Friday's lurch higher easily penetrated the 3344 midpoint resistance of the pattern shown, implying the uptrend will continue to at least 3425.40. Since the rally ended the day just beneath our sweet spot for setting up mechanical trades, I would strongly recommend tightly stopped bottom-fishing on a pullback to x=3304.30 (the green line). If you get on board and make a few bucks on the way up, use a portion of your profits to cushion a stop-loss from 3425.40.
Use the Hidden Pivot levels shown to trade the futures in the weeks ahead. That implies you can: 1) bottom-fish at 35.946; 2) get short 'mechanically' on a rally to x=37.928, provided p=35.946 has been exceeded to the downside; 3) bottom-fish at p2=33.964; and 4) bottom-fish even more aggressively at d=31.982. As always, a decisive penetration of p would imply more slippage to d, at least. I've obscured the point 'a' high for proprietary reasons, but you can find it yourself by working backward from the target.
The stock market is priced for perfection in a grotesquely imperfect world. Trump provided a fleeting respite by showing us how the Art of the Deal works in trade negotiations. Fox News rightly rubbed the legacy media’s face in his success while the President took a half-dozen victory laps to muted global applause. This may turn out to be more than he deserves, since no one can predict what will come of the new taxes that have been imposed on global trade. Because eggheads, editorialists and Bloomberg’s talking heads have no deep understanding of tariffs, here’s an interesting thought from someone who does — Reagan budget director David Stockman. The point he makes is too basic to ignore: If capitalism is truly free and functioning, he points out, America doesn’t need a dealmaker in the White House. Affordability is our big problem anyway, as the nation’s erstwhile middle class continues to sink into poverty. Nearly everything we buy has become not merely expensive, but too expensive, particularly big-ticket items like homes and automobiles. The average price of a used car hit $32,000, up from $23,000 just three years ago. It can cost $400 or more to take a family to a ballgame, where a hot dog and a beer are now $25. The $9.99 breakfast special in Las Vegas has risen to $29.99. And if shrinkflation at the supermarket gets any worse, we’ll be buying staples by the gram rather than the ounce. Putin’s Hole Cards Inflation will not be the worst of our problems if the Ukraine war takes a turn for the worse. Putin is Trump’s only equal in global power and influence, and he will not bend to Trump’s ultimatums like the pantywaists
Bitcoin is getting pounded this weekend, but my hunch is that it is more than just routine selling. The slippage so far amounts to more than $5k in the last 24 hours, but you should brace for a possible fall to as low as 88,293, the 'd' target of the pattern shown. A decisive plunge through the p=105,762, the midpoint Hidden Pivot support, would make that no worse than an even-odds bet. My much-darkened outlook is congruent with the very bearish forecast that will go out for the E-Mini S&Ps tomorrow afternoon. Friday's hard selling created an impulse leg on the daily chart that looks to be the start of a more serious retrenchment. _____ UPDATE (Aug 6, 7:16 p.m.): Rallies in Bitcoin and the E-Mini-S&Ps feel like distributive fakes to me. We may know soon.
The chart shown is the simplest picture of the aging bull market that I can offer. It says that two events are highly likely: 1) the 6728.50 target will be reached, and 2) an important top will form there, possibly marking the end of a bull era begun more than 16 years ago. There is also a very small chance the party ended on Friday, since the futures finished the week within less than a point of a 6428 target that kept us confidently aboard the trend for the last 184 points. The target was an important Hidden Pivot, although not quite as important as the one at 6728. Trends occasionally fail without reaching their ultimate 'D' targets, but only time will tell whether this is about to happen. More likely is that short covering will power past the lesser target in mere days, much as it has scores of times since 2009.
MSFT's monthly chart is companionable with the picture I've provided of the September E-Mini S&Ps (see above). The move through p=469.29, the midpoint Hidden Pivot, occurred with such swift force that there can be little doubt the stock will achieve D=593.75, exactly 80 points above. A swoon first to x=407.04, the green line, seems unlikely, but it would trigger a very enticing 'mechanical' buy that you shouldn't pass up. A shortable stall at p2=531.54, (the secondary Hidden Pivot) is probably a better bet, so be ready with a tightly stopped offer if the stock gets there this week. The one-off 'A' low I've chosen is well formed and could give us an edge if most other traders use the 'marquee low' at 213.43 to peg a top. it would be nearly six points above ours, at 599.s1.
I've raised the bar somewhat so that we don't get suckered by yet another failed rally. I'm already on record as saying the bear market ended, possibly with October's 82.42 low. But I'd feel more confident about this if TLT takes an uncorrected leap above the two peaks shown. If it relapses instead, I would still expect no worse than a marginal penetration of the October low, followed by a sustained rally whose steepening pitch will leave little doubt that an important trend change has occurred.
How are you coping with gold's endless dither? It just entered its fourth month, and there is not much to celebrate. Of course, everyone "knows" it will be moving higher. Just not now. Last week's tout warned subscribers not to get too excited if the futures should take flight, since no rally since April has shown any follow-through. And so it went yet again, with a fleeting surge to nowhere that was reversed just as quickly. Looking ahead, there is a magnetic Hidden Pivot target at 3695 that gold's handlers will not be able to put off indefinitely. Keep it in mind as we endure the anomie of markets that have been rigged by Hamptons capos for silent running.
The September contract is bound for a rendezvous with the 40.755 target shown. This has been unavoidable since early June, when it popped through a midpoint resistance at 34.598 and never looked back. The picture of strength is corroborated by the absence of any pullbacks sufficient to enable a 'mechanical' buy on the weekly chart at any time along the way. If Comex Gold reaches a commensurate target at 3695, it would push the gold/silver ratio up a tad, from a current 87 to 90.
Bitcoin fell by nearly $7,000 as last week wore on. This may sound like quite a pounding, but just look at the weekly chart if you want to see this puny correction in perspective. Notice that the 131,158 target first flagged here months ago lies within easy distance, as achievable as ever. And the word 'pounding' would be a misnomer, since there are no heavy sellers in the Bitcoin world, only deep-pocketed sponsors who occasionally pull their bids in order to bring bitcoin down to relative bargain levels. Bitcoin also remains easily tradable, since the Hidden Pivot Method thrives on volatility. Accordingly, I'll suggest bottom-fishing at 110,270 with a tight stop if it gets down there, and shorting at 131,158, also with a tight stop, if you've profited on the way up. Incidentally, when I suggest using a tight stop-loss, my own method is to fashion a 'trigger' with an ABCD pattern taken from a small-interval chart. However you choose to limit entry risk, the potential loss should be held to whatever sum you carry in your wallet, even trading a vehicle with six-figure value.
