A short from the red line (p=25.45) could have been worth as much as $14,000 by week's end on four contracts, although no one mentioned having done the trade, so I didn't track it. Now, draw a reverse pattern on the weekly chart using A=24.83 on 6/9, and you'll see why p=24.228 can be used as a minimum downside projection for the near term (and 22.98 as a worst case). It can also be used to bottom-fish with a 'reverse-pattern' trigger. If silver surprises and closes above last week's 24.47 high, that would put the 28.56 target in play. _____ UPDATE (Jul 27, 7:20 p.m.): Silver did in fact plunge today to within an inch of the 24.22 midpoint Hidden Pivot where I'd suggested bottom-fishing (see above), but I won't provide tracking guidance unless I hear from at least two subscribers who traded on my guidance.
The rally begun a month ago finally achieved the red line (p=38.90), which was about as far as I thought it might go after signaling a 'mechanical' buy at x=35.38. My hunch is that GDXJ will pussyfoot between the red and green lines for longer than we have patience. We'll give it the benefit of the doubt nonetheless, using p2=42.23 as a minimum upside target. Prompt me in the chat room and I may be able to provide timely trading guidance.
I've treated this T-Bond proxy's interminable dirge this year as a consolidation, but the chart shows the flip side of this assumption, with a minimum downside target at p=95.26. That's appropriate, given the heaviness of this vehicle since April. The pivot is clear and compelling, so a decisive breach would be warning of much lower lows down the road. Regardless, we should plan on bottom-fishing aggressively if p is achieved. _______ UPDATE (Aug 3, 10:40 a.m.): TLT's latest plunge has exceeded p=95.26 by 0.51 points so far, which is bearish, but we can still try bottom-fishing if we keep our expectations low. That would imply initiating a long position on any rally of 1.03 points from the current low, 94.75, but seeking only a one-level gain. Entry based on the 94.75 low would be at 95.78, but you should lower that number if the 94.75 low is exceeded to the downside. Plan on exiting your position exactly 1.03 points above the entry price. You can substitute options, buying them when the stock triggers an entry, but let me know in the chat room of your plans, since beating time decay will be extremely tricky here. _____ UPDATE (Aug 3, 9:42): The biggest rally of the day fell 32 cents shy of the $1.03 reversal needed to trigger the bull trade detailed above. With TLT freefalling, we can still use the same criterion for getting long against the trend: a $1.03 rally. That is what it will take to signal a possible reversal, and even then, there will be no guarantees how high.
Crude's tiresome game of tiddlywinks tripped a 'mechanical' short two weeks ago when the September contract rallied to the green line (x=76.86). A portion of any multi-contract position would have been covered ahead of last week's rally, although there was no indication of any interest in the trade in the chat room. Trade possibilities aside, the implicit assumption of my analysis is that this is yet another rally that lacks the gumption to push above the bearish pattern's 'C' high at 83.59.
The Dollar Index has bounced nearly precisely from p=99.72, just as we'd been expecting since March. I wouldn't get too excited, however, since nothing has changed in the big picture to reverse the greenback's long slide. The outlook would brighten somewhat if DXY vaults a minor midpoint resistance at 101.20 where it stalled last week. That's the midpoint Hidden Pivot, on the 60-minute chart, of A=100.02 on 7/20. The rally target thereafter would be 101.67.
Last week's commentary predicted that rates on the Ten-Year Note, currently around 3.8%, will hit a minimum 5.5% before inflation lurches into reverse and the U.S. begins a hellish descent into a full-blown debt deflation. The following, insightful response came from our friend Richard Charles at Alpine Capital: Well done, Rick, for highlighting the crux of markets today. On May 19, the Ten-Year Note broke a triple top to new highs and we were off to the races with our mutual 5.5 % target, which broke several boutique banks parking capital in Treasuries. Long-term T-Bonds now target an even more ferocious 6.75%. Having conjured some $14 Trillion in M1 deposits since 2020 to fight debt default deflation of $294 Trillion in unfunded US debts and liabilities, it's no surprise there are bond vigilantes who don’t quit but get less vocal. Not everyone kens the contracting market signal of M2 savings losing over a trillion in the past year to monetary heaven (or is it hell?) Any wonder, then, that BRICS sell US Treasuries and plan gold-backed currencies while Western banks salivate for central bank digital control fiat with endless war profits on passive populations? Trafficking Are the millions of military age men and trafficked children finally on the border political-radar with [the smash-hit movie] Sound of Freedom? Are political candidates really ready to bomb the cartels? Martin Armstrong blames neocons running Uncle Joe and thinks markets may not resolve until 2032 after war demands drive Jim Grant’s predicted decades-long bear market in bonds. We are not so sure. In any event, energy, food and precious metals remain undervalued assets, while commercial/residential real estate and their mortgages (a.k.a. death pledges) decline and default with little media awareness yet. The Old Testament tells us to retire debts every sabbatical. By that calendar
The futures were falling toward the 4541.50 target of a slovenly pattern when the week ended. However, bulls ought not be too concerned, since a descent all the way down to x=4439.00 would only make the September contract a more enticing buy. Even the red line (p=4508.00) will be in play as a spot to bottom-fish 'mechanically,' although we'll want to set it up on the 15-minute chart or less. In any event, the 4645.75 rally target will remain in play. ______ UPDATE (Jul 28, 7:53 a.m. EDT): The futures were 'supposed to' hit 4645.75, but instead dove from a 4634.50 high yesterday that missed the target by two-tenths of a percent (0.2%). They are climbing ahead of this morning's opening on short covering by the usual bozos, but the rally is suspect, especially since AAPL was plumped up yesterday by the same fraudsters. Let's be on our guard if ES and AAPL pop above Thursday's highs. This seems unlikely, but don't be afraid to take home some puts if it happens.
