The chicken-hearted poke above p=347.92 that ended the week was unconvincing for anyone hoping the 363.15 target with which it is associated will be achieved. Price action at the midpoint pivot is always crucial to such assessments, and the action so far says the bull cycle begun from 332.68 on 6/18 is weakening. Despite this, my expectation is that the Dow will get pulled higher by the lunatic exuberance of some of the other indexes, notably the S&Ps and the Nasdaq. If the effect is strong enough, it would generate a two-day DIA close above 347.92, an event that would warrant shifting our focus toward 363.15, a modest, 4% climb from here.
Gold's price action lately has grown too defiant of logic and even rationality to merit diligent attention. The futures got crushed for a week in mid-June, but now sellers can't even push it down to a minor 'D' correction target. Instead, the August contract rallied on Friday, presumably gratuitously, to within an inch of a level that would negate the bearish pattern. I've set an alert at 1826.50, a tick above an external peak recorded June 16 on the way down. That's where the bullish case would become, if not compelling, then at least very faintly appealing. We might also look to get short using a 'reverse ABC' set-up if the futures make it up into the range 1810-1820. My point 'a' for the trigger pattern would be 1776.30, equal to a peak recorded at 10:00 a.m . June 29 on the hourly chart. (For a bigger picture that is bearish short-term but bullish long-term, check out the current commentary, So Maybe Gold Actually Does Suck.) ______ UPDATE (Jul 6, 5:27 p.m.): The short trade suggested worked perfectly and generated a relatively quick, easy profit of around $2600 on four lots. A few subscribers reported getting aboard, some by interpolating with other gold vehicles, and covering at the red line as suggested.
As usual, silver's chart is more encouraging than gold's, but not much. The impulse leg shown in the chart is legitimate, but we should want to see two further signs of health before we allow ourselves more encouragement. First, the spasmodic rally that tested bulls' patience on Friday needs to exceed the 'D' target at 26.77; then, with no pussyfooting, the futures must surge above the 27.36 'external' peak I've highlighted in the chart. Otherwise, expect more tedious ping-ponging between uninspired bulls and enfeebled bears. ______ UPDATE (Jul 8, 10:35 p.m.): This one is for rABC-savvy traders only, since I am not about to advertise its proprietary details explicitly. Suffice it to say, p=25.69 in this chart is ideally situated in the discomfort zone to set up an rABC long that I rate '7.9'. Try a=25.94 (7/8 at 3:00 a.m.), and don't hesitate to give it a second try if you get stopped out. ______ UPDATE (Jul 9, 8:18 a.m.): So far no trade,, since the futures must come down to at least 25.70 to enable the rABC set-up noted above. The potential opportunity remains viable.
The bull market's relentless ascent has settled into a short-squeeze groove that is duplicating the steep, ratcheting trajectory of April. There is bullish buying power behind it, but the rally's main driver is short-covering by traders who quite evidently have been trying to pick tops every millimeter of the way. That's apparent in the inset chart, which highlights a protracted series of very minor tops. Notice that there are relatively few dramatic upward spikes, other than the occasional goosing needed to trigger explosive bear panics. Your editor and a subscriber whose chat room handle is 'Som' were among those trying to pick a top on Friday with technically derived targets at, respectively, 4341.75 and 4342.75. The subscriber's short alone survived because it was judiciously tied to a closing-basis stop-loss above where the futures settled. Whether it survives holiday trading Sunday evening and Monday remains to be seen, but the trade will have been a game try in any event. If it is stopped out, here's a chart with a new rally target at 4413.75 that would become our minimum upside objective for the near term. The pattern is gnarly-beautiful enough that we should expect it to work well for purposes of trading or forecasting. However, I will be on the alert for a possible reversal from around 4365. That is not a Hidden Pivot, but rather the visual middle of the void between p2 and D. We are doing more and more trades using this 'discomfort zone', simply because the quants, yahoos and reprobates we compete against for profits have taken too avidly to the more obvious ABCD patterns. ______ UPDATE (Jul 6, 5:13 p.m. EDT): The short position entered Friday at 4343.75 was showing a profit of about $2000 at the low of today's swoon. I posted informal guidance
