I've used a continuous monthly chart to project a 6136.25 target for the E-Mini futures. A corresponding target in the cash S&P Index (SPX) lies at 6118.34. These Hidden Pivots look likely to be reached, although not necessarily precisely, since the patterns from which they are derived will be all-too-obvious to every trader and technician in the game. They are nonetheless sufficiently compelling to not work in some fashion, presumably tradeably. In each instance, buyers had little trouble pushing past the respective HP midpoints, and that's why I'm so confident the corresponding targets will be achieved. If the trend maintains its current slope, that should happen by no later than mid-October if not significantly earlier.
If you're wondering when the miners are going to take off, this week's chart offers a sodden dose of reality. Notice first that GDXJ is currently trading about where it was in 2013. Lows a few years later near $15 followed the cliff dive from 2011's exhilarating precipice at 180. Who could have imagined that, 10 years later, mining shares would still be scuddling lazily along, tormenting investors more or less in proportion to the limit of their patience? Yes, this ETF could take flight at any time, like a bat from hell. And it will -- just not on our time. If there is anything to console us in the meantime, it is the ease with which this vehicle's gratuitous swings can be traded. Now, for instance, you can stay short down to 38.32, or do covered writes until then, and then reverse your position when the target is reached. That would be 2.60 below the so-far retracement low off May's 47.25 peak. Don't sweat the details.
Hey, all you twenty-something, failure-adjusted, peach flavored hard seltzer-drinking, avocado toast-munching, downwardly mobile, squishy-gendered, Robin Hoodie, World-of-Warcraft miscreants: Listen up!! If you're as desperate as I think you are to fatten your crypto wallets, you'll need to pay up to find out exactly where bitcoin is headed next. Hint: The last three digits of my current price target are xx191. This will be a last-chance, bargain-basement retracement low before bitcoin blasts off for hyperspace. I've published the super-secret correction target in my chat room, and you need only click here for a free, two-week trial subscription that will give you instant access to the chat room and all the other nuggets of tradeable information that lie behind the Rick's Picks paywall. No credit card is necessary, since that would only add to the unpaid balance, metastasizing at 21.99%, that has been devouring you limb-by-limb like a flesh-eating bacterium. _______ UPDATE (June 29): I've lowered my precise correction target (hint: it is below 56,000), a modification that has changed its last three digits to xxx709. UPDATE (July 5): Whether you subscribed or not, I hope my warning prepared you for the disaster that has unfolded in bitcoin. It has actually exceeded the original downside target, and so I've posted an 'extension target' in the chat room. It is my worst case at the moment and is below 51,000. Click here to sign up for a free two-week trial, no credit card required.
The disconnect between tight Fed policy and a U.S. economy on the brink of recession is growing more unsettling every day. A key question is which economy we are talking about, since there are two distinctly different ones that Fed actions can affect. The first is the economy of consumer goods and services. It is about to keel over dead. This will be a very big deal, since consumption accounts for 70% of the nation’s GDP. Most of it comes from the broad middle class, which is staggering under the weight of higher costs for nearly everything. Some of those costs, particularly for car and home insurance, must be fully borne no matter how high they go. Other outlays are discretionary and include food, travel and entertainment. Those sectors of the economy are close to being asphyxiated by high prices and high interest rates, even as delinquent payments for cars, homes, credit card balances and rent climb into the red zone. The other economy comprises financial assets, and it is flourishing as never before, dancing in the ether. Soaring stock prices and home valuations have made many Americans think and act like they are rich, and they are continuing to spend freely. An estimated 10% of America’s 131 million households have net worth of $2 million or more. That is an impressive number, but it is not nearly big enough to prop up an economy whose health is determined by the other 90%. These days, the 90% are barely keeping McDonald’s afloat, even if East Side foodies are paying reservation specialists $500 or more to snag a decent table on a Saturday night. A 1930s Spiral The two economies have put the Fed in an inescapable bind. If the central bank loosens, the additional inflation this is likely to cause
Bearishness on the U.S. dollar reached a shrill crescendo last week after the Saudis began accepting other currencies for oil. Some seem to think this will move the world away from the dollar as the global reserve standard, but I strongly disagree. The dollar's indispensability for propagating a $2 quadrillion derivatives shell game is far more crucial to its supreme status in the world's heavily financialized economy. Crude oil is certainly a large market, but it is puny in comparison to the nominal value of derivatives traded digitally around the world. The chart shows the dollar ensconced in the upper range of a wedge formation, An upside breakout without a cyclical correction down to the lower line would be very bullish, however illogical it might seem to dollar bears (aka 'inflationists'). When the breakout occurs, it will leave the punditry, eggheads and bloviators who would consign the dollar to ignominy with some serious explaining to do. Suck it up, dudes!
