Rick Ackerman

If gold is bottoming, the evidence has been somewhat more persuasive on the Comex than in ETFs reflecting growth prospects for miners and junior exploration companies. This ETF generated a weak impulse leg last week that was doubtless sufficient to pique the interest of weary bulls. but the next thrust would need to impulse above the 33.27 peak recorded on July 1 to be worthy of notice.  The move would be more persuasive if there is no discernible B-C pullback once GDXJ has surpassed Friday's dubious high at 32.29, which was achieved on the opening bar with a short-squeeze that would have trapped and soured more than a few bulls.

Shorts were under intense pressure to cover as the week ended after getting squeezed for two consecutive days without a chance to rest. For all the pain the 148-point rally may have caused bears, it barely registered a blip on the daily chart.  No prior peaks were surpassed; moreover, it would require a further upthrust of 326 points to generate an impulse leg on the daily chart. Even so, I've given the bull the benefit of the doubt with the most ambitious target (see inset) that can be projected using a 'reverse pattern'.  It lies at 4116.75, although a move to that number cannot be considered a lock-up because p=3877 has been pounded without giving way  The pattern itself has been working nicely for trading purposes, having produced two $24,000 'mechanical' winners acquired at the green line. ______ UPDATE (Jul 18, 7:43 p.m. EDT): A dip to x=3758 would trip a third 'mechanical' buy, but the odds looked better when two similar trades were triggered earlier this month. Getting short is no piece of cake either, as anyone who has attempted it during the last three sessions will have surmised. _______ UPDATE (Jul 19, 5:30): Frenzied shorts continued to machine-gun themselves in the foot, so perhaps it's a good time to LOWER our sights lest we get caught up in the madness. Although the 4116.75 target noted above will remain valid, I'll suggest focusing on a lower Hidden Pivot resistance at 4033.75 derived from this pattern.  We'll want to try shorting there in the usual, risk-averse ways. I'll also introduce 4256 as a 'discomfort zone' objective in case there are still a few bears stupid enough to hang on for dear life above 4116.75. Here, in summary, are the tradeable obstacles above: 4033.75, 4116.75 and 4256. As always, a decisive move

Crude's gains toward the end of the week were impressive, but buyers looked winded when the clock ran out on them. Regardless, we should view the 99.85 rally target shown in the chart as a minimum upside projection for the near term. The pattern has already produced a $5200 'mechanical' winner on four contracts bought at the red line and would signal an equally promising trade if the futures were to swoon to the green line (95.89). ______ UPDATE (Jul 19, 6:50 p.m.): I've opened a larger 'reverse pattern' with a 110.78 target, since the D targets of  smaller ones have gotten vaporized these last few days. Monday's impalement of p=100.67 implies a strong likelihood the D will be reached. A swoon to X would trigger a very attractive 'mechanical' buy, stop 90.55. ______ UPDATE (Jul 21, 11:14 p.m.): Here's a chart for the September futures, with D=108.25. A pullback to x=93.24 would trigger an enticing 'mechanical' buy. 

Finally, a bottom in sight? Judging from the chart, with its textbook rhythms and clarity, it will be hard for the August futures to avoid reaching D=1665.00 and then bouncing tradeably from this Hidden Pivot support. The downtrend has obliterated several minor supports where I'd suggested bottom-fishing, but also a major one at 1773.80, the midpoint of the C-D leg. This suggested there was urgent selling still to come, and we will likely see the last of it within $1-$2 of the target. The pattern is too obvious for traders to count on a precise turn from D, but even an imprecise one should serve for bottom-fishing with risk tightly controlled. _______ UPDATE (Jul 21, 11:15 p.m.): The futures took a trampoline bounce after swooning to 1678, but I am not ruling out the possibility of a relapse that gets closer to my 1665.00 target. Alternatively, a push exceeding 1744.30 would put bulls back in charge.

Although we should always be alert to the possibility of a turn from the secondary pivot (p2), in this case it seems unlikely. Once September Silver penetrated p=19.59 decisively, it never looked back. The futures seem to have eyes for the 16.53 target we've been using, and this is corroborated by a corresponding one in August Gold at 1665. A tradeable turn from near 16.53 if it is reached is all but a lock-up, but as I've mentioned in the latest gold update, the pattern looks too obvious to deliver a low we can count on to be precise.

