June Gold finished the week with a lackluster performance that nonetheless left intact the bullish pattern shown, with a 5144.00 target. The closing price was about midway along the length of a large range that stretched from 4580 to 4825. That seems excessive and could have pleased no one, but it was not especially bearish even though the futures finished the session with a $114 loss. Looking just ahead, a pullback to the green line (X=4382.40) would trigger an appealing 'mechanical' buy, stop 4128.00.
Two strong rallies last week improved the look of the daily chart, with a 133.49 target that now looks all but certain to be achieved. Thursday's rigged plunge to an intraday low at 116.13 was quickly recouped, as we might have expected in a healthy bull market. It triggered a 'mechanical' buy at the red line, which confirms the bullish outlook for this ETF, a proxy for the shares of gold exploration companies. If GDXJ were to relapse to the green line (x=110.53), be ready with a bid there and a 102.87 stop-loss.
Did you fade the Dow’s 1100-point rally on Tuesday, or the nearly 500-point follow-through the next day like I told you to? I’d written here a few weeks ago that shorting into strength these days offers the best odds bears have gotten in decades. Stocks had spent four months building an obvious top, and finally, there it was, a precipitously weakening market staring us down just as the U.S. joined Israel in a war against Iran. Usually Wall Street loves nightly footage of an enemy's buildings getting blown to smithereens by F-35s. The fighter jets cost $100 million apiece, and maintenance and operational costs can add another $300 million to that. But this war has another cost, and it's not the 'good' kind: a huge leap in the price of crude oil and natural gas. Investors go to sleep every night praying something will happen soon to ease the situation. It has pushed gas prices as high as $6 a gallon in California and is threatening to send already steep increases in the price of everything else out of control. The graph says Wall Street ought not get its hopes too high for quick relief, since crude looks like it could rise to the sky before quotes settle back to a more normal $70 or so someday. But how will Wall Street react if prices reach the $125-a-barrel target in the graph, or maybe even higher? Actually, buyers have shown unmistakable signs of mental illness, but with a seemingly benign twist. Before Tuesday, the broad averages had lurched both ways on a hair trigger, moving inversely with every blip up or down in the price of crude. But on Tuesday they did something so bizarre that no one could have predicted it. With oil up a few dollars, stocks went
It took the futures several days to get off the launcher following the 'buy' signal noted here a week ago, but by Friday they were on their way to an all but certain rendezvous with the 104.94 target shown. Because investors are obsessed with oil's every move, we can infer that stocks will continue to fall as energy jitters ratchet higher. The target pattern is very well-formed for reasons I won't go into here, but that means D can be shorted with the tightest possible stop. Please note that a decisive move through this Hidden Pivot resistance would open a path to as high as 125.48 over the near term, or even to 178.89, a target broached here earlier.
Microsoft was diddling an important Hidden Pivot support at 355.42 on Friday when bulls were likely saved by the bell. That's because any slippage beneath this 'secondary' support would portend more punishment down to as low as 332.67, the maxed-out 'D' target of the conventional pattern shown. Both numbers have been theoretically in play since mid-February, when sellers first drove the stock down to the green line (x=400.93). Because we treat MSFT as our #1 bellwether for the aging bull market, the implications of the stock's easy breach of p=378.18, the midpoint Hidden Pivot, are fraught with significance. If the stock is going to reverse from here, it will signal it via a booster-stage rally of 7.84 points. However, if the bounce comes off a low beneath 352 (or so), we shouldn't trust it completely. _______ UPDATE (April 1, 10:23): Microsoft is being manipulated higher the old-fashioned way, with short-squeeze gaps on opening bars. That is why the stock came down so far in the first place, and it will surely do so again, falling to the 332.67 target mentioned above. First, though, it looks likely to achieve will achieve a minimum 387.92 with this short-squeeze rally. A pullback to 364.42 would trigger a 'mechanical' buy, stop 356.57. (Did you know that the 'Last Price' given above corresponds to the price at which the stock was trading when this update was published? That is true for all of my updates.)
