Sellers have laid waste to so many Hidden Pivot supports, both minor and major, in the past year that I hesitate to assert that the new target shown, at 108.74, will end the bear market in Treasury paper. Let's focus for the time being on the possibility of a turn from p2=112.31, since that would be more closely congruent with my longstanding forecast for a 3.24% top in yields on the Ten-Year Note. Regardless, an easy breach of that 'hidden' support would portend more downside to 108.74. At that point, long-term yields would be above 3.5%, dealing a presumably fatal blow to a U.S. economy that is already arguably in recession. ______ UPDATE (May 9, 6:15 p.m.): A promising bounce has come from a low today at 112.62 that lay just an inch from the secondary pivot I'd flagged above. Let's see what it makes. The action is yellow-bellied so far because the intraday high failed by a single tick to take out the 'external' peak at 114.71 recorded Friday on the way down. _______ UPDATE (May 10, 11:43 a.m.): So far so good, but the bounce would become more persuasive if it can surpass the 'external' peak at 119.31 recorded last Tuesday. Here's the chart. It would be even more bullish if the rally does this without requiring a visually evident pullback on the hourly chart.
Two days of pussyfooting an inch from my 111.88 target has killed my enthusiasm for getting short there. Although I would ordinarily view the week's pooch-screwing price action as consolidating for an upthrust, I'm still tempted to use the target to get short as originally planned. It can be done with an rABC set-up using an a-b interval as tight as 40 cents. If you understand this instruction, you're qualified to do the trade. If it gets stopped out, take it as a hint of more upside to at least 116.25, or 124.87 if any higher. ______ UPDATE (May 9, 6:20 p.m.): The futures could have been shorted with an rABC set-up as advised, but only after applying imaginative genius, since they never even got close to 111.88 before tanking.
The bearish target at 29,130 is the tail end of a legitimate pattern that meets all of our rules. We'll have a better idea of how likely the target is to be reached once we've seen sellers interact with p2, a secondary Hidden Pivot support at 33,900. There will be a good opportunity to bottom-fish there, but it will require some deft 'camo' work, since p2 is close to two prior 'external' lows that the droolers will be using for their own purposes. From a visual standpoint, lows made last summer 'want' to be tested, and that's why my gut is going with a drop beneath 30k before bulls are likely to turn feisty again. _______ UPDATE (May 10, 6:38 p.m.): The p2 pivot barely broke Bertie's fall, affirming the likelihood that this plunge will continue to 29,130. If you've made money on the way down using my two successive, very bearish targets, use it to cushion a stop-loss for bottom-fishing. _______ UPDATE (May 11, 10:42 p.m.): Bertie took a psychotic, $2800 leap from a low $54 (0.2%) beneath the 29,130 target, only to relapse to a so-far low at 27,731. This is bearish, but we should give it a day or two to generate a bullish impulse leg on the hourly chart. That would require a print at 32,132. _______ UPDATE (May 12, 10:15 p.m.); With the decisive breach of 29,120, I've shifted to a higher point 'A' to produce a new downside target at 21,947. Judging from the way sellers sliced through p=35,079, it seems likely to be reached.
