I went out on a limb recently with a prediction that T-Bonds had made an important low. Last week's price action in this ETF was hardly reassuring, however. Not only did it breach a midpoint Hidden Pivot support I'd noted at 85.99, it also generated a bearish impulse leg on the daily chart. Let's give it the slight benefit of the doubt for now, since there are two remaining HP supports to be breached before we throw in the towel. They lie, respectively, at 84.76 (p2) and 83.53 (d).
When MSFT overshot a longstanding Hidden Pivot target at 503.69, it signaled more upside to at least 516.95. That is why I advised buying the stock 'mechanically' if it pulled back to 495.76 (the green line). Alas, it corrected no lower than 497.80 last week, stranding our bid. The trade remains viable, however, and you can keep bidding there, stop 448.60, until such time as the stock pushes above 509.89. (Alternatively, you should use a 'camo' trigger to initiate the trade if you know how, since it could cut the initial risk by as much as 95%.) The 516.95 target is still valid, as implied above and you can short there with a stop-loss as tight as 0.70, provided you've profited on the way up.
Gold's tedious consolidation for a shot at 3681.60 is now well into its third month, sapping my enthusiasm for pretending there is something interesting to talk about. The August contract has tripped several profitable 'mechanical' buy signals since mid-May, but each required close tending to produce a win. For the time being, the best opportunity we are likely to see would entail buying at the 'd' target of a reverse pattern on the chart shown, or perhaps the 60-minute. I will signal this if warranted.
The pattern shown is ugly-gnarly, but there is no mistaking the power of the rally that pushed it past p=34.75 in early June. This all but clinched more upside to D=41.06 in the weeks ahead. Our best opportunity to get long would be via a bid at 'd' of a reverse pattern. There have been no sufficient pullbacks on the weekly chart to enable this, but the intraday charts will nearly always provide the signal we're looking for. Query me in the chat room when appropriate and I may be able to provide timely guidance.
Nvidia became the world's first $4 trillion company last week, leapfrogging Microsoft, Tesla, Google and every other company struggling to stay in the AI game. Our money is on Musk to compete the hardest. He is Nvidia's biggest customer for their most powerful chips, which sell for as much as $200,000. Musk has been buying them by the tens of thousands. He recently converted a vacuum cleaner factory in Tennessee into a site for the world's largest supercomputer. It draws so much power that the cooling plant alone cost will cost $80 million. The machine will be used to train Grok, Musk's horse in an AI field crowded with corporate strivers. Grok reportedly overtook competitors recently with a demonstration that showed the app capable of thinking almost like a human. Even skeptics were impressed with the way Grok figured out a novel way for hospitals to save power. What startled them, however, was that Grok hadn't even been asked about this; the AI assistant simply inferred and suggested it based on another, seemingly unrelated, energy solution it had worked on that even MIT-trained engineers hadn't thought of. But even if Nvidia has yet a few more prospective customers in Musk's league, is the company worth $4 trillion? A physicist friend of mine who uses AI intensively in his business said the stock is only warming up and that NVDA's current price is a certain bet to double yet again. But exactly what will their chip customers sell to the world that could possibly justify such astronomical valuations? It would have to be much more than mere gains in productivity -- or even that old investible standby, a cure for cancer. Monsters from the Id In an earlier commentary, I suggested facetiously that Nvidia and companies immediately downstream of it were
The irresistible power of the stock market's melt-up is on display in the fleeting B-C pullback shown in the chart (see inset). That's all it took to recharge this vehicle for an impending, 121-point surge to the 6429.00 'D' target. There can be little doubt the futures will get there, given the ease with which they penetrated the 6306.13 midpoint resistance last Wednesday and then closed above it. There are two compelling trades left in the pattern: a mechanical 'buy' at x=6244.50 if the futures should pull back sharply, and a tightly stopped short at D=6429.00 if you've profited on the way up. ________ UPDATE (Jul 7, 2:53 p.m. EDT): Today's plunge brought the futures down to within less than two points of x=6244.50, where I had suggested a 'mechanical' buy. If you got aboard near the low, I'd recommend taking a partial profit on the 21-point bounce that has occurred so far.
TLT weakened last week after creating a bullish impulse leg on the daily chart, generating a theoretical sell signal in the process. If the so-far moderate decline is merely corrective, we should see a tradable rebound from the 85.99 midpoint Hidden Pivot support shown in the chart (inset). That is what I expect, but if the support gives way, especially on a closing basis, expect the slippage to continue down to at least p2=84.76, or even to a worst-case d=83.53. That would leave the important low at 83.30 recorded on May 22 intact, but only barely.
The pattern shown in the inset sucks for trading because the 'a' and 'c' highs are nearly equal, and because the a-b leg did not surpass any prior 'external' lows. That's why I'll suggest paper trading this one unless you know how to craft a small-pattern trigger (aka 'camouflage') that can reduce the $8200 entry risk to $270 or less per contract. However, merely spectating should help us determine with greater confidence whether the soul-crushing tedium of the last two months is more likely to give way to a breakout, or a breakdown. Regardless, if the August contract touches the green line (x=3394.70), that would trigger a theoretical 'mechanical' short, stop 3477. If the hypothetical trade produces a profit, that will imply that bears have at least a small edge at the moment. ______ UPDATE (Jul 7, 1:45 a.m. EDT): The futures will fall to at least 3301.80 before they can find a foothold. Bottom-fish there with a tight rABC trigger if you are familiar with the tactic. Otherwise, I'd suggest spectating.
The chart provides no strong clues concerning the direction of the next big move. Usually, charts of lesser degree are helpful when the bigger charts are unclear, as is currently the case in Comex Silver. In this case, however, last Wednesday's feint to the red line failed to touch it, denying us an opportunity to get short 'mechanically' when the futures rallied back up to the green line (x=36.939). The most promising trade I can discern in this chart would be to buy a swoon to d=35.812. That seems unlikely, but we should set a screen alert nonetheless so that we won't miss the opportunity if it comes.
We're all waiting anxiously to see whether Trump's bold initiatives usher in a golden economic era. If this is going to happen, we should see the Dow Industrial lurch toward 100,000 at any time. Just a few short weeks ago, you could have counted me among the skeptics. It is a habit that has become deeply ingrained in me after writing collapsitarian essays and editorials for the last 30 years. However, I have been so wrong about this for so many years that I would never, ever insist that such a seemingly outrageous rally is impossible. Skeptics aside, there are perhaps 80 to 100 million Americans rooting with all their might for the President to fall on his face. This is Trump Derangement Syndrome at its stupidest and most hateful, since a really bad year for the President could mean our children will have to suffer through a Second Great Depression. The good/bad news is that we should know soon how things are likely to turn out. That's because the stock market is in fly-or-die mode, so dangerously pumped with crazy, Wall Street hype and AI hubris that it cannot possibly sustain altitude unless investors decide to go all-in, and soon. It would be a peculiar time for stocks to take flight, since U.S. consumers are tapped out and falling increasingly behind on car and house payments, and GDP shrank by 0.4% in the first quarter. We may have entered a recession, and it has the potential to become a devastating one because, publicly and privately, the nation is so deep in hock. It is not yet so deep, however, that an adroitly engineered bear squeeze could not prevent a potentially fatal, contractionary mindset from taking root. America Ascendant The graph above holds the key to our best hopes and
