We're using the 4673.50 target of a larger pattern to project a major top, but the 4612.75 Hidden Pivot at the top end of this pattern can serve for now as a minimum upside target for the near term. The point 'A' low is a muddle of bars, but the target should still work for purposes of getting short. The textbook trigger interval of nearly 300 points poses an initial risk that would be unacceptable. To cut it down to size, we can look for a 'camouflage' set-up at the appropriate time. Meanwhile, I'll suggest trading with a bullish bias if stocks open moderately lower-to-unchanged Sunday night.
The dollar has been falling for seven weeks, but a chart stretching back two years shows that the bull market begun at that time still has credibility if no longer youthful vigor. My bull market target remains 124.79, with a lesser objective at 112.14 that can serve as a minimum upside object for 2024. Notice that just a little more downside to the green line (x=102.95) would trigger a routine 'mechanical' buy. Thereafter, the anticipated rally to at least p=106.31 would give us an objective way to determine whether the bull is robust enough to reach the targets given above. If this occurs, it would imply that the global financial system is no longer in Kansas. Indeed, deflationary pressure on all who owe dollars would have turned the commercial banking system and the American heartland into a landscape of bankruptcies.
Gold delivered on a 'mechanical' buy last week without getting anywhere near the 1955 stop-loss that would have applied. I'll therefore stick with the longstanding target at 2070.70, although the impulse leg that produced it leaves something to be desired. Specifically, it peaked without having exceeded the 'external' peak at 2028.60 recorded on July 20. The rally was impulsive nonetheless because it surpassed other 'external' peaks along the way, but the fact that it looked the high at 2028.60 in the eye, so to speak, without being able to hurdle it suggests reticence and uncertainty in buyers. ______ UPDATE (Nov 24): Scant progress last week produced no change in my analysis or outlook. _______ UPDATE (Nov 28, 4:12 p.m.): With the futures head-butting peaks recorded on Halloween near $2,000, gold's handlers had little choice but to let 'er rip toward the $2070 target we've been using to keep from getting fooled or scared into submission. The smaller pattern shown in this chart, with a 2074.30 target, provides a finer shading if you want to trade this vehicle. ________ UPDATE (Nov 29, 10:53 a.m.): The effortless move through p=2033 of this pattern has all but clinched more upside over the next two weeks to at least 2131.00. Once buyers have pulverized that Hidden Pivot resistance, look for a blitzkrieg rally to 2200 and higher. ________ UPDATE (Dec 1, 10:45 a.m.): February Gold has precisely achieved a $2073 target equivalent to the still unachieved one at $2070 in the December contract. This is a contango oddity, but our focus should be on the February contract, since it is the active month. Here's the chart: https://bit.ly/3N7YgD7
More progress to at least 35.68, the Hidden Pivot target of the reverse pattern shown, seems all but certain, but it's what happens after that that can help us gauge the strength of the uptrend begun in early October from around 30. The first peak lies at 36.85, an 'internal' high just 17 cents above the target. The second, an 'external' that should offer more resistance, is at 36.14. It is important because a push past it would generate the most powerful impulse leg we've seen in this vehicle since early spring. That would set up a likely test of the 39.70 peak from mid-July and thence a possible run-up into the low-to-mid-40s. ________ UPDATE (Nov 24): A push past the 36.14 peak note above appears imminent. However, I will be paying close attention to whether the rally stalls at 36.61, a voodoo number that is shortable with a reverse-pattern trigger interval of 50 cents. _______ UPDATE (Nov 28, 4:42 p.m.): GDXJ has blown past the p=36.28 midpoint resistance of this pattern with such force that the 42.09 rally target I first identified here six weeks ago in mid-October should now be viewed as all but certain to be achieved.
Silver's chart, although clearly bullish, has all the problems of gold's and then some. The pattern that produced the 24.955 target has a dubious impulse leg that failed to surpass any 'external' peaks. Also, there is an authoritative trendline just above last week's highs that is not likely to be a pushover. And finally, the futures spent the last two days of the week head-butting a secondary pivot at 24.20 that refused to give way. My gut feeling is that the target will be achieved anyway, but I'll wait for the futures to push above some daunting 'external' peaks recorded in July and August before we break out the bubbly. _______ UPDATE (Nov 24): Silver's chart handily outperformed gold's last week, shortening the odds of a further push to the 24.955 target given above. What happens after that will be crucial to the intermediate-term picture, since an 'external' peak at 25.425 recorded on August 30 will beckon a test of buyers' enthusiasm. ______ UPDATE (Nov 28, 4:30 p.m.): Helped by last week's wicked upthrust, the December contract today hit and then exceeded the 222222224.93 target shown. It is slightly lower than the one given here previously, but the pattern to which it is tied is sufficiently compelling for us to infer the small overshoot of the target on the close portends even higher prices this week. Look for a push above August 25.035 peak, but with some potential rally-stopping 'voodoo' resistance prices between here and 25.68.
