There is little point in getting all worked up about technical subtleties at the moment, since the very simple key to the chart shown lies in bulls’ conspicuous failure to surpass the 2744.25 peak after three weeks of trying. Even if they are able to get past it in the week(s) ahead, that would not mitigate the obvious weakness they have displayed so far. Presumably, their ability to make headway after doing so would be very limited — almost certainly falling shy of new record highs.  Bears are wholly enfeebled as well, so get ready for a potentially long, boring stretch that will satisfy no one. If, in a year, the broad averages are trading about where they are now, don’t be surprised. _______UPDATE (May 21, 5:39 p.m.): A day of huffing and puffing failed to lift the futures above the key peak noted above. DaBoyz may succeed at this in the days ahead, but don’t be impressed with their bluff unless bears lose their cool. Short-covering is what pushes markets through ALL significant resistance, and it can never be ruled out entirely.

Is gold headed below $1000?  I doubt it. Like every other bullion investor who has tired of watching gold’s price meander sideways for nearly six years, I’ve grown increasingly disappointed and frustrated. But also concerned, as many apparently are, that one last, hellish plunge may be necessary to shake out the weak hands. However, looking at the long-term chart, I’m persuaded that bulls still have the edge, if not a big one. That’s because the ‘impulsive’ leap gold took between October 2008 and August 2011 was so powerful, pushing the price of an ounce from $680 to $1912. Although the subsequent retracement took 70% of it back with the $1046 low that occurred in December 2015, bears have been challenged ever since to win the skirmishes that prefigure changes in the long-term trend.

By my analysis, gold ‘should have’ fallen to $821 at its correction low.  It could still get there, and that target will remain valid in any event until such time as 1432.50 is exceeded to the upside. But there is nothing in the chart that implies bulls are going to give up that much ground. To the contrary, they took a shot across bears’ bow with a $328 thrust in 2016 that tripped a theoretical long-term ‘buy’ signal at the green line (see inset).  The move exceeded no fewer than four ‘external’ peaks on the daily chart, and that’s why the bad guys have struggled so hard to push gold back down. They may be able to crush the spirit of bulls, and to do so repeatedly. But this is not the same as crushing prior lows that continue to provide ‘structural’ and psychological support on the long-term charts.

Set an Alert at 1208

If you want a warning signal that the tide could be turning in bears’ favor, simply watch for downtrends that exceed two or more prior lows on the monthly chart without a significant correction. At the moment, that would imply a sell-off exceeding 1208.60.  Even that wouldn’t necessarily mean gold is headed below $1000 — only that we should be especially mindful of downtrending abcd patterns on the lesser charts that start to exceed their ‘d’ targets. That would be warning that the bear is gaining the upper hand. We should also watch for ABCD uptrends that fail to reach their targets. This has actually been happening, and it needs to be monitored. But the effect is not so pronounced as to suggest any more than chronic-but-not-fatal fatigue on bulls’ part.  One more thing concerning the big picture:  Gold would need to push above 1662 to suggest that a move to the 2278 target is likely. That is a midpoint Hidden Pivot, and unless 1046 is exceeded to the downside, it will remain crucial to price action in the months or even years ahead.

The Dollar Index has rallied for three weeks without a significant correction, raising the odds that April’s 89.23 low could turn out to be a very important one. Notice as well that the dollar’s romp has exceeded numerous prior peaks, including no fewer than one ‘internal’ and two ‘externals’ labeled in the chart. From a ‘Hidden Pivot’ perspective, this defines the rally as a powerful ‘impulse leg’ — i.e., one with the presumptive moxie to generate another once the inevitable correction has run its course. The technical implications would be even more significant if buyers are able to push this vehicle past yet another ‘external’ peak without correcting along the way. The number to watch is 94.22, where DXY apexed in December.

I’m monitoring the dollar’s vital signs closely; for if the bull market begun in March 2008 has resumed, then, as I wrote here earlier, “everything is about to change — and I mean everything. A strong dollar would surely flatten exports, raising trade-war paranoia to a shrill crescendo. But the main effect would be deflationary in that it would tighten the noose around the throats of all who owe dollars.  Could the stock market move higher in such an environment?  Stranger things have happened, but it seems most improbable.” _______ UPDATE (May 10, 8:11 p.m.): Sellers overshot a clear Hidden Pivot support at 92.58 (15-minute, a=93.42 on 5/9), but not by much. Let’s see if bulls can get traction here.  It would start with a rally exceeding 93.10, equal to a minor peak made today on the way down. _______UPDATE (May 13, 10:10 p.m.): Any lower will produce a breakdown and a new short-term target at 91.96.  Click here for the chart. UPDATE (May 15, 11:33 p.m.): Bulls are back in charge and with a nice single bar C (click for updated chart) could start to make some serious gains to the upside. Keep an eye on the LTTL peaklet 93.56. _________ UPDATE (May 20, 6:44 p.m.):  Here’s a new chart that shows how the Dollar Index could romp to exactly 94.51 if and when it gets past a 93.82 midpoint Hidden Pivot resistance that stymied buyers as last week ended.