T-Bonds struggled for loft last week, recouping most of the previous week's sharp losses but leaving some unfinished business. First, there is a minor rally target at 118.93; it looks likely to be achieved soon. Second is a series of peaks near 120 recorded in the last week of May. Together they will pose daunting resistance. Rather than try to predict what will happen, we'll simply observe price action and let TLT tell us whether the long bond is in the nascent stage of a major bull market. A decisive burst past 120 would imply it. _______ UPDATE (Jul 19, 6:56 p.m. EDT): The D target at 118.93 has gone from a shoe-in to a 'maybe' this week, since the 'sloppy seconds' mechanical buy at x=113.77 has such limited appeal. Move to the sidelines for now. 

Conventional patterns project rally targets that seem too ambitious, so I've settled on an rABC that allows upside over the near term to a relatively modest 158.55.  This should be an easy trek, but I would still consider shorting near the target with a 'camouflage' set-up that risks no more than 12 to  20 cents a share initially. A sign that the pattern is working is the winning 'mechanical' buy at the green line. Don't pass up a second opportunity to buy there, stop 129.03, if the stock should unexpectedly revisit it by Wednesday. _______ UPDATE (Jul 18, 18:03): If AAPL is about to reclaim its usefulness as a market bellwether, it should deliver a 'mechanical' winner from the red line (p=143.80). The trade would require a stop-loss at 138.88, but I'd suggest paper trading if you are developing your 'mechanical' chops or just curious to see how well these trades work. _______ UPDATE (Jul 19, 10:22 p.m.): AAPL did in fact lead the way, but with a nasty short squeeze on the opening bar rather than a shakedown. The target at 158.55 is not quite a lock-up, but it is a good enough bet to suggest the broad averages are likely to move higher for the next 2-3 days.

There was a point last Thursday when virtually all of the hundred or so market symbols I track were 'red' except for the U.S. Dollar Index. This was unusual and unsettling but hardly mysterious, since the dollar's strength was the reason everything else was falling in value. The trend unfortunately is only just beginning and eventually will overwhelm the global economy and banking system. Any observer could have seen this coming, although few did. Even now, only hard-core deflationists understand the dire implications that a strong dollar holds for mountainous debts that have piled up around the world. Nor is it generally understood why hyperinflation is an extremely unlikely option for liquidating this debt, since it would destroy creditors – i.e., the Masters of the Universe – as a class. Deflation is not only far more logical, it already appears to have begun sucking asset values toward worthless singularity with power that ultimately will grow irresistible. The possibility of a ruinous debt deflation was once considered looney-bin talk. I was virtually alone in writing about it in the early 1990s. I even suggested at the time, in think-pieces published in Barron's and the San Francisco Examiner, that a short-squeeze on the dollar could bring on deflation precipitously. My floor-trading background made this scenario seem not merely plausible, but likely. It still is, I believe, and it seems predictable that it will begin with a small disturbance in the credit markets that quickly causes short-term lending to dry up. Borrowers unable to roll their loans as usual will be forced to settle in cash, an unfamiliar medium of exchange in the world of finance. This will cause ripples of panic overnight, but don’t bother lining up at the door of your bank before dawn, since the $25k to $50k that branches

DXY has blown past a 107.57 rally target today that, although not minor, is less important than the one at 113.16 shown in the chart (inset). More immediately, however, there is this Hidden Pivot resistance to contend with at 108.62. It can serve as a minimum upside projection for the near term, and although we should expect a tradeable pullback from it, the higher target at 113.16 looks nearly as likely to be reached. To keep these middling price objectives in perspective, in interviews over the last 15 years I've predicted that the dollar eventually would test highs near 120 recorded as the new Millennium began. I've also suggested thinking like a deflationist if you want to make clear sense of the economy, Fed policy, the financial system and the ruinous deflation that has become all but inevitable for the U.S. and the world. _______ UPDATE (Jul 13, 9:35 p.m.): DXY turned wildly aerobatic after rallying to within a hair (four cents) of the 108.62 target.  When the craziness subsides, expect the consolidation to give way to a renewed push toward 113.16. _______ UPDATE (Jul 24): The rally subsequently poked above 108.62, topping at 109.29, before a so-far moderate correction set in. The 113.16 target remains viable and presumably will be achieved when the pullback has run its course. Here's a current  chart.