The bearish, big-picture pattern shown was validated last week by the powerful short-squeeze rally precisely from its D target at 153.00. I did not feature this picture earlier because I was focused on an even bigger one, but I'm somewhat relieved to see that it would not have gotten us short 'mechanically' in any event. That's because the downtrend until this week did not produce any corrective bounces sufficient to trip a short-sale signal. Looking ahead, we can rely confidently on the new pattern, starting at A2, to give us a juicy trading opportunity at D2=146.77. That is where AAPL is going, and I won't queer the usefulness of the target by discussing it any further, including in the chat room. I have not put it in boldface green as I usually do, I have not put a $ sign next to the symbol to indicate this tout is actionable, and I will bury it toward the bottom of the list so that the tout will have a better chance of being "our little secret." Keep in mind something I have repeated here many times: AAPL is the only stock that matters. Get it right, and you get the market right. _______ UPDATE (May 11, 10:54 p.m. EDT): I expect my targets to work very precisely when they are derived from patterns as clear as the one shown in the chart. The so-far 66-cent overshoot of 146.77 has left the stock straddling the bull/bear divide, but my bias is bearish nonetheless and will become moreso if the grifters and pederasts who control AAPL open it on Thursday with a weak short-squeeze. _______ UPDATE (May 12, 10:20 p.m.): Sellers have trashed every 'D' Hidden Pivot, major and minor, leaving only last October's low at 138.27 to break the stock's fall. I aired
Last week's commentary asked how high the dollar can climb before it snuffs inflation and the increasingly shrill hysteria that has accompanied it. Inflation is supposed to cheapen the dollar, but that is not what has been happening. Instead, it has been climbing steeply relative to all other currencies. The experts have not been able to explain this, nor why the rally began well before the Fed was even thinking about tightening. It is simple, though, if you understand deflation and its chief symptom, a rise in the real burden of debt. The dollar has been climbing because it "knows" there are more debts than can ever be repaid. This can only result in massive waves of bankruptcies that are going to make us nostalgic for the consumer inflation that is today's headline news. Sure, the Fed could print enough money to pay off everyone's debts, including its own: student loans, our collective liabilities for Social Security, Medicare and private pensions, etcetera - but also car loans, mortgages and credit card balances that have ballooned. The resulting hyperinflation would solve nothing, however, even as it destroyed lenders as a class and all institutional conduits of borrowing. The megabanks would be ruined, leaving no one to lend to you, me or anyone else. It could take a generation or longer for credit to sprout roots again. Do we really want to go down that path? More Tightening Unneeded This week's question is related to the one about the dollar: How high can interest rates climb before they snuff inflation and the increasingly shrill hysteria that has accompanied it? Economists and pundits seem to think the Fed has only begun to tighten. More likely is that interest rates are already high enough to have tripped the U.S. and global economies into deep
Although charts with shorter time frames would appear to suggest that crude is in a bullish consolidation, the continuous weekly chart displayed (see inset) provides a speculative basis for inferring that the bull market peaked with March's surge to 130.26. I say this is speculative because there is nothing in this picture arguing against another bull leg once the spectacular Covid rally begun in 2020 has had time to regain strength. There are reasons to doubt this scenario, however, particularly the significant weakening of China's economy. Energy demand from China sets the global price of oil at the margin, and when the nation's manufacturing sector in particular is imploding, as it is now, no amount of cartel price-rigging or ginned-up constraints on supply can surmount the deflationary effect of falling demand. An even bigger picture suggests the global economy has begun to shrink, with a report on Friday that U.S. GDP fell 1.4% in Q1. (Leave it to the WSJ to publish an op-ed by that useful idiot Alan Blinder saying IF a recession comes, it will be mild.) If a U.S. recession has indeed begun, as I asserted in my commentary last week, then the March high in crude is certain to stand for a very long time. ______ UPDATE (May 3, 10:28 p.m.): Check out the Trading Room thread starting with my 12:50 post, which produced an easy winner bottom-fishing June Crude futures. The 99.02 downside target in the pattern linked in my post will remain my price objective unless the 'C' igh gets stopped out. _______ UPDATE (May 4, 11:)3 a.m.): Since the minor bearish pattern we used yesterday to make money (from the long side!) has gotten stopped out, and because the upturn has come from the midpoint pivot of a corrective pattern, we will gaze upward
