T-Bonds and stocks came down so hard today that I now give my ‘outrageously bullish scenario’ (see above) no better than a 50% chance of surviving. Putting aside gold’s globally unnerving price surge, June T-Bond futures bulldozed a path down to as low as 100^12. If that were to happen, the implied rise in interest rates would be sufficient to tip the U.S. and global economies into deepest recession. A reported $7.5 trillion in Treasury debt needs to be refinanced over the next three years, with much of it due in 2025. It is therefore a particularly bad time for the Masters of the Universe to lose control of long-term rates. Beleaguered consumers will struggle even harder, and an already tottering commercial real estate market will finally give up the ghost. Residential real estate is about to deflate as well, putting a potentially economically rejuvenating refinancing cycle so far out of reach that Baby Boomers might not see another in their lifetime. Trump will get the blame, and deservedly so. Usually, economic cycles of boom and bust are much bigger than the presidency, but in this case, if stocks continue to fall, Trump will surely have been the catalyst. _______ UPDATE (April 25): Last week's rally left the futures a hair shy of an important Hidden Pivot midpoint resistance at 116^14. A decisive move through it would not announce that the bear market is over, but it would quietly suggest an important turn may be nigh. It would also imply the futures are on their way to 121^11, a Hidden Pivot that would leave the June contract just short of a breakout. The pattern will not be comfy-cozy for seasoned Pivoters, but I am using it nonetheless, in part because of its obscurity. (Always keep in mind our rule concerning
There are idiosyncratic reasons for selecting the reverse pattern shown, but its main purpose is to bring visual clarity to the 'mechanical' buy signal that would trigger if MSFT touches the green line (x=362.44), which it almost certainly will. I was unable to drag the 'a' low into the picture, but if you want to replicate the chart, it lies at 385.58 (8/5/24). There's plenty of potential here, although I would find a way around the textbook stop-loss at 344.78. A 'camo' trigger fashioned from the 5-minute chart would allow you to test the water without risking more than relative pocket change.
[Two weeks ago, I made the seemingly outrageous prediction that Trump's tariff offensive would not cause a recession and that the stock market bear would soon be over. Shares were in a steep plunge at the time, and investors around the world seemed ready to hit the panic button that Sunday night. The S&Ps had last traded around 5300, but my technical runes said they would fall no lower than 4820, even with traders in the grip of fear. Lo, the SPX fell no lower than 4835 on Monday, then bounced a whopping 646 points. Although they've since given back some of the gains, they are still 447 points above the low and showing little inclination to test it. That could change, of course, and stocks could relapse with a vengeance. If so, it would likely put the U.S. and global economies on a path toward deep recession, or even a Second Great Depression. That is what I might have expected if the 4820 target hadn't looked so promising as a support. We shall see. In the meantime, I'll continue to run my original commentary (see below) until the stock market proves me wrong. It is either going to new highs by summer, or about to resume a historic crash. RA ] *** A word of advice if you’re looking for bankable information on the direction of the economy: tune out the mainstream media’s cavalcade of Trump-deranged bozos and focus on the 4820 target in the SPX chart above. Think of it as Trump’s lucky number, but also a very good place for these all-too-interesting times to find temporary equilibrium. That is my worst-case target for a bear market that many believe is only just getting started. As a die-hard permabear myself, I’ve been eagerly anticipating the Mother of All
The Dollar Index has broken down with last week's penetration of a key low at 99.58 that was recorded in July 2023. Expect more weakness down to the green line (x=96.03), at least, before the greenback can turn around. A dip to the line would trigger a 'mechanical' buy predicated on a climactic run-up to the 119.37 target. That seems farfetched at the moment, but there is nothing in the chart to suggest the long-term uptrend is over. At the green line, the correction will amount to about 16% from the September 2022 high at 114.78. _______ UPDATE (Apr 21, 4:15 p.m. EDT): Today's penetration of a 98.04 midpoint Hidden Pivot support was not decisive, but any more weakness will clear a path down to D=95.79 of this pattern. As things stand, a rally to the green line (x=99.16) already would trigger an enticing 'mechanical' short that would take a stop-loss at 100.29.
Despite the hellacious dive over the last ten days, TLT is on a double buy signal. The more important of the two is shown in the weekly chart (inset). An 88.47 bid would require a stop-loss at 84.88, just beneath the pattern's point 'c' low. You can see how close the low came to stopping out the position, but it held nonetheless -- by 12 cents. T-Bonds were bound to turn around sooner or later, and the chart says this would be a logical place for it to happen. Odds that a major low is in place would shorten if this so-far modest bounce can push past D=88.39 of this minor pattern. _______ UPDATE (Apr 17): The tout above sniffed out a strong bounce, but not quite strong enough to lift TLT from the danger zone. That would require a thrust exceeding the 88.91 'external' peak shown in this chart. My hunch is that bulls lack the gusto for this task, but we'll give them the benefit of the doubt when trading gets under way after a long Easter holiday weekend. _______ UPDATE (Apr 21, 4:25 p.m.): Today's carnage clarified a picture that shows an easy path down to 74.38. If this comes to pass, T-Bond futures could fall to as low as 100^12 by mid-summer.
