Rick Ackerman

It's been a while since gold took out any important lows on the hourly chart, but the Comex December contract was close to doing so late Monday night. This has caused the daily chart to become fairly oversold, although that doesn't necessarily mean the futures are about to reverse and trampoline higher. Rather than try to catch a potential falling piano, we'll give the correction time to shake out fair-weather bulls before we attempt to get on board. Regardless, a bottom-fishing trade in GDX that was posted (with chart, at 12:19) in the Coffee House can give us something to do without risking too much.

Interest rates on the Ten-Year Note still have a long way to fall if they are going to achieve the 0.73% target shown in the chart (see inset).  Although it is mildly bullish that they have bounced from well above the 1.30% Hidden Pivot target given here earlier, the rally would have to hit 2.18% to turn the weekly chart bullish. For now, though, we'll need to respect the uptrend because it has in fact turned the daily chart bullish via an impulse leg surpassing two prior peaks recorded last month. If without pausing for breath it exceeds a third at 1.79% that occurred a month ago, that would imply the upward skew in rates is about to get legs, presumably with a move to at least 2%. We'll spectate for now, but our goal is to get short when it looks like it's about to sputter out. _______ UPDATE (Sep 12, 8:40 p.m.): This morning's trampoline bounce sent rates on the 10-year into a steep climb, surpassing the 1.79% benchmark noted above and generating a quite-bullish impulse leg on the daily chart. We'll need to see a correction before we try to determine whether this rally is likely to get legs, but it is strong enough already to suggest that the 1.43% low will endure for a while. _______ UPDATE Sep 18, 11:15 p.m.): A rally that touched this green line has signaled more upside over the near term to at least p=1.86% and possibly as high as 1.98%.

Ordinarily, the growing stench from WeWork’s impending IPO would be enough to unnerve Wall Street. Instead, DaBoyz have pushed the Dow to within 2.4% of record highs. This dubious achievement is particularly impressive because China and Europe are sinking into recession, and because the Fed's desperation is starting to show. The Masters of the Universe owe their hydraulic success mainly to cyclical forces and to short-covering that has accompanied every tariff-war tweet that could be construed as remotely bullish. Be skeptical that the stock-market run-up begun in mid-August will persist until October, when trade talks are scheduled to resume. If you treat each upthrust between now and then as stage-managed distribution, you will not likely regret it. The Manure Sector In the meantime, it’s hard to imagine that the sinking valuation of WeWork’s IPO is other than a sign that the party is over. The company, which sublets offices mainly to millennial techies in big cities, has been under close scrutiny for the wheeling and dealing of its CEO, Adam Neumann. Such is his brazenness that it has knocked the stuffing out of a $47 billion valuation achieved last spring in the usual private hands. Now, the keister bandits who manage IPOs are hoping for a $20 billion valuation amidst mounting suspicion that even that may be much too high. The resulting discouragement has taken a heavy toll on the manure sector, including the very-high-profile shares of Uber and Lyft. With unicorn stocks falling like bricks, can a comeuppance for the FAANGs be far off?

I'd suggested bargain hunting if GDX pulled back on Friday, but the correction was steeper than I'd anticipated. Even so, if you bought calls toward the end of the day as advised, you were in at prices that were just a fraction of what some had paid when GDX was peaking on Wednesday. I am not establishing a tracking position because reports of fills by subscribers were vague. However, if a rally allows you to exit some of your calls for 30% more than you paid for them, you should do so. Alternatively, if GDX continues to fall, breaching the 27.61 low recorded on 8/19, we'll consider a 'counterintuitive' buy. Stay tuned to the chat room for further guidance on this. _______ UPDATE (Sep 10, 9:02 p.m. ET): We took a flyer on the CI trade noted above, but it proved to be a dud, and so I suggested exiting it for a small loss of about $15 per round lot. We'll back away for now, since GDX looks like it needs more time to base for the next rally. _______ UPDATE (Sep 16, 9:08 p.m.): GDX has been base-building as anticipated. I'll be more enthused about buying if it breaches the 26.04 low in the chart, but please note that a print at 27.83 would trip a theoretical buy signal for a shot at 31.52. (120-min, A= 26.04 on 8/1). ______ UPDATE (Sep 18, 10:24 p.m.): A moderate rally has tripped the buy signal noted above, but without generating any heat on the follow-through. I'd suggesting spectating for now, subject to whatever opportunities develop intraday.