The pattern in the chart replicates the one displayed here last week, but with an additional, plunging bar that shows why the once-outrageous target at 3994.75 remains a lock-up. We confidently assumed it would be reached when sellers obliterated the pattern's 4312 midpoint support a little more than a week ago. On Friday, they wrecked another Hidden Pivot, the 4146 'D' target of a lesser pattern, all but clinching more downside to D=3994.75. The pattern is too obvious to suggest that bottom-fishing with the usual nickel-and-dime stop-loss will be easy, but even so, there is no way in hell the futures will not rebound tradeably from somewhere very close to the target. Shorting corrective peaks will be yet more difficult, although nothing we can't handle with some diligent crowdsourcing in the Trading Room. _____ UPDATE (May 3, 10:35 p.m.): The pattern shown is a fine specimen of my favorite kind of gnarliness, which explains why it produced several 'mechanical' winners during today's session. If you made money on the long side, use some of it to cushion a stop-loss shorting at D=4210.25. You'll be on your on if the order fills. _______ UPDATE (May 4, 10:36 p.m.): If you're eager to get short -- as who on Earth is not? - fixate on the dotted red line I've drawn at 4401.75 as a place to set it up. This is the sweet spot of the 'discomfort zone' we love to use, and although it lies an impressive leap above current levels, it shouldn't prove too difficult for DaScumballs to achieve. They drilled shorts a new orifice today, then strung them up with piano wire and left them hanging a millimeter from last week's peak. This is how powerful rallies happen with zero bullish buying, and we should always be careful about
The week ended with a feebly impulsive rally, so we shouldn't get our hopes too high that the June contract will somehow avoid a predicted fall to at least the 1825.80 target of the pattern shown. It ha s been working fairly well for trading purposes although, strictly speaking, the rally to the red line on Friday did not trigger a valid 'mechanical' short because it came from a low that missed touching p2 by a hair's breadth. ______ UPDATE (May 2, 6:47 p.m.): Mechanical trades rated higher the '7' are rare, but here's one that triggered today -- on the monthly chart, no less! With more than $60,000 of initial risk on four contracts, however, this is one you should either paper trade or execute using 'camouflage' in the full-size contract or the mini. My target for the corrective move, basis the June contract, suggests the futures will go lower, to at least 1825.80, before they can turn around. The 2329.10 rally target is hardly a done deal, but it is not looking too shabby for the long term, given the way buyers impaled p=2011 in March. _______ UPDATE (May 4, 10:45 p.m.): So far, so good! The corrective rally implied in my last update has traveled $50 since bottoming. This occurred a millimeter from an 1852.30 low I'd rated 8.1 for 'mechanical' longs. Anyone aboard? _______ UPDATE (May 5, 9:31 p.m.): Yet another promising rally turned to dross when the futures reversed near the opening and gave up nearly all of the previous day's gains. I'll have little more to say ahead of the weekend.
The sketchy impulse leg shown in the chart yields a picture whose discouragements are congruent with June Gold's. It is bullish overall, but the slight failure of the follow-through leg to reach the p midpoint resistance at 27.61 is telling. Strictly speaking, the futures did not trigger a 'mechanical' buy when they fell thereafter to the green line (x=24.58); nor did I suggest buying there. The question now is whether sellers will stop out the pattern's 'C' low at 21.56, gratuitously or otherwise. My hunch is they won't, but neither do I expect a robust recovery to p, let alone a move through it. We should keep an open mind nonetheless, since bullion has a nasty habit of looking like hell...until it doesn't.
As pleasant as it may have been to see AAPL get its ass kicked last week, this didn't make the chart any more bearish. For the time being, that's why we will continue to use the nastier but more predictable chart of the E-Mini S&Ps to tell us exactly what's going on. I don't want to count on the rightmost 7 or 8 bars of the chart to give us a pattern and a downside target, since the would-be A-B leg did not exceed any prior lows. However, it is good enough for government work, and that's why I expect D=150.06 to synch up with the 3994 target we are using in the E-Mini S&Ps. Moreover, it can be bottom-fished, and the ersatz pattern used to get short 'mechanically', since this particular entry tactic has so much forgiveness built into it. ______ UPDATE (May 4, 11:08 p.m.): We shouldn't expect the thieves, pederasts and carnival geeks who have worked this stock since 2009 to go quietly into the night. The current, rip-your-face-off short squeeze has been impressive over the last three days, but it would still need to take out the 171.53 peak shown in this chart before it becomes a serious menace to bears' well-being. _______ UPDATE (May 5, 9:37 p.m.): Today's relapse took the menace out of AAPL's ferocious short-squeeze earlier in the week. Now, look for a test of the 150.10 low recorded on March 14.