Earlier, I wrote here that a decisive push by crude above $70 would be warning of possible war in the Middle East. The June contract is at that threshold now, seemingly driven in recent days more by speculation over whether Trump will ditch the Iran nuclear deal than by escalating tensions between Israel and Iran. It’s possible that both factors are about to drive crude prices to levels not seen since 2014.  The NYMEX contract shot up as high as 70.84 on Monday before receding by more than $2 a barrel later in the day. Whatever the reason for the reversal, it would be premature and unwise to conclude that peace and good will are about to break out in the Middle East. In fact, from a technical perspective, June Crude’s slight move past $70.21 early in the session was nearly sufficient to put an 82.51 target in play (see inset). All it would take to make that ‘Hidden Pivot’ resistance an odds-on bet to be reached would be a two-day close above 70.21. The stock market may be able to shrug off rising interest rates, at least for a while, but bulls are going to wither fast if crude is on its way to 82.51. _______ UPDATE (May 9, 8:50 p.m. EDT): The gnarly pattern shown in this chart yields a 72.88 target that you can use a minimum upside objective for Thursday.  If it’s easily exceeded, take that as a sign still more upside impends. _______ UPDATE (May 10, 8:17 p.m.): The 72.88 target is still viable.  It also looks capable of producing a precise and potentially tradeable reversal, give or take a few cents.________ UPDATE (May 13, 10:54 p.m.): The futures have fallen without hitting the 72.88 rally target, but it remains viable nonetheless.  Now, the breach of a minor ‘hidden’ support at 70.30 would augur more downside to at least 70.01, but any lower would begin to shift the odds on a quick move up to 72.88. UPDATE (May 17, 12:24 p.m.): Drilling down into the daily all signals point to higher prices. We had a nice bounce of p confirming a daily pattern corresponding with 73.88 being the next stop. 

It would have suited my dour economic outlook perfectly if AMZN had laid an egg when earnings were announced after Thursday’s close. The stock had already fallen more than 150 points in the days preceding the news, and there seemed to be little chance that it would reverse and surpass two peaks recorded in March. I’d said that such a move above would revive the flagging bull market, but my heart wasn’t in it.  Better that the stock should continue to fall, reinforcing my gut feeling that the bull market begun in 2009 is over. Kaput. Finito.

Instead, when the earnings hit the tape, AMZN erupted like Vesuvius, rocketing 249 points, or 16%, from the previous day’s low in mere hours. What are we to make of this?  I’ve heavily promoted the idea that Amazon is the best proxy we have for the so-called smart money — a window into the thieving, rapaciously greedy minds of Wall Street’s best and brightest. I have also long regarded the stock as the perfect bellwether for the U.S. economy — even moreso than GM during its heyday more than a generation ago.

So where to next?  My gut feeling is that AMZN’s rally into record territory is Mr Market’s way of setting the hook so that neither bulls nor bears will escape when the bear market, which may already have begun, comes a-roaring. It is practically unimaginable that the broad averages could keep pace with AMZN and some of the other lunatic stocks for long.  Something’s got to give, and my guess is that the stock market will drag the wack-o stocks down rather than be pulled higher by them. In any event, you should use the 1699.04 target shown as a maximum price objective for the near term.  There is no way the stock will push past it by much — certainly not on the first try.  When AMZN subsequently falls, that’s when we might expect to see the broad averages keep pace or even  lead the way lower. _______ UPDATE (May 3, 5:39 p.m. EDT): I still view AMZN as the most important bellwether for the bull market begun in 2009. In that regard, there is nothing bearish about this chart — other than the suspicion that last week’s marginal new record high would be a terrific way for Mr Market to set the hook for disaster. Regardless, we’ll continue to look at the impulse leg and pullback that have occurred in the last week as we always do. That implies, for starters, that the 1699.04 target will remain valid until such time as C=1346.25 is exceeded to the downside.________ UPDATE (May 13, 11:03 p.m.): AMZN has been curiously subdued lately — not just low-beta, but actually falling slightly when the broad averages have rallied.  Maybe its canny handlers are simply taking a breather?  In any case, the bullish trajectory of the hourly chart remains visually compelling, even if it flattened slightly over the last to weeks, and it would take a print below 1508.00 on the ‘hourly’ to become even mildly worrisome.

It was back in December, when rates on the Ten-Year Note were hovering around 2.35%, that I first projected a move to as high as 3.11%.  Now, just a small turn of the screw will satisfy that target.  Some seers have said that anything above 3.00% will turn the economy to sludge, but I’d prefer to see a little higher — perhaps 3.25% — before I blow taps for the aging bull market. Notice the ‘external’ peak at 3.22% near the leftmost edge of the chart. If it is surpassed by the same upthrust that reaches our 3.11% target, the move would be warning bond bulls to stay out of the way. It would refresh the impulsive energy of the weekly chart, implying significantly higher yields and lower prices for T-Bonds and Notes. ________ UPDATE (May 20, 6:53 p.m.): The Ten-Year rate has pulled back, moderately so far, after topping last week within 0.05 points of the minimum upside target I drum-rolled here six months ago.  It may be a little while before we can determine whether the top will turn out to be a very important one, but my gut feeling is that still higher rates are coming — enough to put a good choke-hold on the U.S. economy.