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This ETF proxy for the Long Bond has generated its first impulse leg since August with a pop above two prior peaks on the weekly chart. The move is not nearly as strong, and it is no reason to break out the bubbly, but it implies the rally cycle begun from 83.30 in May will achieve a minimum 92.91.  That is an important midpoint Hidden Pivot resistance associated with a big-picture rally target at 102.52. The target comes from a pattern on the weekly chart begun from 82.42 in October 2023. As always, a decisive penetration of 'p' on first contact would shorten the odds of a continuation to as high as 'D' , but to least p2 (97.82 in this case).

'' I'm in San Francisco, taking a break from Florida's unbearable heat, but also from my weekly commentaries. Writing regularly about the impending collapse of the stock market, Trump hubris and the fatally diseased, fake economy had become drudgery, and so, at least for the time being, I am focusing on more upbeat fare. Recently, I featured paintings by my college roommate, Geoff Leckie. Now I offer the works of another friend, Deborah Oropallo. In the forty or so years I've known her, she has broken new artistic ground with each new evolution of her style and subject matter;  then, she moved on when multitudes of imitators glutted the market. Deborah has achieved fame and commercial success, including shows at the Whitney Musuem and the Smithsonian. The work above, titled Oil and Water, was completed in 2016. It is a photomontage and acrylic on wood panel, 26 inches square.  For more information about the artist, click here.

Switching from the November contract to the December yields a somewhat higher target at 3751.20. Like the earlier target at 3719.70, this one looks likely to be reached. However, the odds of an overshoot have improved by a tad. That's because the futures spent a whole week consolidating just beneath the 'D' target, which would be a lot of work just to produce a marginal pop to a new high a mere $36 above the previous one. Regardless, we'll be ready to get short there cautiously, since the pattern is compelling, even if too obvious to predict a top precisely. UPDATE  (Sep 18, 12:08 a.m. EDT): Fed “news” caused the futures to head-fake to 3744.00, slightly above yesterday’s all-time high. Having frightened themselves with this breakout, traders then retreated $64 to leave our short offer unfilled. The target remains valid, although it is no longer a good bet for us.

I'm in San Francisco, taking a break from Florida's insufferable summer heat, but also from my weekly commentaries. Writing regularly about the impending collapse of the stock market, Wall Street hubris and the fatally diseased economy had grown boring and depressing, and so, at least for the time being, I will be substituting more entertaining fare. Recently, I've featured paintings by my college roommate, Geoffrey Leckie. This week, I offer the works of another friend, Deborah Oropallo. In the forty or so years I've known Deborah, she has broken new artistic ground with each new evolution of her style and subject; then, she moved on when imitators glutted the market she'd created. Deborah has achieved commercial success and fame, including a show at the Whitney Museum. However, my favorite exhibit of her works was mounted by the DeYoung Museum in San Francisco. It was called 'Guise,' and the sly overlay above is an arresting example of the theme. If you want to know more about the artist, click here.

GDXJ has shredded its way past all lesser targets, leaving just one more, major, Hidden Pivot resistance at 93.89 that comes from the weekly chart and beckons a test. Judging from the ease with which buyers penetrated the midpoint resistance at 78.90, the target is all but certain to be reached. It is nearly as likely to produce a precise reaction, meaning you should consider covered writes if you hold a long-term position.  I advised doing so at a lesser target not far below, but there was relatively little resistance. This time it is likely to be different, but if GDXJ melts through the resistance anyway, I'll need to rummage through my bag of technical tricks to come up with a new target, since the one at 93.89 is the highest I can produce with conventional tools. In most cases, this entails extrapolating an 'extension' target from the intraday charts. This tactic will yield Hidden Pivots that should be expected to show shortable stopping power, but it is not a reliable means for predicting a major top.

Bloomberg and other news sources that despise Trump and wish him ill have been asking with increasing fervor whether a recession is taking hold in the U.S.  Of course it is, as any middle-class American could have told you. But in this chart, we have a corroborating detail: long-term rates are headed lower, presumably because of a weakening economy. The two stalls since early July at the red line had seemed to imply that T-Bond futures were trapped in a bearish pattern that might at best produce sideways movement for the foreseeable future. However, this week's powerful blast through the red line, a midpoint Hidden Pivot resistance at 87.88 suggests that T-bond prices will continue to rise at least until D=92.45 is reached. A corresponding drop in long-term rates would yield 4.49%, down significantly from the current 4.68%.  This is a high-confidence call, although there is a possibility the decline in rates will stall or reverse at 4.66%, just a hair below.

Microsoft could go either way, but we should be able to gauge its mood by paying close attention to the two levels shown in the chart. If the stock moves higher, it would trigger a minor buy signal at 506.6, which could be a good opportunity for a ride to 519.75, or even to 547.12 if the trend catches fire. Alternatively, a decisive breach of the midpoint Hidden Pivot support at 493.67 would signal an imminent fall to at least 462.78, or possibly even 431.89 if any lower.  ______ UPDATE (Sep 12, 2:20 p.m. EDT): The stock finally got off the fence today with a cattle-prod assist from its clever handlers.  It popped above 506.06, tripping a buy signal to at least 519.75, but possibly as high as 547.12. This is equivalent to Punxsutawney Phil failing to see his shadow, since it will extend Springtime on Wall Street (cue up the Mel Brooks number) for yet another few weeks, or perhaps months. Please note, however, that the rally would fall a tad shy of the old high.  For those of you who are keeping track, DaBoyz effortlessly added about $88.6 billion of fraudulent 'wealth effect' to the global ledger with this morning's gap-up, short-squeeze opening.

There was plenty of lunatic energy at day's end, implying p2=6556 will be easily achieved (see inset chart). I stop short of rating D=6620.25 a done deal, however, and an even more important Hidden Pivot target at 6749.00 is still no better than a 50% bet to be achieved. It's not that I'm turning more bearish, just extremely cautious. The only thing the stock market has going for it is that the economy is weakening, providing an excuse for the Fed to ease. This is a pathetic way to run an economy, but it could conceivably drag out the bull market for long enough to enable stocks to benefit from something even more pathetic -- i.e., Santa Claus. Wall Street surely believes in him, even if kids no longer do. ______ UPDATE (Sep 12, 4:45 p.m. EDT): Check the Trading Room for my post on Wednesday concerning immediate prospects for the December contract. 

I've set a bullish tripwire at 510.50, somewhat above current levels, to tell us whether MSFT is about to embark on a major leg up. If so, the stock market would likely follow, since Microsoft remains a key bellwether. This does not negate a 493.67 correction target where I'd intended to bottom-fish aggressively. But I'm not married to either scenario and would prefer to simply let the stock tell us how it's feeling rather than pretend we have a crystal ball. If MSFT climbs toward new highs, don't expect the ascent to be smooth. That's because the slimeballs who manipulate the stock trapped too many bulls (and short-covering bears) with July 31's lunatic leap to 555.