The futures ended the week playing patty-cake with our 2983.75 rally target, a minor one. The next lies at 3006.75 (see inset, and notice the gnarly one-off 'A' ), but because the pullback so far has been very shallow, I doubt the Hidden Pivot resistance will contain the futures for long if they get off to a strong start this week. Even so, if you are able to book even a small profit trading from the long side between here and 3006.75, use some of it to cushion a stop-loss at 3008.25 after shorting 3006.75. ______ UPDATE (Sep 12, 9:06 p.m.): I've lowered the point 'A' of the rally pattern to give this move a little more room. If the futures end the day above the new target at 3025.25 or trade more than 10 points above it intraday, they'd be warning bears to get out of the way. A bullish tweet on China over the weekend would tell us that Trump is having his little joke on Wall Street, playing DaBoyz the way a kid plays a pinball machine.

Gold's rallies have been generating successively less-overbought peaks on the daily chat (see inset), implying buyers are running out of steam and that distribution is creeping in. We'll adopt a mildly cautious stance for the time being, monitoring price lows on the daily chart for signs of similar divergences, which would be bullish.  The 1622.90 rally target given here previously remains valid in theory, but it would be negated if the correction exceeds the 1488.90 low (aka point 'C') recorded on  August 13. Bulls got sandbagged when last Wednesday's rally to 1566.20 reversed punitively after poking above a 1565.00 peak notched nine days earlier. That is why the retracement is likely to last for at least a few more days. Caveat emptor for now. _______ UPDATE (Sep 10, 9:28 p.m. ET): A breach of C=1488.90 looks imminent and would negate the 1622.90 target. Ordinarily I'd suggest using a 'counterintuitive set-up to get long after such a breakdown, but my hunch is that the rally won't get very far. We'll spectate for now, but stay tuned to the chat room, since the picture could change.

DaBoyz have gotten quite a bit of mileage out of a planned meeting in October between trade representatives from the U.S. and China. There are times when the same news would have laid an egg, but this manifestly is not one of them. Cyclical forces are at work, fueling a short squeeze whose bullish impact on stock prices seems exaggerated relative to whatever economic effect a face-saving trade agreement itself is likely to generate. We might have scoffed a month ago at the notion that a bear squeeze could push the broad averages to new all-time highs with the economies of Europe and China sagging so badly. But the Dow Industrial Average is now within 2.5% of a new record -- close enough that it will be magnetically drawn toward the old peaks if it finishes the week with a further gain of perhaps 250 points.

DaBoyz have goosed index futures Wednesday night on ginned-up news about trade talks resuming again in October. Raise your hand if you were unaware that the talks had stopped in the first place. Regardless, renewed 'optimism' about the outcome of the tariff war has once again sent shorts scrambling for cover. It has also reversed a two-day rally in gold, which has held up well despite having to swim upstream against the bullish mindset on Wall Street.  Check out my target for the E-Mini S&Ps (below) if you want to see how high the S&Ps can go over the next day or so. An easy move past the target would imply that there is still significant buying power percolating beneath the surface.

Trade-talk 'optimism' has sent index futures into their umpteenth short-covering spasm Wednesday night, putting in play the 2983.75 rally target shown. It is all but certain to be achieved, demonstrating yet again the enduring hold that tariff blather has on investors. They evidently care about little else, which is ironic, since it is highly improbable the talks will yield substantive results. I had suggested earlier that we get short on the news, but the news has dribbled out and been regurgitated perhaps a dozen times in a way that leaves the door open for yet more trade-talk blather. Tonight's headline says merely that the talks will resume again in October. Big deal, right?  Regardless, it has added tens of billions of dollars to the value of shares, providing cover for institutional holders as they to continue distributing stock to the gullible. _______ UPDATE (Sep 5, 9:23 p.m. ET): The top of Thursday's 48-point rally slightly exceeded the 2983.75 target noted above, but the shallow pullback that has followed implies buyers are not yet finished. If they follow through on Friday, use the 3006.75 target shown in this chart as a minimum upside objective. You should also allow for a possible stall at 2998.75, the secondary pivot of a much larger pattern.