they will rise, but bearish on the Note itself, because its price would fall.  Now, with an insightful nudge from my friend Doug Behnfield, a Boulder-based financial adviser whose thoughts have been featured here many times, I am persuaded to take a closer look at both vehicles. Lo, the chart of $TYX.X, which tracks rates on the U.S. 30-Year Bond, reinforces a somewhat different conclusion — i.e., that long-term rates are headed lower, perhaps significantly so. (To embrace this point of view would make me a bond bull, since bond prices would rise rise as yields fell.) From a technical standpoint, the crucial number here is 2.994%. Rates look very likely to fall at least to this level. But if they easily trounce that ‘Hidden Pivot’ support, trading 2.970% or lower intraday, or if rates close for two consecutive days beneath the pivot, I’d infer that they are headed  down to at least 2.847%. At that level, the same observations would obtain: a quick and decisive breach would portend still-lower rates. I’ve set an alert and will keep you closely apprised, so stay tuned to this tout if you care. _______ UPDATE (July 15): I’ve adjusted my downside target to 2.874%, which is where I now expect rates on the 30-year to fall over the near term. The revision uses a one-off ‘A’ and yields a 3.007% midpoint support that precisely caught an interim low low. (It also offered a fine ‘mechanical’ short on the June 22 rally back up to the green line). Here’s the new chart.

The August futures set up such an appealing buying opportunity for bulls Monday that several subscribers jumped on it when a timely ‘mechanical’ entry strategy was posted in the chat room. Alas, anyone who got long toward the end of the day watched the trade sink precipitously overnight, stopping out the position for a loss of around $600 per contract. As a rule, when a juicy Hidden Pivot trade set-up flops so miserably, it can pay to quickly reverse the position and do the opposite. In this case, however, going short seems no more appealing than going long, since bullion has been treating bears almost as badly as bulls.

‘Too Much Hopefulness’

My gut feeling is that the seemingly perfect ‘mechanical’ entry failed because there are still too many hopeful bulls out there. It would appear that they view each and every $20 rally as the first stage of a move to $2000, and that’s why gold has acted so leaden.  Disrupting this familiar pattern and setting the stage for a sustained rally will likely require one last, brutal shakeout. That would logically imply a dive below the key low at 1230.70 recorded almost exactly a year ago.  If and when this happens, tune to the chat room for a possible ‘counterintuitive’ entry plan.

In the meantime, I plan to ratchet up my skepticism and tune out the “Any-day-now!” bullishness of some of my guru colleagues. I’ll let the charts speak for themselves. This might have saved us some pain, since I green-lighted Monday’s trade even though gold had yet to exceed a 1274.40 benchmark flagged in my last update. For now, I will raise the bar to  1286.90. A rally over the next 2-3 days that hits that price would not likely be a fake. _______ UPDATE (July 17, 9:22 p.m.): The futures sank beneath 1230.70, hitting a low of 1226.30 without a blip. A print at 1263.10 would still trip a ‘counterintuitive’ buy signal, although not a very appealing one. As such, we should plan on using a ‘camouflage’ trigger to get long on a chart of lesser degree if the CI trade triggers.