We'll give this correction plenty of room, since the steepness of Apple's melt-up since March has been the equivalent of running three sub-two-hour marathons. The stock is badly in need of rest, so let's be prepared to exploit it. A moderate decline of arobull trapund $8 would create the first bearish impulse leg we've seen on the daily chart since last December. The low of that move gave way to the current, massive rally, and we might expect the same outcome when this pullback ends, since bulls demolished a key resistance at 189.07 before it began. _______ UPDATE (Jul 17, 11:53 p.m.): AAPL went sharply the 'wrong' way, propelled by yet another deftly engineered gap-up leap on the opening. Assuming the stock can get past a midpoint resistance at 194.24, it is headed for a potentially shortable peak at exactly 196.07 (5-min, A=189.85 on 7/14). If this happens before noon Wednesday, you can speculate with puts under 0.65 that expire this Friday. _______ UPDATE (Jul 18, 5:54 p.m.): Using the same pattern, you can also get long 'mechanically' by buying cheap call options (0.60 or less in this context) expiring this Friday or next if AAPL pulls back to the green line (x=193.32). _______ UPDATE (Jul 19, 11:32 p.m.): Subscribers jumped on the mechanical trade suggested above just before AAPL took a psychotic leap from the green line (x=193.32). This caused soon-to-expire 195 calls that I'd suggested buying for 0.40 to leap to an intraday high of 3.85, a nearly 1000% gain, in just 12 minutes. One subscriber who bought 50 of the calls for 0.51 reported selling them minutes later for 3.40, realizing a nearly instantaneous profit of $14,450. I didn't notice this until later, but the high of AAPL's nutty, pointless spike could have been predicted within four cents using
Friday's saggy performance promised to burden the night shift when trading resumes Sunday night. If selling should snowball early in the week, sending the futures plummeting 100 points to the green line (x=4437), treat it is an excellent opportunity to bottom-fish with a 'mechanical' bid. Entry risk on four contracts would be nearly $14,000, so the trade should be attempted only with a 'reverse-pattern' trigger that cuts the theoretical risk down to $800 or less. It may be possible to narrow down the details, so stay tuned to the chat room for timely guidance. _______ UPDATE (Jul 18, 12:03 a.m.): No respite for bears! Use this bullish pattern, with a 4643.75 target, to get a precise handle on this vehicle, get long 'mechanically or short at D. _______ UPDATE (Jul 19, 11:42 p.m.): Use a 'reverse pattern' trigger and a 1.50-point interval to bottom-fish the 4579 midpoint Hidden Pivot shown here. The trade is recommended for Wednesday-tutorial regulars. ______ UPDATE (Jul 21, 12:10 a.m.): The trade was worth as much as $2700 to anyone who followed my instructions. The futures subsequently relapsed, but we had already neutralized their ability to give us anxiety, never mind pain.
What the heck was that all about? I doubt that our 98.44 downside target was front-run, but an otherwise moribund TLT did in fact trampoline from a 98.85 low that missed the forecast by more than a mere whisker. Now, if the manic bounce reaches the green line (x=102.57), that would test our appetite for 'mechanical' signals, since this one would imply a shorting opportunity with high odds of success. We'll consider buying close-in put options if and when that happens, but for now stay chill. _______ UPDATE (Jul 19, 11:45 p.m.): I have no appetite for intercepting this freakish rally in T-Bonds, but I'll be curious to see whether the bearish pattern's point 'C' high at 103.95 holds. The mechanical short is not exactly 'textbook', since the grinding B-C leg sapped the energy from bears after they created a strong impulse leg in the last two weeks of May.
