Sellers struggled harder in GDXJ to break down the midpoint support (p=110.36) than in either Silver or Gold futures. That makes its chart more bullish, but not much. We should therefore infer that the bear market will resume, and that GDXJ will eventually fall to D=84.17 once this bounce is over. Of course, let's also allow for the possibility that the rally is for real by stipulating that a move exceeding May 29's peak of 120.05 would put bulls solidly back in charge after spending more than three months in purgatory.
Yields on the Ten-Year Note have fallen sharply since getting within pitching wedge distance of the 4.75% target shown. It's too early to say with confidence whether this is the beginning of a significant downtrend or just a correction that will eventually give way to a new upward surge. My strong gut feeling is the latter, but we may soon get to test that prediction if TNX continues down to the green line (x=4.58%). That would trigger a 'mechanical' buy signal with subsequent potential to reach p=44.90 or higher, an event that cannot but give us a definitive picture of trend strength.
I've flagged Hidden Pivot targets as low as 51.60, which would become no worse than an even bet following two consecutive monthly closes below 85.54 (basis the NYMEX August contract). This picture shows how an interim low near 75 hardly seems far-fetched, even for someone not adept at reading charts. Although I usually tune out head-and-shoulder patterns because they are nearly everywhere one chooses to see them, this one is so pretty that it literally points the way down to a basing target near the April 17 low where the pattern began. This implies that any rally should be shorted, presumably at a midpoint Hidden Pivot resistance. That actually occurred Friday morning at an 85.22 pivot whose provenance is proprietary. The theoretical trade ended the day significantly in the black, but it would be validated if the end-of-day weakness we saw continues down to 77.60, the 'D' target of a minor pattern on the hourly chart. _______ UPDATE (June 16, 10:36 a.m.): The futures should pick up support at 75.67. They are currently trading around 76.49, slightly off a 76.03 intraday low. _______ UPDATE (June 18): Sellers have crashed the support and everything else, including the right shoulder of a six-months-large H&S pattern. Its lopsided now but still begs a rally. Nothing here argues against the direful, 51.60 target flagged above.
Yields on the U.S. Ten-Year Note signaled an imminent rise to as high as 4.80% with Friday's powerful leap. Although we don't typically use patterns as obvious as this one for trading purposes, it should prove reliable for forecasting rate changes over the next 3-4 weeks. The A-B impulse leg is a strong one, presumably with enough boost to reach the target. Moreover, a decisive overshoot would strongly imply a further move to the psychologically important 5% level. There is one more thing to note, based on the chart: once above the red line, a pullback that would be misread by many observers as a sign of easing would actually be giving 10-Year rates a running start at 5%.
It's not just the daily graph that looks heavy. On both the weekly and monthly charts, ahead of the surge in March, price lows since early 2025 have exceeded granite Hidden Pivot supports. This suggests that crude's histrionics in response to the war with Iran were all but ordained to fall short of significant new highs. But easing is another matter, since it could take months or even years for prices to settle down to whatever passes for normal in such heavily manipulated markets. In the meantime, we are fortunate that traders and investors have become bored half to death with Trump's daily pronouncements on the war and the 'situation' in the Strait of Hormuz. Barring some unforeseen catastrophe in the Middle East, you can look for quotes to fall as low as 51.60 over the intermediate- to long-term. Two consecutive monthly closes below 85.54 would shorten the odds of this.
Microsoft still has room to fall, judging by the way sellers crushed the midpoint Hidden Pivot support at 423.21 on Friday. The pattern is gnarly enough to qualify as experimental. Even so, it is a well-established rule of the Hidden Pivot Method that price action at p is definitive regardless of the quality of the pattern. Since there is no ambiguity about the decisiveness of p's penetration, we can reliably conclude that d=380.10 is a very good bet to be reached. Nevertheless, if the stock were to reverse and touch the green line, the gyrations within the pattern's b-c leg make a 'mechanical' short there less appealing than we should prefer.
Who needs sophisticated analysis when the broad averages rise or go sideways 95% of the time, and when they never fall for more than three consecutive days? The chart assumes the E-Mini S&Ps will continue their ascent next week, possibly stopping for a short breather when they hit 7694.25, the 'D' target of the conventional pattern shown. The coordinates are probably too obvious to produce a precise top at that price, a Hidden Pivot, but I would still encourage you to try shorting there provided you know how to set up a 'camo' trigger to minimize entry risk. The goal is to make money even if the futures keep rallying, although that might entail being short only for a fraction of an hour. If we continue to short this gas-bag routinely at minor rally targets, one of these days we might actually find ourselves onboard for The Big One -- and what great fun that will be!
If you got long at or near the green line as I advised here last week, your theoretical, unrealized profit on the standard four contracts would be around $71,000 -- more than enough to pay for your subscription and a luxurious week in your favorite destination. Typically, I advise taking off half the position at the midpoint Hidden Pivot, shown here as a red line at 4636.80. At that point, you would have a realized gain of slightly more than $50,000; plus, two contracts left, each showing an unrealized gain of about $25,000, for swing at the fences. The 5144.00 rally target we've been using for months will remain valid unless the pattern's point 'c' low is violated first. But, yes, you're right: Who cares, as long as we can continue to exploit this tired pattern for all it's worth. ______ UPDATE (Jun 1, 9:52 a.m.): Easy come, easy go. A 'dynamic stop'-loss set at 1:3 would have stopped out the trade at 4576 for a fat gain, and an 'impulsive' stop on the hourly chart would have done the job at 4512. However, I will continue to track the position as though bulls are still holding the bag, frozen with fear by this morning's gratuitous plunge. Both of these risk-management tactics are covered in the Hidden Pivot Course I've made available free to subscribers. I will switch to the August contract shortly.
Rates pulled back so sharply from menacing heights last week that one suspects Trump's "team" was working its magic from the shadows. The president may not be able to control interest rates, but there is little doubt he can jostle them around for a little while when things start to get ugly. The week finished with a small bounce from slightly beneath a correction target at 4.43%. Although it's hard to tell whether this will prove to be the beginning of another scary run-up, a relapse exceeding Friday's low would portend more slippage to as low as 4.33%.
Friday's powerful thrust was global, and it put rates on the U.S. Ten-Year note on course for a run-up exceeding 5%, the highest they've been in nearly two decades. It is market forces driving the rise in yields, and although Trump may be able to convince some that the consequences will be short-lived, this can only create a credibility problem for him as mortgages head toward 7%, or perhaps even higher. The highest 10-Year rate I can project beyond the 5.09 'D' shown in the chart is 6.075% on the monthly (A=2.52 in Aug 2022). That would be hard to square with the very deep recession that would occur long before it costs The Guvmint (i.e., taxpayers) that much to borrow. _______ UPDATE (May 23): The long-term chart shows how the 6.075% target identified above was derived. There is so much thrust in this picture that the target seems likely to be achieved. It's hard to imagine how the U.S. economy could avoid seizing up under the burden of rates that high. In any event, the rally faces crucial resistance at the 4.839% midpoint Hidden Pivot (p) shown. I expect it to be decisively breached because the corrective retracement begun from the 5% top in October 2023 failed three times to reach its 'd' target at 3.675%. In the Hidden Pivot system I use to predict price reversals and gauge trend strength, the rule is that strong trends tend to produce weak countertrends. Thus, the failure of a correction to reach its D target usually means the dominant trend is likely to continue.
