What looked like the start of a promising rally in early May turns out to have been just a drum-roll for yet another head-fake. The uptrend was mildly impulsive on the lesser charts at first, but the end result was a 'mechanical' shorting opportunity at the green line (x=104.09). This implies the Dollar Index could fall to D=98.71 before it finds a foothold. This should be at least slightly bullish for bullion, but we've seen that the effect is often so feeble as to be negligible.
Last week's Whoopee Cushion bounce came just in time to rescue the faintly bullish pattern on the rightmost side of the chart (inset). If the subsequent selloff resumes this week, causing TLT to land on the green line (x=101.69) with a thud, that would trigger a moderately attractive 'mechanical' buy. It would not be predicated on a run-up to the 'D target, however, but rather on a one-level ride to p that could produce a small gain with good odds nonetheless, even with call options.
When will the rampaging bull run out of steam? A good question, considering how Wall Street has been flouting a slew of good reasons for the broad averages to be at multiyear lows rather than revving up for a shot at new record highs. Two destructive juggernauts in particular are bearing down on the economy with such force that only investors in a far-gone state of madness could contrive to ignore them. For one, an epic collapse in commercial real estate is well under way that will flatten the economy for decades. And for two, the most extreme yield-curve inversion on record is predicting a commensurately extreme recession. Under the circumstances, it would seem logical for traders to short into the stock market's show of bravado. So far, however, this strategy has brought only pain, along with the sight of stubborn bears being carried out in body bags. "This is starting to get out of hand," remarked a bruised and battered Rick's Picks subscriber in the chat room the other day. "What's the latest [Hidden Pivot] for a topping call. At least an intermediate top?" You can access my precisely detailed response by clicking here, but the bottom line is this: Two bellwether stocks have at least somewhat higher to go before they, and presumably the entire stock market, are ready to keel over from exhaustion. A Setback, then Higher Specifically, MSFT has a 5% rally ahead of it before it reaches a potentially important top, and AAPL an additional 3.6%. These figures are based on Friday's close and differ slightly from the ones given in the recording, a tech analysis session that includes some nifty tricks you can try yourself with put and call options. The precise price targets for the two stocks lie, respectively, at 360.02 and 191.73.
The stock market is in the grip of mass insanity, blithely ignoring warning signs of recession and the certain collapse of commercial real estate. How high could it go? To stretch your imagination, I've reproduced the weekly chart to show how 6136 is possible -- 1788 points (41%) above the current 4348. This is not to suggest that a bear market collapse from last week's high is not possible; it could indeed happen. But it seems unlikely, given that the 27% drop from Jan 2022's 4808 peak couldn't even generate an impulse leg. That would have required a further fall of 304 points beneath the 3502 low recorded in October. Under the circumstances, the rally since then seems likely to reach p=4819 at a minimum. Look for a temporary peak there that is tradeable, but don't count on it to work precisely, since the chart is a composite of ABC coordinates from different contract months.
The extravagant, 253.96 target clearly visible in the weekly chart (inset) corresponds to one that I've proffered this week for the E-Mini S&Ps. First things first, though, since AAPL will need to demolish p=189.07 to be rated an odds-on bet to achieve so ambitious a 'D' objective. As an added precaution, and to deny Mr. Market even a small chance of fooling us, we should keep in mind this less ambitious chart, with a 204.01 target extrapolated from a lesser point 'A' low drawn. We need consider this number only if and when 189.07 is exceeded. The chart also allows for the possibility of a correction off last week's high -- or conceivably even the start of a bear market, since a stall has occurred at the secondary pivot (p2), a notoriously difficult impediment for bulls.
Yet another week of tedious slop produced no change in my bullish outlook for the intermediate- and long-term. For now, August Gold's correction is targeted on 1903.90, a 3.5% drop from last week's settlement price. Neither bears nor bulls have shown more than slight interest in bullion since early March, and both will likely be bored out of their minds before the bullish trend resumes in earnest. The first hint of this would come on a pop above 2006.20, the 'C' high of the pattern shown. Otherwise, expect the weak, downward dirge to continue. ______ UPDATE (Jun 16,): The presumably meaningless rally that ended the week triggered the fourth 'mechanical' short since May 30. The first three produced a theoretical profit of $10,000 apiece on four contracts. Here's a fresh chart that shows gold's pooch-screwing price action. _______ UPDATE (June 20, 1:58 p.m.): With gold in its wonted gold-is-garbage mode, the 1903.90 downside target is looking increasingly likely to be reached -- and precisely, given the umpteen bounces the futures have taken from p=1956.10. An arguably even more appealing pattern projecting to 1892.10 will be in play if 1903.90 is exceeded by more than $1.00 or so. I say 'more appealing' because of the pert little alternative one-off 'A' at 2087 recorded on May 4.