Ten-Year rates have taken a Whoopee Cushion bounce en route to a presumptive bottom at 3.67%. It reportedly was caused by the wholesale dumping of T-Bonds by European banksters intent on disrupting U.S. financial markets. Powell's tightening regimen is making it difficult for them to open up the credit spigot, and so they have desperately tried to force his hand. The survival of some large American hedge funds could be at stake, since they were leveraged up to the eyeballs with a spread that required a bullish position in bonds. With Powell standing his ground, my gut feeling is that the panic will subside shortly and that rates will not break out above January's 4.81% high. _______ UPDATE (Apr 21, 6:51 p.m. EDT): Rates on the Ten-Year Note look primed to burst through the 4.42% midpoint Hidden Pivot resistance shown in this chart. If they do, they should be presumed bound for at least 4.58% or even higher, to levels that could knock the U.S. economy and stock market for a loop.
Quotes for crude have turned up from an odd place, well shy of a 'secondary' Hidden Pivot support at 49.25. Odds of a relapse will depend on how bulls fare pushing past a minor Hidden Pivot resistance at 62.22, and another at 65.68 (60-min, A=56.42 on 4/9). If both of these numbers are exceeded, especially decisively, then last week's low at 55.12 may prove to have been an important one. For now, set screen alerts at 62.22 and 65.68 to determine whether the bounce is likely to get legs.
[Just ahead of last Monday’s steep plunge, I predicted here that an S&P reversal from 4820 would mark the end of the bear market. So far, SPX has rallied 646 points off an actual low at 4835. Bulls are not yet out of the woods, however, since a relapse could occur at any time. The stock market remains spooked by Europe’s dumping of Treasury paper in a deliberate attempt to destabilize the U.S. financial system. With the EU economy swirling down the crapper, the globalists are desperate to force Powell to ease in order to rescue big hedge funds that were leveraged up to their eyeballs with Treasury paper. So far, the Fed chairman has stood his ground, and it appears the EU attempt to sabotage the U.S. bond market will fail. In any event, the commentary below will continue to run until such time as the S&Ps crash the 4820 Hidden Pivot and prove me wrong. If you keep my thesis in mind — that as long as 4820 holds, there will be no recession, nor any harmful effects from tariffs — you will be better able to judge the jaw-dropping stupidity of the mainstream media’s coverage of Trump 2.0. Because of their blind hatred of the president, the eggheads, reporters, pundits and benighted editorialists will continue to get everything wrong until stocks are once again soaring to new all-time highs. RA] *** A word of advice if you’re looking for bankable information on the direction of the economy: tune out the mainstream media’s cavalcade of Trump-deranged bozos and focus on the 4820 target in the SPX chart above. Think of it as Trump’s lucky number, but also a very good place for these all-too-interesting times to find temporary equilibrium. That is my worst-case target for a bear market that many believe is
[Just ahead of last Monday's steep plunge, I predicted here that an S&P reversal from 4820 would mark the end of the bear market. So far, SPX has rallied 646 points off an actual low at 4835. Bulls are not yet out of the woods, however, since a relapse could occur at any time. The stock market remains spooked by Europe's dumping of Treasury paper in a deliberate attempt to destabilize the U.S. financial system. With the EU economy swirling down the crapper, the globalists are desperate to force Powell to ease in order to rescue big hedge funds that were leveraged up to their eyeballs with Treasury paper. So far, the Fed chairman has stood his ground, and it appears the EU attempt to sabotage the U.S. bond market will fail. In any event, the commentary below will continue to run until the S&Ps crash the 4820 Hidden Pivot and prove me wrong. If you keep my thesis in mind -- that as long as 4820 holds, there will be no recession, nor any harmful effects from Trump's tariffs -- you will be better able to judge the jaw-dropping stupidity of the mainstream media's coverage of Trump 2.0. Because of their blind hatred of the president, the eggheads and benighted editorialists will continue to get everything wrong until stocks are once again soaring to new all-time highs. RA] *** A word of advice if you’re looking for bankable information on the direction of the economy: tune out the mainstream media’s cavalcade of Trump-deranged bozos and focus on the 4820 target in the SPX chart above. Think of it as Trump’s lucky number, but also a very good place for these all-too-interesting times to find temporary equilibrium. That is my worst-case target for a bear market that many believe is
[Just ahead of last Monday’s plunge, Rick’s Picks predicted that an S&P reversal at 4820 would mark the end of the bear market. Here’s a chart that shows the 661-point rally that occurred off an actual low at 4835. Bulls are not yet out of the woods, however, since a relapse could occur at any time. The stock market remains spooked by Europe’s dumping of Treasury paper in a deliberate attempt to destabilize the U.S. financial system. With the EU economy swirling down the crapper, the globalists are desperate to force Powell to ease, ostensibly to rescue big hedge funds that were leveraged up to their eyeballs with Treasury paper. So far, the Fed chairman has stood his ground, and it appears the EU attempt to sabotage the U.S. bond market will fail. In any event, the commentary below will continue to run until the S&Ps crash the 4820 Hidden Pivot and prove me wrong. If you keep my thesis in mind — that as long as 4820 holds, there will be no recession, nor any harmful effects from Trump’s tariffs — you will be better able to judge the head-slapping ignorance of the mainstream media’s coverage of Trump 2.0. Because of their blind hatred of the president, these clowns will continue to get everything wrong until stocks are once again soaring to new all-time highs. RA] *** A word of advice if you’re looking for bankable information on the direction of the economy: tune out the mainstream media’s cavalcade of Trump-deranged bozos and focus on the 4820 target in the SPX chart above. Think of it as Trump’s lucky number, but also a very good place for these all-too-interesting times to find temporary equilibrium. That is my worst-case target for a bear market that many believe is only just getting started. As a die-hard permabear
