The little hoser spent most of the week tap dancing on a 4388 midpoint Hidden Pivot that had served as our minimum downside objective. Its decisive breach would make further slippage to D=4146.75 more likely, but sellers have looked so gutless lately that we shouldn't take this for granted. More immediately, p2=4267.82 can be used a a minimum downside objective for the near term. I still doubt that bulls have the strength or enthusiasm to stop out C=4631 of the bearish pattern, but let's keep an open mind, lest they use some inscrutable pronouncement from Powell & Co. to catalyze a volume-less short squeeze. _______ UPDATE (Apr 20, 11:22 p.m.): Just a little more upside to x=4510 would trigger a mechanical short, stop 4631.25, but I am recommending the trade only to subscribers who can cut the implied entry risk of $6,000 per contract down to $240 or less. In practice, this will require a 'camouflage' set-up on the 15-minute chart or less. _______ UPDATE (Apr 21, 11:24 p..): The futures plunged 70 points after topping a single point from the 4510 benchmark flagged above. No one mentioned getting short as the tout update had suggested, even though I posted instructions for initiating the trade belatedly with a mechanical trigger.
To alleviate the brutal tedium of gold's dance just beneath my old target, I've created a new, slightly lower target at 1986.40 that has already been achieved. This will not affect the pattern's promise to reward 'mechanical' buyers with relatively low-risk profits, since the tradeable implications of its powerful impulse leg cannot be easily subverted. It will also give us a good chance to catch a potentially tradeable top at D=2079.50 with a high degree of precision. This may take great patience, but the wait will be made more bearable by the knowledge that a nasty swoon would likely spell opportunity. _______ UPDATE (Apr 18, 9:24 a.m.): With just a day's rest, buyers have blown through p=1986.40, all but guaranteeing more upside over the near term to at least p2=2032.90. _______ UPDATE (Apr 20, 12:56 p.m.): Yes, the pullback to x=1939.80 makes for an appealing 'mechanical' buy'. However, the implied risk of $18,000 risk on four contracts with a stop-loss at 1893.10 warrants doing the trade only if you are familiar with 'camouflage' triggers that could pare the theoretical risk down to around $1600. _______ UPDATE (Apr 20, 11:48 p.m.): The futures have rallied $20 off a 1941.00 low that missed the green line by a front-run 1.20. If you did the trade, take 25% off at a current 1953.30 and set a 1942.30 stop-loss for what remains. Our price objective for two of the three contracts still held is p=1986.40.
May Silver's chart is somewhat more bullish than gold's because the C-D leg of the pattern shown has decisively penetrated the 25.83 midpoint resistance. That's notwithstanding the fact that the rally failed to surpass the important 'external' peak at 26.16 recorded two months ago. The p midpoint is the more challenging of the two obstacles, and its breach strongly implies buyers will handle the peak easily when the time comes. If that's what happens, look for the futures to continue their ascent to at least p2=26,73, or even to D=27.62. _______ UPDATE (Apr 20, 1:04 a.m.): A fall to x=24.93 would trip a 'mechanical' buy, stop 24.04. That implies entry risk of nearly $4500 per contract, meaning you'll need to execute the trade camo-style on a chart of 15-minute degree or less to get aboard without betting the ranch. _____ UPDATE (Apr 21, 11:27): The 'mechanical' buy suggested above was deeply underwater Thursday night. Several subscribers reported getting aboard, but none mentioned how, so I cannot offer much help with risk control. The trade has a 50% chance of working at this point, but even if it does, it's not going to be pretty.
The hellish collapse of the last two weeks has brought TLT within easy distance of a 116.06 target that has been in play since January. Given the size of the Treasury bond market, a fall of this magnitude will hold very significant implications for the global banking system. It is also a thumb in the eye for the charlatans who run the central bank, since market action has pre-empted the Fed's need to tighten much of anything. Given the clarity of the pattern, it seems extremely unlikely the downtrend will significantly overshoot D=116.06. That means skyrocketing yields on the long bond are about to level off or possibly reverse. _______ UPDATE (May 5, 10:26 a.m.): TLT has breached the 116.06 pivot and traded as low as 115.36 this morning, but I doubt this can go much farther without a substantial bounce. Without divulging proprietary details, a 'reverse-pattern' buy would trigger with a bounce of 1.33 points from any low between the so-far low at 115.36 and no lower than 114.80. (That implies a trigger currently and tentatively at 116.70). The initial target for profit-taking would be 1.33 points above the entry price. I am still forecasting an important top in the 10-Year Note, currently trading near 3.04%, at 3.24%. ______ UPDATE (May 5, 9:35 p.m.): In the chat room this afternoon, I suggested using the 113.21 downside target of a lesser pattern now that the granite pivot at 116.06 has been pulverized. It would take a print at 119.32, however, to suggest a serious turn is under way.
The rally has tacked on $15 a barrel since a Hidden Pivot support at at 93.07 nailed the bottom within 14 cents a week ago. Now, judging from the way in which buyers obliterated the 104.91 midpoint resistance last Thursday, the move is all but certain to achieve the 116.89 target of the reverse pattern shown in the inset. If it gets past that Hidden Pivot with ease, we'll be looking at more upside to as high as 130.00 by the end of April or early May. ______ UPDATE (Apr 20, 1:07 a.m.): A fall to x=98.92 would trigger a 'mechanical' buy with entry risk per contract of $6000 per contract, assuming stop-loss at 92.92. _______ UPDATE (Apr 21, 11:38 p.m.): The mechanical buy triggered at 102.30, basis the June contract, and a subsequent rally to 104.32 could have been used to exit with a decent partial profit. If anyone is still on board, please let me know in the chat room so that I can determine whether to establish a tracking position.
