Brian Catalucci

The DOW remains in a broad trading channel currently ranging between 28,000 on the top and as low as 18,000 on the bottom side. Consider bonds are 10 to 1 in size compared to equities globally.  Just a small amount of money coming out of bonds will blow the stock market through the roof.  How can the stock market rise with rising interest rates? Remember, interest rates always rise in a bull market and drop in a bear market.  Interest rates have even been taken into the negative just to support a bear market. So we could certainly see rising interest rates and rising equity markets together in the coming years. The talking heads are going to talk this market down by claiming rising rates are bad for the stock market. This will set up the consolidation period we need to base before we lift off as shorts pile on and will need to cover thus providing the fuel needed to take this market to the next level.  This bull market will not end until the retail/public have jumped in and so far we have no sign of that. A dollar rally is still in play so we could have what appears to be a flat equity market but foreigners will see the DOW rally in their currency. A stronger dollar will attract foreign capital into the U.S. markets and foreigners will not be as confused by rising rates as investors in the U.S. will be from television propaganda. This bull market will not end until DOW 40k and possibly higher.

 I've been saying for quite some time now that gold is not yet ready to take off. There are still too many gold bugs clinging on for hope after all these years and not until the last one has thrown the towel in will this gold bull market resume. What will make the last gold bug throw the towel in? Imagine the media generated hysteria if gold were to breach the psychological sub-$1000 mark. The front page of Time Magazine would declare gold dead. Interestingly this sub $1000 target happens to be neatly sandwiched between two weekly P2's.  I'm guessing if we were lucky enough to get such a move down that it will happen by the end of this year and it will be a back up the truck opportunity.  Only taking out $1434 to the upside would negate this downside target. Either way we are not yet ready for prime time.

Altaba may interest some of you river boat gamblers out there. Altaba is what's left of the former remnants of Yahoo and now acts only as a holding company. Altaba owns a significant stake in Alibaba (BABA) and Yahoo Japan. If Altaba sold all it's assets according to https://www.altaba.com/ they are currently trading at a 26% discount to NAV. Without getting into the nitty gritty details as to why this NAV gap exists let's just say it has to do with uncertainty surrounding how taxes will be treated on the sale of these underlying assets.  BABA's weekly chart looks to be moving higher and this should pull AABA with it. UBS analyst Eric Sheridan issued a Buy rating in February and a $98 price target. If I were employed by UBS my target would be $100. After all who would take me seriously if I had a price target of $99.60?

We've been discussing Bonds lately and rightfully so as the fate of the entire economy awaits the direction Bonds will take at this proverbial important fork in the road. Although we could go long TBT (the inverse ETF of TLT) I find this TLT pattern to be much clearer as the b-c is short in duration, violent and of course single bars. Just like a good driver will always watch for activity much farther down the road than what's immediately in front of the car, a good pivoteer will look at how things could potentially play out and be prepared to enter a trade if such a scenario came to fruition. Ideally we would get a bounce in TLT and take us close to c at which point you can look to hop on board an a-b-c pattern down or just mechanically get short. If you are looking to do something fancy with options (perhaps a vertical put spread?) look for advice from our resident options guru mavin 1 on how you might play TLT short.

Once considered the darling of the gold mining growth stocks Yamana has been left for dead after a brutal and relentless 4 year decline. While bitcoin and the general markets are garnering all the attention now would be the time to start accumulating the unloved gold miners. Our first clue that a turnaround was in the works was when the monthly p at $2.16 was missed by pennies and this has been followed by an impressive impulse leg on the daily. Things are starting to look interesting now. When the next leg of the gold bull market commences Yamana will surely resume its role as the Jewel in the golden crown.

February saw the worst decline since 2016 and March kicked things off with another shellacking. Although the direction points lower in the near term we are still within the primary channel established starting in 2016. The top of the lower channel lies at 24100 and a break below this will imply a move down to the 21,700-22,000 area. Rising interest rates and tariffs seems to be the prevailing excuse for this correction. Naturally this is nonsense as the pundits always need to assign a fundamental reason to try to explain every move logically.

Shares of embattled FE (First Energy) soared a month ago on news of a $2.5B equity investment by activist Paul Singer's Elliot Management. Is this turnaround after nine years of relentlessly grinding lower the real deal? No need to guess as we can use our Hidden Pivot techniques to identify underlying strength of any financial instrument long before it's clear to the rest of the masses. One such tool in our bag of technical tricks is we are sensitized to turnarounds at P2 -- and so far so good for FE. A move to $37.05 (as shown on chart) would create a subtle but powerful impulse leg. Keep an eye on this one in the chat room for early signals in lesser time frames (this one also happens to pay a 4.36% dividend!) [Tout prepared by David Isham]

Are you looking for a place to park your parents' retirement money while earning a dividend?  The XLU (SPDR Utilities) has pulled back since it made its all time high in November, but no damage has been done on the monthly and we are well within the visual channel. Using a one-off A and a confirmed reaction at P we can clearly see where this is headed. While you are waiting for the D target why not earn a 3.43% yield?  This is a multi-year play so set your trading parameters and expectations accordingly. [Tout prepared by David Isham]