T-Bonds have been treading water since Trump took office. His eagerness to stimulate growth with a gusher of fiscal spending and consumer credit has increasingly weighed on fixed-income markets. However, this has been more or less offset by the President's ability to attract buyers of Treasury debt from outside the U.S. The chart says this precarious balance is about to end with a fall in bond prices and a corresponding rise in long-term yields. At a minimum, TLT is headed down to the red line, a midpoint Hidden Pivot support at 78.05. If yields on the long bond were to rise commensurately, they would hit 5.33%, up from a current 4.79%. That might not seem like much, but it would squeeze the last breath from a consumer economy already suffocating from debt fatigue and persistent inflation. The already shaky housing and auto sectors would collapse, presumably led by a stock market that is filled mostly with hot air. Nor are there any guarantees that the red line on the chart will hold. If it doesn't, and TLT falls to the next logical plateau at 62.23, the damage this would do to the U.S. economy and to our way of life is distressing to imagine. Any spike in rates would be short-lived, since it would quickly deflate the economy into deep recession. Since this would be fundamentally a deleveraging event, investors should not be looking for opportunities at this moment; rather, they should secure their capital in safe-haven assets such as Treasury paper, bullion and utility companies with strong dividend histories. The burgeoning healthcare sector's ability to withstand hard times is not a given, since it thrives now only on the illusion of prosperity.
Friday's dirge provided yet more evidence that the bull is dying. With weekly options expiring, even undercapitalized pishers can do 100,000-share conversions and reversals all day long without risk. And yet, for all the phony volume, the day was over by mid-session, when the E-Minis peaked three-hundredths of a percentage point shy of a 6907.50 target that had been drum-rolled here for nearly two weeks. It was nearly seven weeks in coming, and so we might have expected a significant reversal when it was hit. Instead, the futures fell a measly 40 points, caught a tired bounce, then leveled off for the rest of the day. I hesitate to say a top is in, much less the top. But if the irresistible force that has been pushing stocks skyward since 2009 re-emerges on Monday, as is likely, be prepared for more-of-the-same up to at least 6925.00, a Rick's Picks voodoo number.
Microsoft spent the last two days of the week churning a weak 'mechanical' buy signal. It is considered weak because the pullback to the green line where we typically do our buying followed a high along c-d that barely reached the midpoint Hidden Pivot, let alone the 'sweet spot' midway between p and p2. How the stock treats the signal has consequences for the broad averages, since the company trades with a value of around $3.6 trillion. If MSFT dips below c=464.89 without punching through p, that would add to the evidence that stocks are in a bear market.
Last week's tedious scuddle left the futures on-track for a run-up to at least 4347.30 over the near-term. This Hidden Pivot resistance is just a weigh station en route to the 4529.80 target of a much larger pattern given here earlier. The D target of that pattern is 5126.10, the first I've identified above $5k. I expect potentially tradable resistance at 4347.30, but if buyers punch through it easily, that would shorten the odds of an eventual move to the higher targets given above.
Although Silver broke out around mid-morning on Friday, it spent the remainder of the session idling in a shallow pullback. This behavior reflects the preference of strong, confident buyers who could use a little rest. The quiet end to the week was deceptive, since it featured a decisive push through a 58.45 midpoint Hidden Pivot associated with a 'D' target at 70.81. (Please note that this number was incorrectly given here last week for the January contract as 63.39). A pullback to the green line (x=52.27), however unlikely, would be a screaming 'mechanical' buy. Here's a chart showing the futures' crucial progress last week.
Stocks looked leaden as the week ended, adding to the impression that the aging bull market is topping. The Dow tacked on a perfunctory 104 points, or 0.22%, and it wasn't pretty. There was little life in the lunatic sector (aka 'the Magnificent Seven'), which until recently could be relied on to celebrate its wildest flights of fantasy on Fridays. The biggest winner in the bunch was META, which rose 1.80% on news that Zuckerberg is having second thoughts about his all-in bet on a metaverse. If you're unfamiliar with the term, it refers to a virtual world in which users interact online through avatars. Zuckerberg evidently thought there were hundreds of millions of us, if not billions, eager to escape the pain and drudgery of day-to-day life. He was so certain about this that he changed the name of his company in 2021 from Facebook to Meta. But after sinking $70 billion into the concept, there has been precious little payback. Even more troubling to investors is that there are no obvious ways to make back what has been spent already, nor to recoup any further sums Meta might pour into the idea. Counting on Investors' Stupidity To cover up this boo-boo, and to avoid being thought clueless, Zuckerberg did what any muckety-muck CEO in the digital world would have done: a twisting somersault onto the AI bandwagon. "AI is the most important technology we are working on," he said, evidently hoping investors have forgotten that he spent the last four years taking pains to separate the supposed;y lucrative potential of metaverse from the vague and so-far profitless promises of AI. This latest statement to the press was a smart move if you believe that the $10 gain recorded by META on Friday was the beginning of a lasting
Although Bitcoin ended the week in a mild selloff, it occurred in the context of a bullish cycle begun two weeks ago from 80,526. The correction would need to hit d=84,819 to set up an attractive buy, and a run-up in the meantime to x=91,840 would trigger a 'mechanical' short. This would be a one-level trade with p=89,500 as the profit goal, although that doesn't rule out additional downside to p2=87,160, or even to d=84,819 over the very near term.
Bears dove for cover last week after a three-day short squeeze left them with the dim prospect of trying to obstruct a missile bound for new record highs. The 6907.50 target shown was a lock by Tuesday afternoon, when the futures not only punctured the midpoint Hidden Pivot resistance at 6226.25, but closed slightly above it. The question now is how much stopping power the target will show. If little or none, we can expect the rally to continue to at least 6938.00, a target calculated by sliding the 'a' low five bars to the left, to 6540.25. Above it there is only one logical target left: 7499.75. It comes from a blended monthly chart (A=3502.00, on 10/31/22), and although it will be good enough for government work, we shouldn't expect it to show precise stopping power.
When a correction fails to reach its 'D' target as could occur here, it implies the dominant trend, a 16-year-old bull market, will continue. MSFT could still relapse to d=431.89, but we'll give bulls the benefit of the doubt for now with a rally projection to at least 526.24. That's the 'd' target of a pattern on the weekly chart begun on 9/5/25 from 492.37, and it will become an odds-on bet to be achieved when the stock pops though 495.57, a midpoint resistance that comes from the same pattern.
This is the first chart I've drawn that projects a gold price above $5000/oz. The pattern is probably too obvious to work precisely, but that won't negate its ability to keep us confidently on the right side of the trend. A theoretical buy signal has already been signaled with the thrusts through the green line (x=4234.40). However, we can't know how likely the 5126.10 target is to be achieved until we've seen buyers interacts with the midpoint Hidden Pivot resistance at 4529.79. For now, we can use it as a minimum upside projection. As always, a decisive move through p, and particularly a close above it, would shorten the odds of a continuation to D.