This chart restores the original 3.24% target for yields on the 30-Year Bond. It was rickismed down to 3.22% for a short while due to the usual misdrawn coordinate. Notice that last week's peak came in a crucial spot, a zillionth of an inch below the pattern's secondary resistance at 2.85%. I doubt we'll see much of a stall here, meaning 3.24% is coming soon, Given the clarity of the pattern, however, a top of at least intermediate degree seems extremely likely, so look for a leveling off or reversal in the ensuing weeks. If, heaven help us, rates simply blow past D, that would have enormously significant implications for a global asset boom that was going to end sooner or later anyway.
I was going to drop Bertie from the list to see if anyone noticed, but force of habit has cause me to leave it. Rather than stoke your enthusiasm by reminding you of a 61,163 rally target, however, I won't even highlight this number in green. Instead, I'll call your attention to the 36,725 target of the corrective patterns shown in the inset. It has yet to gift us with any decent 'mechanical' shorts, but I wouldn't rule out the prospect of bottom-fishing with a 'counterintuitive' set-up if and when 36,725 is achieved. The pattern is not so obvious that it should attract much interest from the usual droolers and math majors. ______ UPDATE (Apr 27, 12:06 a.m.): Bertie finally did trip a 'mechanical' short on last week's run-up to 42,468, but, like, who cares, right? _______ UPDATE (May 5, 11:17 a.m.): I just posted the following in the chat room in response to a query about how low bitcoin can go. The 36,725 downside target I've been using for bitcoin was the most conservative possible, since it used a relatively small 'reverse' pattern to project 'D'. If and when 36,725 gives way, I would simply switch to the next larger pattern to project a new target. In this case, it is a conventional pattern that projects 29,130 as a likely low. Here's the chart.
For many of us, as pleasurable as it might be to picture Twitter in the hands of Elon Musk, and to imagine a despairing Jack Dorsey committing seppuku, Musk should save his billions for more useful purposes. He could start by building a competitive platform for a hundredth of what he's offered to pay for Twitter. He could also buy an existing platform such as the up-and-coming TruthSocial for a relative pittance. What is Twitter's value, after all? The company has been losing steady money offering a place for 'progressive' extremists to set up sniper positions online. But would allowing the rest of us to post there improve the bottom line? There are reason to doubt this, for in fact the resulting free-for-all could wind up driving subscribers and advertisers away. Musk says he simply wants to promote free speech. While it is true that nearly any conceivable change in Twitter's content would bring improvement, one suspects that his main goal is to punish the platform's narrow-minded managers for being the crypto-Stalinist apparatchiks they are. That being the case, and assuming Musk's offer is successful, we should look for him to relocate Twitter from San Francisco to a red-state stronghold. Enid in Oklahoma comes to mind. Or perhaps Bristol, Tennessee. Or Bullhead City, Arizona. Woke-ism Under Attack Regardless of whether the deal flies -- and there are good reasons to doubt that it will -- Musk has provoked a healthy discussion of the impact on America of Twitter's heavy-handed censorship. Woke-ism is on the run, under attack lately not just from political conservatives, but from centrists and others who have tired of living under wacky rules designed to benefit the few at the expense of the many. Most of us would be content to live and let live. November's mid-term
For more than a year, I've recommended what my friend Doug Behnfield calls the 'barbell strategy' to secure one's nest egg against the deflationary hard times that lie ahead. As formulated by Doug, a wealth-management advisor based in Boulder, the barbell portfolio is constructed with gold and bonds as offsets. Try to imagine the worst of times and you may have difficulty concocting a scenario in which T-Bonds and munis on one hand, and gold on the other, would fall together. However, it is relatively easy to imagine circumstances in which either or even both sides of the hedge would rise in times of extreme economic adversity. I had suggested holding off on the T-Bond portion of the hedge until interest rates peak. That day is coming, probably sooner than most 'experts' think, but we are not quite there yet. Yields on the Ten-Year Note ended last week at 2.71%, but my forecast calls for a top, or at least a lengthy leveling off, at exactly 3.24%. This is somewhat higher than the 3.02% rate I'd projected for the 30-Year T-Bond, the difference lying in the way their respective rallies have unfolded. For purposes of optimizing the barbell hedge, however, I'd suggest using the 3.24% rate indicated in the chart above. No More Volckers A top at that level would be a far cry from the 20% peak in June 1981 that followed two years of tightening by Paul Volcker. As a result, inflation remained subdued for more than 30 years. The effects of tightening this time around could not conceivably turn out to be as benign as before because the debt sums affected are exponentially larger. To cite one particularly menacing example, Third World debts amounted to perhaps $1.5 trillion in the mid-1980s. This sum was deemed sufficient to
I've slightly raised my target to 3.24%, but I still expect the pattern shown to capture the main features of this bull move in tradeable fashion. That implies p2=2.85% can be used not only as a minimum upside projection, but also as a place to scalp short against the trend. However, the way last week's blitz shredded the p2 resistance leaves little doubt that rates on the Ten-Year will hit 3.24% before they have a chance to level off.
