Although rates on the Ten Year Note ended the week slightly beneath the previous week's 4.74% high, the retracement was too shallow to infer that significant easing lies ahead. Further consolidation may be needed for a push to the 5.09% target, but don't expect the pullback to go much lower than 4.58%, the Hidden Pivot midpoint support of the pattern shown. However, rates could fall as low as d=4.42% without significantly affecting the chart's bullish look. It has been nearly two decades since T-Notes exceeded 5%, reaching 5.31% in June of 2007 at the start of the Great Financial Crash.
In the Trading Room Thursday night, I left a note for 'Nick the Greek', an erstwhile shipping tycoon who is able to trade when most of us are sleeping. He'd made a nice score earlier in the day by shorting ES at a 7755.50 target I'd advertised that caught the exact-to-the-tick top of a 32-point plunge. "If the nasty little sonofabitch breaks out again," I texted at 9:28 p.m., "it'll be going to 7769.25. That is a Hidden Pivot resistance that the clowns and algos will not likely know about. I know you prefer 25-point stops for shorting ES, but don't give this gambit more than 10 points." Well, ES did whipsaw higher after faking weakness on the opening, trampolining to what I'd reckoned would be a perfect place to get short, 7769.25. Except that it kept on going -- but only high enough to shame my 10-point stop-loss. The futures then continued higher, peaking minutes later at 7782.50, a measly 3.25 points above the implied stop I'd told Nick to use; then they fell 70 points so quickly that there was no chance to get aboard belatedly. Sorry about that, Nick. But as I keep telling you, you're on the right track shorting every rally in...whatever. That's what the sleazeballs who run this carny midway have been doing, distributing stock at every opportunity in preparation for the inevitable Big One. In the meantime, I will post a link in the chat room to an annotated version of the thumbnail chart, since it contains tradeable information I'd prefer not to divulge on this page.
MSFT's rally has been so steep that I was only half-joking when I speculated in the chat room that the company had found an AI cure for cancer. As powerful as the rally has been, it cannot go one forever. If this is borne out in practice, the 548.98 target shown is a logical place for the wilding spree to end. However, the ease with which buyers pushed past p=449.09 makes it all but certain that the target will be achieved. It's not far above and could be reached as soon as Labor Day, so caveat emptor!
December Gold got slapped down hard on Friday after climbing to within inches of the 4819.30 target (see inset). Price action at p=4417.50 suggests the target is likely to be reached, although penetration was not sufficiently decisive to guarantee this. Regardless, we can trade this situation with a 'mechanical' bid at the red line p=4417.50), stop 4283.50. But unless you know how to craft a 'camouflage' trigger to initiate the trade with relatively little risk, I am not recommending it. Merely paper-trading this one can tell us whether the bull trend begun from July's 4015 low is still intact. If so, the stop should hold; if not, we should be ready to attempt the same gambit at the green line, although predicated on a rally of just one level, from x to p.
The December contract tripped a theoretical sell signal when it dropped below the green line on Friday, but we'll ignore this and give bulls the benefit of the doubt for the time being. Our flexibility is predicated on a test of support at the red line, a midpoint Hidden Pivot support at 67.66. It was exceeded more than marginally on Friday, but if a second closing bar replicates this next Friday, that would open up a corrective path down to d=63.275. If that support, too, should fail, a decisive breach would be the most bearish signal we've seen on the weekly chart since March.
The chart takes a relatively sunny view, showing a pullback to the green line, followed by a bounce to who-knows-how-high. The bearish argument is rooted in the failure of last week's high to surpass April 17's 'external peak at 136.55. The shortfall was only 31 cents, but it left the weekly chart without compelling evidence that bulls really mean business. While it is true that a pullback to the green line would generate the kind of 'mechanical' buy that could be considered free money, we might expect only a one-level bounce back to 124.90 rather than a stampede to 159.87. We'll consider the outlook one step at a time, first by monitoring the retracement that follows Friday's nasty reversal.
Crude has been mired in a $20 range, reflecting the contradictions of Hormuz. Although the channel has yet to swing wide open as Trump would have it, the flow of oil under U.S. naval escort has brought global supplies up to a level that has kept a lid on quotes. Friday's early-morning rally was shortable under the circumstances, and the subsequent downtrend looked bound for the 77.35 target shown. The implied 7% decline from last week's closing price would allow pump prices to recede, providing a break for travelers over Labor Day weekend. But any relief thereof would probably be limited, since there is no likelihood that Comex futures are about to dip significantly below 77.35.
Although we used to feature edgy market commentaries in this space, the time and effort spent crafting them is now devoted to making the Rick's Picks Trading Room an absolutely unbeatable source of timely, profitable ideas for novices and professionals. Your editor must also confess that he was deeply tired of having to write regularly about a stock market energized by clueless money managers whose only trick is recklessly throwing Other People's Money at some moronic investment-theme-of-the-week. Truth to tell, having to take the stock market seriously every week wore me down. You know it and I know it: the stock market is just an epic con-job created and designed to enable The Elect to make vast sums of money without having to lift a finger or get their hands dirty. You should make a habit of checking here weekly, though, since I will continue to post links to my latest interviews and to offer visual enticements designed to entertain, enlighten and even warn you. Much of it will come from YouTube, since their video catalog is vast and endlessly fascinating. Submissions, including home videos, are welcome and should be sent to this address. To view this week's entertaining offering, click here for an aural feast served up by Aubrey Logan, a jazz singer and trombonist who has a singularly rare gift for re-imagining iconic tracks -- in this case Michael Jackson's 'Billie Jean' -- so that they become her own. She moves like she was born hard-wired to the beat of jazz. If you enjoy the vid, check out her witty riff on Sonny & Cher's The Beat Goes On. Subscribe Free! The analytical 'touts' listed below, overhauled each Sunday and updated 24/7 during the week, will continue as always, as will their barbed emphasis on the striking similarities
Uptrending ABCDs in every time frame are driving rates on the 10-Year Note inexorably toward the 5.30% target shown. The run-up could accelerate, since Bessent's abortive experiment last week with quantitative easing laid bare the futility of trying to suppress rates in an environment where private credit is rampant and government debt is at $40 trillion and rising. Gold doesn't like higher rates, but in this case, bullion is reacting more to the gathering crisis than to monetary conditions. Yields and gasoline prices are not going to let up before November, and that is why we are about to experience a regime change. The greedy scumwads who control the markets have been quietly distributing as much stock as they can to widows and pensioners before the jig is up. With help from their ignorant shills at all of the major news media outlets, they even managed to short-squeeze the S&Ps and the Dow to new all-time highs in the face of a perfect storm of bear market hazards. That is what bull traps are all about, and why you should shun the party. (See my chat room post about TLT, a solid, dividend-paying alternative that is close to bottoming.)
Switching to the October contract, I've used a conventional pattern and a conservative target to project imminent upside to at least 88.96. The next resistance would be somewhat higher, at 90.70, a Hidden Pivot derived from shifting the point 'A' low down to July's 70.89 print. Any higher would require a pattern derived from a longer-term chart. Here it is, and the highest price it can project is 102.60. If correct, it would imply that the Hormuz standoff will end, although predicting exactly how seems beyond the capabilities of the punditry or even Trump himself.