The rally from May 26's 22.78 low would become an enticing 'mechanical' short if it touches the green line (x=25.19), as seems likely. Initial risk would be a little more than $4000 per contract, so the trade is recommended only to those of you who know how to cut that by at least 90% using a 'camouflage' trigger. If there is sufficient interest in the chat room, I will provide guidance in real time. We would be shooting not for a drop to 'D', but for a single-level profit predicated on exiting at p=23.946. A fall to D=21.46 would still be a theoretical possibility, however. ______ UPDATE (Jun 16): Yet another week of excruciating tedium told us nothing we didn't know a month ago. Even the crime syndicate that manipulates bullion futures seems too bored to bother. The analysis above can stand as given.
The Biden Administration can count on Wall Street to celebrate meaningless economic data and bogus GDP growth with steep rallies, even as the visible economy continues to implode. It will become increasingly difficult to ignore signs of impending collapse, however, as anyone who lives in San Francisco could tell you. The city's growing wretchedness is arguably no worse than what you would find in Chicago, Portland, Seattle or L.A., but it seems more appalling because San Francisco, with its cable cars, spectacular scenic vistas, hilly, charming neighborhoods and the world's most beautiful bridge, has always been regarded as a special place. In no song will anyone ever leave his heart in Minneapolis, Boston, Milwaukee or Miami. Labor Market Hubris New York is no better off, with even mighty BlackRock struggling to turn a profit on commercial real estate. Rents are higher than ever, but they haven't kept up with an even steeper rise in the cost of servicing property loans. Nor will they, for the U.S. economy is on the down slope of an inflation/deflation Mt. Everest, so hopelessly burdened by debt as to lie beyond the quack nostrums of Fed policy, let alone capable of regenerating itself with a robust revival. Consumers appear to be tapped out, tech firms are still laying off by the thousands, small businesses are closing at an appalling rate, and the Mother of All Yield-Curve Inversions is predicting a commensurately extreme recession, Against all these troubles, the spinmeisters would juxtapose the supposed creation of 339,000 jobs in May. Armed with this dubious evidence of economic growth, officialdom is able to speak of a "strong" labor market with a straight face. However, 201,00 of the jobs, or 60%, were in government, health, education, leisure and hospitality, notes economist David Stockman. With growth mainly in low
The post-covid bull market begun in the final quarter of 2020 is running out of room, at least on the daily chart. The 184.86 target shown, a Hidden Pivot resistance, is not the highest that can be projected, but it still looks capable of restraining the charge, if only for a short while. Sliding 'A' down to the 118.70 low recorded on March 4, 2021, produces an alternative high at 190.90, but we'll wait to see how buyers handle D=184.86 before we raise our sights. To stretch your bullish imagination, but also to be on record with a seemingly outrageous forecast, let me introduce a 253.96 target with this weekly graph. We'll be better able to make book if the stock exceeds 184.96 and stalls at the 189.07 midpoint. That would make 253.96 more plausible as an objective, especially if AAPL stabs through p=189.07 and closes above it the same week. ______ UPDATE (Jun 5, 2:35 p.m.): AAPL has plummeted from a spike high at 184.95 that missed my target (boldfaced above in green) by nine cents. Because the stock is the most important stock-market bellwether of them all -- "the only stock that matters" -- we should be alert to the possibility that the broad averages have put in a major top today. Addendum, 6:49 p.m.: I doubt it, especially since the selling was triggered by 'news' that was bound to affect mainly rubes, yokels, and riff-raff who trade the stock, but that's no reason to take our eyes off a chart that is incapable of lying or even misleading._______ UPDATE (Jun 7, 5:52 p.m.): Monday's spike on 'goggle news' has left AAPL top-heavy. This chart suggests the stock will need to come down into the range 170-175 range to consolidate for the next thrust toward $200.
The bullish stampede stalled briefly at the 4287.75 target signaled in early May, but the close above signaled more upside over the near term to at least 4331.50, a Hidden Pivot resistance shown in the chart that has been more than two months in coming. There are some additional point 'A' lows that could be used to project an even higher target, but I have not used them because the 'B' high did not exceed any prior peaks. That doesn't necessarily mean the futures can't surpass 4331.50, only that a target above cannot be considered precisely reliable. Please note that a swoon touching either the red or green line, however unlikely, would generate an appealing 'mechanical' buy. ______ UPDATE (Jun 5, 6:43 p.m.): The S&Ps sympathetically weakened when AAPL plunged today, but this seemed scant reason for concern. It happened because too many amateur traders were expecting the long-awaited unveiling of Apple's ridiculously overpriced VR goggles to send the stock soaring. It did, albeit briefly and with help from the usual short-covering panic overnight. However, the subsequent dive was merely classic 'buy-the-rumor-sell-the-news' price action, probably signifying nothing. We'll monitor AAPL closely nonetheless, since the selloff began from a high just nine cents from the 184.86 rally target I'd drum-rolled in the AAPL tout just above. _______ UPDATE (Jun 8, 4:54 p.m.): The trendline shown in this weekly chart has been breached only slightly, but it should not have been breached at all if the rally were about to reverse. The line is authoritative because the two peaks it connects came ahead of precipitous selloffs. If the futures close above the line on Friday or trade decisively above it, that would be yet another warning to bears against fighting the rally aggressively.