The September contract looks all but certain to reach the midpoint Hidden Pivot at 5587.75 shown in the chart (inset). The rally has been powered by relentless short-covering and gap-up squeezes on the opening bell, but I doubt it will punch through p effortlessly. There is always that chance, however, and if it does, then we should assume that D=6155.25 is in play. The target may look like it is miles above, but it is only a 12% move from Friday's close. The distance could be traversed in as little as 8-10 weeks, which, looking back to the summer of 1929, would warrant our being on high alert. Wall Street should be pretty stoked by then about Trump's impending return to the presidency, so it would be the perfect time for Mr. Market to pull the plug.
The chart shows how July Silver replicated gold's reverse-pattern low last week. Although the actual bottom slightly exceeded the d=28.815 target, the subsequent bounce on Friday was strong enough to take the futures out of the danger zone. The move would become even more persuasive if the bounce can surpass 29.803, or better yet close above it. That is the midpoint resistance of a reverse pattern that began with a 29.525 low on June 5. The corresponding 'd' target of the pattern is 30.875, and we should expect it to be reached, at least, if p=29.803 is decisively penetrated.
Bolstered by inflation news that sent stocks into a tizzy, TLT made dramatic progress last week toward the 95.40 target shown. The durability of this Hidden Pivot target will test bulls' mettle, as will an 'external' peak at 95.02 recorded back in late March. Together, they will offer formidabe resistance to the uptrend, and their breach would signal a continuation of the rally. The next significant structural resistance above 95.02 lies at 96.40, and thence 98.67. There are voodoo number between each of these peaks where TLT can be shorted (or T-bond equivalents bought), so stay tuned to the chat room if you're looking for real-time guidance.
The wild, gratuitous price swings in the world's biggest commodity market could make energy consumers nostalgic for the 1950s, when U.S. policymakers, CIA hacks and political operatives firmly controlled Saudi Arabia, Kuwait, Iran and other key producers. I've kept oil on the touts list nonetheless, but only as a placeholder, since technical analysis no longer gives me a confident basis for forecasting the next big move. I don't mean to suggest that crude is untradable. Far from it, actually, since the intraday swings are so fraught with duplicity, greed and fear as to have become routinely predictable. Nudge me in the chat room if you have a trading idea you'd like vetted. But don't ask me where I think oil will be trading in a month or two, or at year's end, since there is really no way of knowing. My best guess for the very near-term is that the July contract is bound for 80.21, predicated on the June 11 low at 77.22 not being violated first.
Last week's rabid short-squeeze punctured bull-market targets I've been drum-rolling for months in Microsoft, Apple and QQQ. Moreover, the bullish look of the S&P 500 chart shown above is so clear and compelling that even the most stubborn permabears will need to make room for more upside to at least 6118, a nearly 13% rally from these levels. If the uptrend maintains its current pitch, it would hit the target just in time for Papa Bear to come bellowing from his lair at the 'correct' time of year -- i.e., when autumn leaves start to fall. The long-term charts allow three other scenarios that should not be ruled out. The first would be for the bull market to flame out here and now, with the S&Ps lying just a split hair from the pattern's 'secondary Hidden Pivot resistance' at 5461. I would rate this scenario a 40% possibility. More likely is a continuation to 6118, and then a major selloff. This is based, as are all Hidden Pivot forecasts, on price action at the red line, a 'midpoint' Hidden Pivot at 4804 that got shredded back in December. If a midpoint resistance is easily exceeded the first time it's touched, that's usually a sign that the target itself -- in this case 6118 -- will eventually be achieved. However, as you can see in the chart, the move through the red line was gradual rather than dramatic. This implies that although a further run-up to 6118 is likely, it is not a lead-pipe cinch. Second Wind, and Then... Given the pattern's clarity, it is difficult to imagine that the S&Ps will quickly push past 6118 when they get there. There will almost certainly be a tradeable pullback, and the odds are about 60% that it will be the beginning of