I was premature when I gave the green light to gold bulls five weeks ago. "If you’re a bullion investor," I wrote at the time, "you can buy the stuff now without fear or qualm." Had you taken this advice, you'd have gotten aboard just in time to get smashed in the head, since gold was about to have its worst week in six months. I made my recommendation seem even more foolish by running it under the headline Gold Really Sucks. Here's Why. This was just a ploy to grab the attention of gold bulls, since the commentary itself, as readers soon realized, was quite bullish. So what changed my mind? I'd like to say that fresh evidence on the charts swayed me. In fact, I actually ignored a flashing-yellow signal early in March, when GDX, the gold miners ETF, breached a key low at 31.22 from nine months earlier. This is shown in the chart, and it created a glow-in-the-dark 'impulse leg' that was unmistakably bearish. Unfortunately, my focus was elsewhere, mainly on a few subjective factors that were bound to mislead anyone looking for a long-elusive ray of sunshine in precious metals. For one, I noted, bitcoin was finally getting its comeuppance, presumably freeing up speculative energy for bullion. And for two, there had been no vicious takedowns in gold recently, ostensibly because the bad guys finally realized it was time for gold to start discounting the rising crescendo of inflation fears. I was wrong on both counts, for gold and silver were about to get hit with their steepest two-day sell-off since November. Further selling mercifully stalled, but the jury is still out on whether another wave is coming. Rallies Died It took an email from a correspondent to open my eyes to the bearish reality
I've moved the point 'A' low of the recent pattern down a notch, a change that has effectively raised the short-term rally target by 30 points to 4339.00. The pattern is gnarly enough that you can short there with a tight stop, but I am recommending this only to subscribers who have made at least a few bucks on the way up. A pullback to p=4232.88 can be used to get long 'mechanically' in the meantime, even if the requisite swoon seems unlikely. A bid there would take a stop-loss at 4197.25. One last possibility: shorting p2=4285.94. I'd suggest using a 'reverse ABC' pattern to accomplish this, with an a-b segment no longer than 30 points. That would imply initial risk of around $375 per contract. _____ UPDATE (Jun 28, 10:25 p.m. ET): Mr Market is toying with us, pussyfooting all day long just a tad shy of the 4285.94 print we need to set up the short detailed above. It seems clear that he will continue to jack us around, stopping the short out two or three times if he has to, if I continue to insist on using a piddling 30-point a-b segment to get the trade rolling. However, when I give the 'x' trigger more room with this 93-point 'a-b', and then plant my 'c' high at today's 3282.00 peak, it would trip a short at 4258.50. Thereafter. a successful trade would have to fall to at least p=4235.38 from there so that half the short could be covered, and you can judge for yourself whether that looks likely. In so doing, we are not applying any explicit rule or set of rules, but rather a visually intuitive judgment that looks like a winner. (I rate the trade a succulent '7.8' -- not bad for a night's
Gold's less-than fascinating struggle to hold above an important midpoint Hidden Pivot at 1775.00 and a shelf of structural support constructed back in April has entered its second week. My gut feeling is that both will give way, sending the August contract down to p2=1702.80. But even if the futures were to rally instead, a move touching the green line (x=1847.10) would trip a somewhat appealing 'mechanical' short with a stop-loss at 1920.00. We'll want to attempt bottom-fishing if and when the Auggies fall to p2=1702.80, so stay tuned to the Trading Room if you're a player. Bulls looking for a glimmer of hope should set an alert at 1826.50, just above an 'external' peak recorded June 17 on the way down. _______ UPDATE (Jun 29, 10:20 p.m.): Here's a smaller bearish pattern with an interim downside target of 1739.40. A rally to x=1783.30 would trigger a weak 'mechanical' short, meaning it should be initiated only via a 'camouflage' set-up that reduce the implied risk of nearly $6000 on four lots. ______ UPDATE (Jul 1, 6:40 p.m.): The trade worked out perfectly, producing a $6000 gain in just a couple of hours. Shorting at 1783.30 would have been low-stress, since the futures never went higher than 1783.40 (!). As for covering the short position, the opportunity to do so came quickly and easily via a $15 plunge that followed the 1783.40 peak. Here's a chart that shows how the trade evolved.
