July Silver has been in a so-far moderate correction of a top two weeks ago at 26.43 that we had precisely anticipated for the May contract. The corrective reverse pattern that I've drawn is probably more bearish than what we'll see, but it should still work for purposes of trading, forecasting and gauging trend strength. For now, you can use p=23.94 as a minimum downside objective. That Hidden Pivot support can be bottom-fished provided you are capable of limiting the risk tightly. A decisive penetration of p would shorten the odds of more weakness to D=21.46. _______ UPDATE (May 1, 10:03 a.m.): Scoundrels, lunatics and short-covering bears inadvertently teamed up before dawn to goose silver into a spasm that has turned the short-term picture bullish. The rally would become still moreso if and when it exceeds the 26.43 peak recorded on April 14. That would bring a 26.91 target into focus (60-min, A=24.26 on April 4). _______ UPDATE (May 2, 7:38 a.m.): The futures just bounced from a voodoo number without having taken out the 24.735 'C' low of the bullish pattern shown in the current chart. They will need to hit 25.12, however, to suggest the rally has sticking power, and 25.36 to get out of trouble. _______ UPDATE (May 2, 6:30 p.m.): The futures easily exceeded my benchmarks (see above), setting up a possible run at the 26.43 peak recorded on April 14.
We can be confident the so-far 11% pullback from the April 13 top at 43.89 is merely corrective rather than the start of a sickening decline, since GDXJ surpassed two important peaks -- one internal, the other external (circled in the chat) -- before taking a breather. This generated a quite powerful impulse leg, one with the potential to push this gold-miner proxy into the low-to-mid-50s. A reverse pattern that starts with January's 41.16 peak suggests GDXJ will become an opportune buy at either 37.40 or, worst/best-case, 35.24.
Bertie appears bound for the 31,473 target shown in the chart. My hunch is that bitcoin's handlers are intent on pushing it up to 40,000. That, in my estimation, is where losers trapped in positions acquired at much loftier levels will turn greedy. Which is to say, instead of praying for an opportunity to get out for 'even' or a small loss, their fevered brains will begin to envision a move up to the fantastical levels bandied around when crypto hubris was peaking at the beginning of 2022. This will be bitcoin's last appearance on the touts list, at least for the foreseeable future. Only 13 subscribers voiced an interest in keeping it -- well shy of the 25 votes I had stipulated. Although there evidently is casual interest in BRTI, only one of those who spoke up has mentioned it by that symbol in the chat room, and even he did not comment on a string of dead-center-bullseyes I'd touted that would have been most useful to crypto traders. I will continue to respond in the chat room to queries concerning BRTI (or any other vehicle that tracks bitcoin and can be charted), and I am open to restoring it to the list if the very muted bitcoin chatter in the Trading Room rises to a din. Bring me a whole bunch of new, presumably young, subscribers who are gung-ho on bitcoin, and Bertie will be restored pronto.
You just know that the scoundrels who rig the energy markets and who have transformed them into a flighty carnival game have gone clueless when your editor cannot find a good place to plant an 'A' high or low on a NYMEX chart. Even so, we got the big picture right intuitively by not buying into the steep, fleeting rally that occurred after the Saudis took a pot-shot at Biden by ostentatiously cutting output. It is ultimately demand for crude that causes its price to rise, not the curtailment of supply. With the world economy sinking into stagflation-at-best, a surge in energy demand seems unlikely. Ordinarily, I rarely post a tout without putting a number in it that you can trade. In this case, however, I'll say that the July contract is just a trade and leave it at that. _______ UPDATE (May 2, 10:41 p.m.): Wheeee! Isn't this fun? It's probably time for another threatening PR release from the cartel that couldn't shoot straight.
[I'm giving the commentary below a second week on the front page because the thesis is so outrageous even I can scarcely believe it. Stocks screamed higher to end the week, as if everything were right with the world. What lunacy! Investors have truly gone out of their minds. Reportedly, there are 186 U.S. banks on the verge of failure. Although the Fed was able to paper over the collapse of three sizable ones earlier this year, what will happen when a few more fall in rapid succession? The minefield this will create will be impossible to navigate. A run on the banks is a very real possibility no matter what a stock market gone vertical would have us believe. For the time being, however, I'm sticking with my seemingly nutty forecast, since the very bullish look of two bellwethers, Chipotle and Apple, suggests they and a few other institutional must-owns will continue to drag the broad averages higher. Stay tuned. Next week: Why my friend Doug Behnfield, a Boulder-based wealth advisor whose thoughts have been featured here many times, thinks Treasury bonds are the place to be. RA ] *** Like many of my subscribers, I have been waiting for the stock market to crash so that sanity might have a chance to recover its footing in the investment world. Permabears can always come up with good reasons to explain why a crash is imminent. Some use technical tools for this. Others cite public and private debts that have grown far too large to repay, and high stock-market valuations that do no square with a credit-driven economy that has been struggling harder and harder to grow. Even Biblical prophesies of doom appear to be gaining sway as the tenets of Western religion come under heavy attack. If the End of
Using a longer-term chart has somewhat raised my minimum downside target to 99.72 from the 98.71 objective given here earlier. This midpoint Hidden Pivot support warrants close watching, since its failure, especially if decisive, could portend a move in the U.S. dollar from purgatory into the first circle of hell. A fall all the way to the 93.55 target would stoke inflation while giving gold and silver a strong boost. The A-B leg of the pattern is legitimately impulsive, and so we should expect it to give us an excellent read on the forces acting on the dollar.
Distrusting the hubris that accompanied Saudi Arabia's timid cutback on supply has paid off, since crude has relapsed as we might have expected. I've switched to an unambiguously bearish pattern that projects a drop to as low as D=66.86. We'll likely get to enjoy a ride down to at least p=74.89, where price action should tell us how much more weakness might remain. Let's keep our fingers crossed, since the last thing the country needs is gasoline prices pushing above $4 and staying there for a while.
Gold has been leaden for a month, presumably to set up a nasty surprise. But for whom -- bulls, or bears? My hunch is the latter, but we'll keep an open mind just in case. They evidently were fixated on the 2050.60 target shown in the chart and may have been patting themselves on the back when the futures whipped around and shot up to a marginal new high that stopped every last one of them out. We shouldn't underestimate the lingering pain, nor their natural desire to even the score. Look for wicked swings to precede a drop to at least p=1939.10 if there's going to be a consolidation for another big leg up.
Silver will need more rest after topping pennies from an important Hidden Pivot target at 26.20 target that I'd drum-rolled for the May contract. The corrective target at 24.80 shown may prove to be optimistic, but there's no harm in using it analytically, since its ability to contain sellers can tell us how much power is behind the downtrend. It has worked already for initiating a 'mechanical' short at the green line, and it can also be used to bottom-fish. Caution is advised, however, since the 'B' low of the pattern 'sausaged out' when it narrowly failed to impulse beneath the April 6 low at 24.91. ______ UPDATE (Apr 23, 6:00 p.m.): The 24.80 target worked nicely, getting within 7 cents of the low of a so-far 61-cent bounce. It seems likely to continue because the bounce overshot the 'd' target of a minor reverse pattern.
GDXJ has corrected sharply after falling a substantial 1.68 shy of a 45.57 rally target that remains viable. In fact, a further fall to the red line, a midpoint Hidden Pivot support at p=38.92, would trip a moderately appealing 'mechanical' buy, stop 36.70. It would be less hazardous to wait for the correction to come down to x=35.59, but that would risk missing the next important upturn. In practice, we'll look to buy at the higher price, but with a 'camouflage' trigger that risks relative pocket change. Stay tuned if you care.