The pocket of supply into which AAPL climbed last week could pose a challenge, since the stock's rise since October has not shown quite the power of Microsoft's. I offered a possible explanation for this in a previous tout: The coming recession will hit iPhone sales much harder than Microsoft's software services. In any event, you can use the 193.36 target of the pattern shown to project a minimum upside target for the coming week. Because everyone is bullish and expects this, watch for the move to occur in such a way that it is untradable -- on a Sunday night gap, perhaps.
December crude's month-long fall did sufficient damage to the longer-term charts to require a rally above $83 to undo it. However, we'll focus on the short-term picture to determine whether the bounce last Thursday from 72.16 is likely to show staying power. Steep as it was, it still fell a tad shy of the 76.62 target of the modest reverse pattern shown. Achieving it would still leave the futures two cents shy of generating an impulse leg with a leap above the external peak at 78.63 made last week on the way down. We'll delay judgment until we've seen how buyers handle both resistances.
Lacy Hunt, a gray eminence of the financial world and no doomsayer, was out with a Hoisington Report recently that should scare the pants off anyone concerned about the direction of the U.S. economy. His meticulously detailed take on a commercial real estate debacle that has been metastasizing for more than a year should dispel any notion that Americans will be spared from deepest recession. And yet, judging from the stock market's nearly vertical rise since early October, one might infer that things are going gangbusters. Microsoft shares alone added about $587 billion to the so-called wealth effect. To put that in perspective, it would buy a Mercedes-Benz GLC for every man, woman and child in L.A., Chicago, Houston and Phoenix. If you were to spread the lucre more charitably, it would house every homeless person in America -- luxuriously and for a long time. With an estimated 582,000 street people on the receiving end, each would have a tad more than a million dollars to spend. And it's not as though MSFT is the only high-flier caught up in the market's ballistic rise. The shares of Amazon, Google, Meta, Apple and some others in the trillionaire club rose almost as steeply, adding enough play-dough to the wealth effect to make ALL of us rich -- or at least rich enough in theory that no self-respecting American should ever again have to fly on Spirit Air. Stuffed Camel Entrée So where are the customers' yachts? Unfortunately, precious little of the wealth-effect 'money' will ever trickle down to Levittown, much less to the nation's ramshackle tent cities. Even the rich will hoard most of it once they've covered their essentials -- i.e., chartering floating mansions for summer cruises on the Mediterranean, and throwing garden parties with stuffed camel as the main
Another vertical short-squeeze with nary a bullish buyer in sight! This is Yankee know-how in its terminal stage. Friday's wilding spree pushed the futures forcibly through the 4398 midpoint resistance shown in the chart, shortening the odds of a further move to D=4673.50. The point 'B' high of the bullish pattern is pretty sausage-y, and so we shouldn't expect the presumptive stopping power of the Hidden Pivot target to work precisely. However, the easy move past p should be viewed as a reliable sign the target will be reached. A pullback to the green line (x=4260) can be used to get long 'mechanically', although the initial risk of $5,600 on four contracts will require the use of a 'camouflage' trigger capable of cutting that by perhaps 90%.
AAPL was rising steeply as the week ended, but I've gone out on a limb with a chart that dwells on bearish possibilities just ahead. Unlike MSFT, whose vertical rally left it at new record-highs, AAPL would need to push past two daunting 'external' peaks to get there. AAPL's closing high also equaled a voodoo number that would make a logical spot for a correction to start. It would trigger a short at 182.23, assuming the stock does not take out last week's 186.40 high first. Thereupon, p=178.07 would be our minimum downside objective, where half of any shorts, including with options, would be covered. _______ UPDATE (Nov 14, 7:57 p.m.): A new high at 188.11 has raised the trigger on the short to 183.94, with half to be covered at p=179.78.
