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No one mentioned the glow-in-the-dark rickism that had our next rally target at 31.730, below the previous one. Is anyone paying attention?  Apparently not, but I'll leave Silver on the list anyway, since, without it, I could no longer promote an affinity between Rick's Picks and bullion traders. The December contract looks bound for the 33.435 target shown, but let's wait till buyers punctures p2=31.798 before we jump to conclusions. Pivoteers, please note: There are some voodoo numbers along the way to get short, if only briefly.

TLT got hit hard last week, all right, but not in the way I'd predicted. The selling followed a feint to 101.39, a few ticks above a peak recorded back in January.  Actually, the feint that ended the rally was the second, following another that had occurred a week earlier. Very tricky, indeed. However, the bottom line is that buyers have generated a powerful impulse leg on the daily chart. This means that however hard T-Bonds get wacked in the days and weeks ahead, the weakness should be viewed as corrective. My rally target remains 105.49, as previously given here, and a pullback to 91.88 should be bought aggressively, stop 87.33. A red-line 'mechanical' buying opportunity could also materialize at p=96.42; it would require a stop-loss at 93.39.

The stock market went bonkers following the Fed's first rate-cut since March 2020, but it's more than a little tempting to sell the news. A return to easing had been rumored for the last couple of years, but with a pitchfork mob threatening to descend on the Eccles Building, Fed Chairman Powell finally gave in to Wall Street. The mainstream media has given him cover with the lame story that lower rates will help spur employment. Historians are more likely to recall that the central bank's pivot toward lower rates came at a time when stocks were breaking out to new all-time highs, inflation was ravaging the middle class, and home prices were at record levels. Still, it's an election year, and what did we expect?  The Open Market Committee is simply revivifying the American Dream -- not with a scrawny chicken in every pot, but with renewed hopes of a leased Lexus in every garage. What will lower rates mean? For one, they could conceivably delay a crash in home prices and stocks for a while. It has been coming ever since the 2007-08 deflation failed to finish the job. At the time, one might have surmised that the nation's most popular and pernicious delusion -- growing rich simply by owning a home -- had suffered a fatal blow. Alas, whatever lessons the Great Financial Crash held for us were erased by a turbocharged recovery that has pushed home prices higher than ever. And stocks, too. Although Powell's steadfast hawkishness may have disappointed investors every month for the last three years, it did not impede the stock market's steep rise even slightly. Nor did it quell Congressional spending, which is currently adding $1 trillion of debt to the U.S. balance sheet every 100 days.  Historians will recall that statistic,

To the list of trading 'touts', I have added yields on the Ten-Year Treasury Note. There seems to be a great deal of uncertainty about where rates for U.S. debt are headed, but this chart should help bring clarity and concision to the forecast. Ten-year rates have fallen from a post-covid high of 4.97% a year ago to a current 3.65%. This is a hair above a crucial midpoint Hidden Pivot support at 3.57% shown in the chart. The 'reverse' pattern from which the support was derived is a compelling one that doesn't care whether the overall look of the chart is 'toppy' -- i.e., favoring a further fall in rates. We won't pretend to have a crystal ball, since the support has yet to be tested. But if it were to be decisively exceeded, that would shorten the odds of the 10-year rate falling to as low as 2.15% in 2025-26. It would be congruent with my very bullish outlook for TLT elsewhere on this page. _______UPDATE (Oct 6): Yields signaled a move to higher levels with their recent thrust through the green line (x=3.83%).  If they are headed significantly higher, we should see an effortless move past the midpoint resistance at 4.06%.  To be sure, there is an alternative 'a' low at 37.85 that would raise the midpoint resistance to 4.08%.  Let's watch both levels to determine how strong the rally is, and whether it is fated to die. 

I've been talking about the 449.42 rally target for more than a month, which is probably reason to think it won't work. Still, I cannot imagine the futures blowing past it on the first try. The reverse pattern from which the target is derived is too clear and compelling not to stymie the thundering herd, even if only for a day or two. A shallow pullback that lasts for perhaps 2-3 days and works bears into a state of nervous exhaustion would be warning them to dive for cover. Would they even want to know at that point that there would be another opportunity to lay 'em out at 465.90. That's the D target that maxes out reverse-pattern possibilities with the lowest 'a' that is not part of a conventional pattern.  (Note to Pivoteers: This is what I call a locked point 'a' high or low, a term worth remembering and asking about.)

I've put aside Hidden Pivots to consider the simple picture afforded by connecting up the last two important highs on GDXJ's daily chart.  They yield a rally projection to 51.19 as the week begins, but you should factor an additional 0.05 per day (or 0.25 per week) to account for the trendline's rising slope.  That would imply resistance at around 51.44 come Friday. Achieving this height should pose no problem, since gold itself is in a strong uptrend with a target about 7% above current levels. If a commensurate rally were to occur in this vehicle, it would imply upside to 52.40.  Can GDXJ catch up with physical? It is bound to happen eventually, presumably when speculative juices are flowing more copiously.

The seemingly unstoppable rally since Bertie bottomed at 52,619 on September 6 will test the idea that the best shorts occur in places that inspire the most fear in bears. Friday's wilding spree tripped a fearsome but technically appealing 'mechanical' short using the green line (x=59,858). That doesn't mean you're supposed to get short at that price, only that you have a proper signal for setting up a 'camouflage' trigger that minimizes the otherwise 5158-point entry risk of a position stopped above the pattern's point 'C' high. I suggest a trigger interval of 625 points, implying $2500 of entry risk on four lots. This trade is only for those who understand the mechanism and are comfortable with the risk.

My confidence in the pattern shown is high. It is that pretty, and the 'mechanical' short triggered on Friday when a two-day bounce touched the green line is therefore likely to fall to at least 99.90 before TLT could find traction. However, a decisive breach of the red line would imply more slippage over the near term to as low as 98.56. The bigger picture remains bullish and points to 105.49 over the near-to-intermediate term, with long-term potential to as high as 150.12 (!).  The much lower interest rates this implies should not be regarded as good news, since yields could fall to those levels only in the throes of a very deep recession or a depression.

The 65.95 downside target of the pattern shown is sufficiently clear and compelling that we might have expected it to contain the powerful bear cycle begun in early July from around $85. Instead, the futures breached the Hidden Pivot support by a not insignificant $1.34. This implies the nearly $5 bounce that has occurred so far is likely to sputter out without surpassing any significant prior peaks on the daily chart (the nearest of which lies at 76.40).  For now, I can offer a rally target at 69.76 as a minimum upside projection (30m, A= 64.99 on 9/11), or at 71.94 if any higher. These Hidden Pivot resistance points will obtain as long as 67.58, the pattern's point 'C' low, is not violated first.