Rick Ackerman

The Dollar Index is headed toward an interim top at 113.16, a Hidden Pivot resistance that would culminate a bull trend begun from around 79 in 2014. However, there is an even longer-term target at 119.37 that is shown in the inset. Both uptrends could experience significant corrections along the way, but the retracement that has played out over the last week or so from a peak at 110.79 would generate a 'mechanical' buy signal at 106.64 (stop 104.64: weekly chart, A=101.30 on 6/3).  I've provided a big-picture perspective this week to explain why any weakness in the dollar, even if severe, would not jeopardize the very bullish projections possible using charts that go back as far as 20 years. This would be true even if the dollar were to fall to the green line (96.03) shown in the chart. Presumably, this would require an unprecedented money-printing spree, or a geopolitical shock severe enough to knock the dollar off its pins.

The futures have resisted falling to the midpoint support of the pattern shown (inset), stopping out bears no fewer than two times. The pivot currently lies at 84.18 and can be used as a minimum downside objective for the near term.  If p is touched, it would set up an enticing opportunity to bottom-fish with a tight reverse pattern that has a 'c' anchor anywhere in the range 84.01-84.19. Ask in the chat room if you are uncertain about how to handle this 'counterintuitive' trade.  As always, a decisive penetration of a 'p' support would imply more slippage to the next Hidden Pivot level, in this case p2=82.97. ______ UPDATE (Sep 19, 8:39 a.m. EDT): Sellers easily took out the p and p2 supports, ensuring that the selloff will reach a minimum D=81.76. You can bottom-fish there with a tight 'camo' pattern on the lesser charts provided theoretical risk at entry is no greater than $200-$250 per contract. ______ UPDATE (Sep 19, 8:23 p.m.); A Whoopee Cushion bounce from 82.10 negated the trade. I suggest indifference for the time being as crude continues to screw the pooch.

Use the 105.53 target of the pattern show as a minimum downside objective for now.  It seems likely to produce a tradeable bounce, if no more, since the pattern has already worked twice for initiating profitable 'mechanical' shorts. My hunch is that any bounce from this 'hidden support' will be short-lived and that TLT will subsequently relapse to new lows. I will continue to monitor price action in this symbol closely, since gold will remain under pressure as long as TLT, which correlates inversely with Treasury yields, is falling. ______ UPDATE (Sep 20, 12:55 p.m.): TLT has taken a so-far 94-cent bounce after plummeting to within an inch of the 105.53 target billboarded above. Subscribers have reported covering shorts there profitably, but it's too early to tell whether the reversal will get legs. _______ UPDATE (Sep 21, 7:51 p.m.): The bounce showed some 'leg' today, that's for sure. Let's see how bulls handle three (!) 'external' peaks immediately above. They lie, respectively, at 108.21, 109.52 and 110.56. An uncorrected blast exceeding all of them would imply that a powerful recovery is under way. _______ UPDATE (Sep 22, 10:16): Treasurys have gotten smacked down brutally today, implying this vehicle will grope its way down to the 2013 low at 101.17 in search of support. Here's the chart.

Today's refreshing plunge didn't negate the bullish target we were using, but it did make a more compelling case for the bearish pattern shown (see inset), with a 3830.75 target. The early morning high recorded ahead of Tuesday's unsettling inflation news didn't quite reach the green line (4196.25), which would have set up a juicy 'mechanical' trade -- a short in this case. However the futures make their way down to 3830.75, we should expect them to be as tricky to short as Tuesday's sudden reversal into a headline-induced air pocket. Bottom-fishing will be easier, presumably with a bid utilizing the somewhat obscure D target tied to our reverse pattern. Be alert for a possible turn from 3868.75, a discomfort-zone 'voodoo' number.

The portfolio managers who diddle the markets with our hard-earned money have limited bandwidth for the mindless 'themes' that determine which groups of stocks will be in or out of fashion at a given time. At the moment, simplicity rules with this theme: dollar up, sell everything else; dollar down, buy everything else. That's the way things have been working lately -- and are likely to keep working for the foreseeable future, since the dollar's strength lies well beyond the control of the little Napoleons who run the central bank. At present, DXY is in a so-far minor correction following a run-up that culminated last week with a 20-year high at 110.79. However, if the bounce from Friday's 108.36 low impales p=109.05 in the early going on Monday and then goes on to exceed D=109.73 of the modest pattern shown, that would signal the likely resumption of the bull trend and an imminent move to new, multi-decade highs. This will be an inflation-killer, but don't expect to read about it in the mainstream media until after the global economy has been sucked into a black hole of bankruptcies and barter. ______ UPDATE (Sep 12, 9:55 p.m.): Here's a serviceable new pattern to gauge trend strength and trade this symbol, since last night's dive wiped out the point 'c' low of the original pattern. A decisive push past p=108.50 is needed to put the dollar back in bullish gear.  ______ UPDATE (Sep 13, 6:50 p.m.): The stock market's cascade today opposite a very strong dollar underscores the point I made above. Look for new highs on Wednesday after the rally impales D=110.88 of A=107.69 (6/26).