Silver's tiresome slog since December in a $6 range should have worn out bears by now, but truth to tell, bullish support has been irresolute, if not to say feeble. Bullion would be soaring these days if everyone were as certain as a thousand 'experts' and the news media that rampant inflation is coming. Do Powell and some other unlikely dissenting voices perhaps have it right when they say the worst has been discounted by stocks and other assets, and that reckless fiscal spending growth has peaked? From a technical standpoint, the only appealing trade on the immediate horizon is a lowball bid at 24.33, the 'D' target of the pattern shown (see inset). The strategy has been a non-starter so far, though, since the July contract has not even traded below p2=25.47. Reversals precisely from p2 are 'supposed' to exceed 'C', negating the patterns themselves. In this case, however, the sharp bounce we might have expected has failed to materialize, casting doubt on the likelihood of a powerful rally. On balance, I am moderately bullish, but also bored half to death. My wake-up alert is at 27.33, just above an external peak of no particular distinction.
Quite a few who were late to the party are now bag holders who paid $45k, $50k, $60k or more for a piece of the action in the hottest speculative vehicle of them all. Now a good many of them must be praying for an opportunity to escape significant loss. It is their desperation that will congeal and harden into thick layers of supply between here mid-April's record high near 64,000. My gut feeling is that bitcoin will have to punish bulls for yet more weeks, or even months, with a dip into the low 20,000s to set up the next big rally. It will be supported not so much by wild-eyed buyers, whose ranks will have been thinned by May-June's 54% plunge, but by the reluctance of those who got on board for relatively small change to sell an investment they confidently believe will trade for $100,000 or more. Whatever happens, calling the swings in this banshee has not been rocket science. This was demonstrated last week when a 35,433 correction-rally target disseminated to subscribers Sunday evening came within 1/100th of a percentage point of nailing the exact high of last week's nearly $4000 plunge. Skeptical? Spend some time in the Trading Room and monitor the targets yourself. _______ UPDATE (Jun 30, 8:44 p.m. ET): A feeble blip tripped a feeble buy signal predicated on minimum upside to p=36,129, shown in this chart. As always, an easy move through it would portend more strength to p2, in this case 37,164. ______ UPDATE (Jul 1, 6:52 p.m.): Bulls squandered a promising impulse leg, hinting that they are too weak to deliver. I'm still as bearish as I was above, but too bored with bitcoin's pointless antics to elucidate why, let alone waste time calculating minor targets.
Fear of the much-ballyhooed Delta variant was nowhere in evidence recently at North Carolina's McCormick Field, home of a minor-league baseball team called the Asheville Tourists. The team, a high Single-A farm club operated by the Houston Astros, filled McCormick's 4000 seats to near-capacity, and there was nary a mask in sight. It was great baseball, which turns out to be the perfect antidote for non-stop Covid doomsday-porn emanating from Fauci's office and amplified to a deafening pitch by his ignorant, Great Reset-obsessed lackeys in the news media. As fans of the game might expect, it featured entertaining highs and lows just like the majors. A towering pop-up above second base attracted enough fielders to catch a swarm of fireflies; instead, they caught nothing when the ball dropped between them. But a runner on first base looked even worse when he failed to keep running past second base even though there were two outs. The defense redeemed itself with a spectacular diving catch in the ninth inning by the Tourists' center fielder -- a risky effort, considering there were no men on base and his team had a four-run lead. Afterward, a terrific fireworks display sponsored by chain-grocer Ingles, rocked the neighborhood. 'Delta' Thrives on Ignorance For the good of America, Fauci and his Goebbelsian PR crew should take in a few baseball games this summer. Otherwise, they'll continue to work overtime trying to convince us that 'Delta' is the most menacing development in all of history. But when was a virus variant ever more deadly than the original strain? If this were so, the variant, even if it tends to spread more easily, would quickly extinguish itself by killing off the host. Under the circumstances, how dangerous could it actually be, given that more than 99% of those who
