This should be interesting, since the Dollar Index has triggered an appealing 'mechanical' buy with its return to the green line earlier this month. A stop-loss at 99.59 would apply, although we won't be trading on the signal. A sustained rally would end the stock-market rally begun in October, since there is nothing that Wall Street, the banksters and everyone who owes money should fear more than a resurgent dollar. My hunch is that the rally would need to reach p2=109.66 or so before still-dim perceptions of the threat would sharpen. The first to feel the pain would be the growing hoard of motorists whose cars, including a few Bentleys, are slated for repossession. I'm looking for this debtor epiphany to occur simultaneously with MSFT's fall from a 430.58 bull-market target billboarded here earlier.
The short squeeze turned savage last week with a thrust that surpassed not only a 'secondary pivot' of daily-chart degree at 4754, but July's watershed peak at 4738 as well. This show of bravado all but locked up more upside to at least 4950.00, the Hidden Pivot target of a bull cycle begun nine months ago. The flurry of crazed buying went into overdrive on Wednesday, spurred by a flash of 'pivot' porn from Jerome Powell that was subsequently retracted, sort of. With the S&Ps in a blowoff, we should expect them to reach the target in less time than the month it took to get from p to p2. _______ UPDATE (Dec 20, 11:57 p.m.): When stocks plunge inexplicably as they did this afternoon, it's tempting to think they are at long last starting to respond rationally to troublesome developments in the real world. Not necessarily. Although the herd may in fact be infected with fatal spores of madness, I am sticking with my ambitious rally target at 4950.00. My confidence is based on the way buyers easily conquered the daunting midpoint resistance at 4559.00 shown in the chart.
It wasn't long ago that we were reading about a menacing slowdown of iPhone sales in China, but the news evidently has been forgotten with the stock's push into new record territory. It has trailed Microsoft for a few good reasons but now appears eager to make up for lost time. Most immediately, that would portend a run-up over the very near term to 204.01, the Hidden Pivot target of the eye-jarring pattern shown in the chart. If bears push past it easily with feverish short-covering in the days ahead, it would bring into play a 253.96 target derived from a lower 'A' at 53.15 recorded in March 2020.
Feb Gold has been the unwitting slave of the bullish pattern show, with a 2250.00 target that has been in play since mid-October. The bounce off last week's low was encouraging, since the futures managed to finish the week with a gain that left it comfortably above the midpoint of the weekly range. Nasty takedowns are still possible, but $2000 may have become a floor beneath which bulls would swarm thin, insincere offers. _______ UPDATE (Dec 19, 1:47 p.m.): I said in the chat room that Feb Gold would hit 2086, but Martin Armstrong's cautionary cited in the chat room has reminded me that I should wait for that to happen instead of pretending I have a crystal ball that says it will. The chart is mildly encouraging because the recent high at 2152 impulsively exceeded May's 2140 peak. That means the subsequent plunge to 1987 was/is corrective. But there are no guarantees that the theoretical buy signal at x=2037 will get the futures to p=2086.4. I do hope this happens, however, since price action at p can tell us a lot about the health and sincerity of the uptrend since October. In theory, the bullish impulsiveness of the weekly chart could survive a plunge all the way down to 1845, even if few bulls would be left standing to cheer it.
Silver has pulled out of a steep dive that retraced more than 80% of the rally begun in mid-November from 22.26. We are likely to know soon whether the reversal is capable of achieving the 26.865 target shown, since a crucial resistance lies just above in the form of a Hidden Pivot midpoint resistance at 24.82, As always, an easy penetration of this obstacle, or better yet two consecutively weekly closes above it, would suggest bulls are back in charge. This seems very likely because the impulse leg that drove the futures to their most recent high at 26.34 surpassed two 'external' peaks and one 'internal' without taking a breather.
Although touts for bullion vehicles listed just above are bullish, GDXJ's weekly chart gives us reason for caution. Notice how the recent high at 39.47 failed to surpass the 'external' peak at 39.70 recorded in July. This display of timidity, which narrowly failed to generate a fresh impulse leg, is not necessarily the kiss of death, but neither is it very encouraging. It would be remedied by a robust blast above 39.47 this week, but until such time as that happens, I'll keep the yellow flag unfurled. Am unqualified success would portend more upside to 41.81.
Although the rally from the October low at 82.74 has seemed impressive, it has yet to surpass any significant obstacles. The first test lies just above in the form of a Hidden Pivot resistance at 100.57, the 'D' target of a clear and compelling reverse pattern. If buyers are able to get past it, the next significant challenge would be at the pattern's 'B high at 109.68; and thence at 120.69, an imposing peak from early August. The decisiveness of any move above these benchmarks would be a factor in determining the rally's staying power. _____ UPDATE (Jan 5); The puts that subscribers bought for 0.19 traded for ten times that today on hard selling that drew only a brief, contrarian respite in the first hour. TLT finished just off the low of the day and could continue falling to the 95.26 target shown in this chart before it gets a foothold.
The downtrend's so-far failure to reach the 64.80 target could be a sign of incipient strength or even the start of a reversal of the mini-bear market that has cut oil's price by 23% since it topped in September at 88.21 a barrel. Regardless, the February contract would become a fetching 'mechanical' short at the green line (x=75.88), stop 79.58. If there's an expression of interest in the chat room at the appropriate time, I'll provide guidance for doing so with a 'camouflage' trigger.
Most of us had been expecting gold to explode through the $2000 "barrier" and soar into the wild blue yonder. Instead, it spasmed to $2152 for a nanosecond on December 4, then crashed back down below $2000 like an anvil dropped into an elevator shaft. What happened? Gold is most certainly in a bull market, even if the ascent has been tortuous. One might think bull-market psychology would limit the extent to which bullion's price can be manipulated, especially lower. And it has, evidently, judging from the way the last takedown attempt reversed without even getting close to a prior low at 1955. This is despite the fact that gold's price is controlled by white-collar criminals who act with the blessings and complicity of regulators and their evil masters in the upper echelons of banking. We suggest that you Google our old friend Andy Maguire if you want to understand exactly how these slimeballs from Wharton, Sloan and Stanford operate. Their mothers actually believe they are respectable businessmen. Use the Trendline So when might we expect gold to get off the launching pad with enough firepower to turn the bad guys' pelotas into roasted chestnuts? It is logical to think this will happen when gold has finished consolidating at the $2000 level. However, because it has spent the last year making a muddle of this idea, I'll suggest using the trendline in the chart above to determine when COMEX futures have broken out for a run-up to at least $2500. That implies a consolidation above $2100 rather than at the ponderously symbolic $2000. A second, decisive poke above $2100 this month or next would hasten the process, especially if the futures can settle above the trendline for two or more consecutive weeks. Bulls can afford to be patient, since anyone
TLT's leap last week, which left two bullish gaps on the daily chart, was less encouraging than it seemed. For an uptrend to remain healthy, it must continually renew itself by surpassing a prior peak with each new upthrust. Although the latest thrust did exceed a cluster of small highs recorded in mid-September, it failed to go the extra inch needed to get past August 31's summit at 97.05. An energetic upward reversal early in the week could rectify this shortcoming, but if TLT simply drifts sideways-to-lower, it would diminish the putative strength of the ascent begun from 82.42 on October 23. I am being finicky to avoid overlooking the possibility that interest rates have merely been correcting, and that Powell plans to let market forces take them above 5%. ______ UPDATE (Dec 13, 10:51 p.m.): DaBoyz on the night shift have succeeded in wafting TLT as high as 97.14, surpassing the Aug 31 high. The move is therefore impulsive and will refresh the bullish energy of the daily chart.