Last week's plunge to ten-year lows was so dispiriting that perhaps it's time to prepare for an important turn. My gut feeling is that Friday's 107.42 bottom lies within a single point or so of a major low that would surely be tradeable. If so, I'd suggest using a 'camo' set-up on the lesser charts to leverage a possible reversal. This one is likely to require expert play, but I'll provide timely guidance in the chat room if interest is strong. ______ UPDATE (Sep 13, 8:57 p.m.): The so-far feeble bounce suggests TLT will continue down to at least p2=102.06 of this pattern before it can turn around.  Otherwise, you can use a print at 108.90 as a bullish telltale. 

The 4109.00 target for the December futures (see inset) replaces one at 4090.63 that was tied to the expiring September contract. The target is a midpoint Hidden Pivot, and it can be used on Monday as a minimum upside objective. If it gets blown to smithereens -- which seems likely, given the vicious short squeeze we saw on Friday -- that would put D=4317.00 in play as no worse than an even bet to be reached. 'Mechanical' trades triggered on the hourly chart seem highly likely to work, given the power of the impulse leg and the no-nonsense look of the pattern itself. We won't necessarily have to wait for a dramatic swoon, since small-chart 'camouflage' set-ups along the way can get us aboard practically at will with risk tightly controlled. Stay tuned to the chat room if interested.

The last time gold slipped into a discomfort zone was the third week in July, just before it trampolined from the tiny space between two important lows on the weekly chart (see inset). It is probably fixing to do something at least as irksome now, presumably by bouncing with equal or greater ferocity from somewhere beneath the breakdown line shown in the chart. My hunch is that this will not occur following a merely marginal penetration of the line, but rather from either p2=1671.10 or D=1619.90 of this pattern. Use the former for now as a minimum downside target. And yes, just in case, we should allow for the vexatious possibility that, with no breakdown at all, the low is already in. We cannot be fooled about this if we monitor impulse legs on the lesser charts for the next couple of weeks. ______ UPDATE (Sep 12, 10:09 p.m.): My distrust of this rally is so intense that we'll need to judge it strictly by-the-book. That means we  can at least withhold our enthusiasm until such time as the 1757.90 'external' peak created August 28 on the way down is exceeded. _______ UPDATE (Sep 13, 7:03 p.m.): Gold is looking so atrocious that a reversal from near 1700, where three lows have occurred since July 21, seems assured. Anything in the range 1699.60-1703.10 will be in the discomfort zone and therefore opportune for bottom-fishing with a tight reverse-pattern.  ______ UPDATE (Sep 15, 4:14 p.m.): It's getting ugly. Sellers drove gold through the round number 1700.00 with such ease that it became resistance before it even had a chance to be tested as support. Shifting to the weekly chart yields a new downside target at 1619.90, a Hidden Pivot that can be used as a minimum downside projection if p2=1671.10 doesn't hold.

Rallies from midway between p2 and D in patterns as obvious as this one usually go further than we tend to imagine initially. Keep in mind, though, that if they reach the green line -- in this case x=21.310 -- that would trigger a 'mechanical' short with excellent odds of producing a profit. We'll go with the flow in any case, which means that the 16.84o downside target will remain our minimum, short-term downside objective unless last week's modest bounce exceeds the 'external' peak at 18.80 recorded August 16 on the way down. _____ UPDATE (Sep 12, 10:17 p.m.): Today's lunatic leap has energized the bullish case while demoting the use of x=21.31 to get 'short' mechanically.  I'm in wait-and-see mode, waiting for a sign of whether the rally is for real. ______ UPDATE (Sep 15, 4:19 p.m.): The 'mechanical' short is viable in theory, but I'm going to pass it up. A close above x=21.31 would hint that the really IS for real.