Five days of tedium could not push April Gold impulsively past the small but significant (i.e., 'look-to-the-left') peak at 4616.30 shown in the chart. That could change for the better with just a small leap, but until it happens there is no reason to give bulls the benefit of the doubt. However, just a little weakness could bring a test of a midpoint Hidden Support at 4282.90 that is associated with a 'D' target at 3964.70 (60-min, A=4736.30 on March 20). The higher number is where a reversal should occur if bulls are ready to take charge again following a month-long slide from 5434, but either Hidden Pivot can be bottom-fished provided you understand how. A side note: Bullion has sagged since the start of the war with Iran, but why? Turkey's behavior may hold some answers. Although it has been one of the world's most aggressive sovereign buyers of gold over the past decade, it sold or swapped about 60 tons of gold worth $8 billion in two weeks after the start of the war. Reportedly, this was to support a disinflation strategy that relies on a stable lira. ______ UPDATE for JUNE Gold (March 31, 7:07p.m. ET): The futures have stalled precisely at a 4709,70 'd' target, but a breakout would clear a path to 4890.10, and thence to 5144.00. That last Hidden Pivot should offer precisely tradeable resistance, but its decisive penetration would announce that bulls are back in force.
Like Gold futures, this ETF proxy for junior miners spent the week in timid remission. Although it triggered a theoretical 'buy' signal on Monday, the follow-through failed to reach the midpoint Hidden Pivot resistance after four days of flailing. That could chain in a trice, however, presumably with a jump-start from May Silver, which looked ready to rumble when the week ended. As always, a strong push through p would clear a path to the 133.49 'd' target of the pattern shown.
The war with Iran has put investors in a deepening state of anxiety, since no one can say for sure how things will turn out. Wall Street’s obsessive focus has been on the price of oil, implicitly trusting that the supposed collective wisdom of markets is superior to whatever information we could glean from headlines and op-ed pages. The trouble is, the story that crude oil spins each day mutates with wild price swings that suggest the markets are an idiot, as clueless as we are. The charts I use to get a tight handle on the stock market are less confusing, however, and they are saying unequivocally that the bull market begun in 2009 is over. To state this in a disinterested, technical way, when ABCD corrections in bull markets start exceeding their ‘D’ targets, as occurred last week in the S&Ps, the major trend has changed. The small target-overshoot in the E-Mini S&P chart above tells us more about the stock market’s health, or lack thereof, than a cacophony of pundits and eggheads ever could. It says a bear market that has always been inevitable has finally begun. This will also mark the end of Trump’s heroic run, negating his magical ability to move the markets and to persuade people that everything will turn out okay if we just give it more time. Trump’s Miracles It is difficult to criticize a man who has produced so many political and geopolitical miracles. Admittedly, we have never believed in the economic kind, since Americans are much too deeply in debt to escape a Second Great Depression. When it comes, it will take down a global regime that has come to depend on America’ economic strength and, more recently, its leadership. The hope remains that Trump will put our domestic house
The chart shows the same hopeful, best-case scenario for Silver as the one presented in the Gold tout. The May contract tripped a theoretical buy signal on Friday when it touched the green line, and now it need only push above p=77.99 to tip the odds strongly back in bulls' favor. As is the case in gold, however, and as I have stated, this is not the most likely outcome, and the alternative would be further slippage to at least 56.32. That is the secondary Hidden Pivot of a pattern projecting as low as 42.67 (60m, A=119.20 on Feb 29). ______ UPDATE (Mar 23, 11:03 a.m.): Further slippage overnight to 61.210 has altered the picture. The rally since has tripped a theoretical buy signal at 67.434 that will likely achieve 73.658, s midpoint resistance that could stop bulls in their tracks. However, if they blow past it, you can use 86.105 as a rally target. Also, a pullback to 67.434 from anywhere in the range 76.20-77.60 would trigger a 'mechanical buy at 67.43, stop 61.205. _______ UPDATE March 24, 10:51 p.m.): A gusher of promising news from the President tonight has pushed the futures past a minor 'd' target at 73.535 (60m, a=79.20 on 3/3), putting a bigger pattern in play with a new rally target at 85.90. A pullback first to 67.383 would trigger a 'mechanical' buy at 67.383, stop 61.210. Please note that the trade would carry nearly $31,000 of entry risk per contract, so it is therefore recommended only to those of you who are familiar with 'camouflage' triggers capable of reducing the risk by as much as 95%. They are covered in detail in the Hidden Pivot course I've made available free to most subscribers.
The 6499.50 target I posted in the chat room Friday morning implied that a 100-point drop was coming. It did, almost. I also said the Hidden Pivot support would need to show some pluck to hold a full-blown bear market at bay, at least for a while. We didn't get the test we were looking for because the pattern proved too obvious and its target got front-run with ES 60 points above it; however, a test is coming nonetheless. Stay focused this week on my magic number, and don't accept anything less than a rally above C=6903.00 as minimal evidence the bull market is still breathing.
