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It was odd to see this vehicle gratuitously stop out deflationist bets on Friday, trading as though it were a malign, nutty natural gas contract. Such nasty price action in this interest-rate proxy can only be ascribed to the shaky inventiveness of the fraudsters who run the central bank. The old adage 'Fake it till you make it' doesn't apply in their situation, since it is more a case of 'Fake it till you trigger a global depression'. In the meantime, the idiotic will-they-or-won't they game that has been driving the markets for more than a decade may have run its course with the recent 75-basis-point rate hike.  With the country officially in recession and a third consecutive quarter of GDP shrinkage likely to settle the political argument over semantics, more tightening seems almost as unlikely as easing. Does that mean market forces will come to bear more forcefully on rates? That sounds pretty scary, but even scarier is the possibility rates will continue to fall, as they've been doing since mid-June, because the economy is imploding.

At the current pace, this anemic uptrend will reach the D target at 1985.40 by next June. Something's got to give, obviously, since no bull market can survive such torpor. We may be spared waiting, however, if the futures pop to p=1840.80 sooner rather than later. A decisive move past that Hidden Pivot would imply the December contract is no worse than an even-odds bet to continue to at least p2=1913.10, if not necessarily to D.  In the meantime, Friday's downdraft tripped a so-so 'mechanical' buy at x- 1789.50, stop 1769.90 (daily, A= 1727.00 on 7/27). I didn't recommend the trade because getting long ahead of a weekend is almost always unappealing.

GDXJ has traversed the 'reverse' pattern shown with such caution that many bulls must be wondering when the obligatory air-pocket-from-hell is coming. It's been a while since a rally in any gold vehicle achieved a 'D' target, even a relatively modest one like the 35.99 Hidden Pivot resistance shown in the chart (inset).  Rest assured, the target will be achieved, even if Mr. Market seems to delight in busting the chops of gold bulls whenever they wax -- here's that fatal word again -- hopeful. In this case, although the pop through 'p' took two tries, the latter was sufficiently decisive to imply that bulls were in charge, even if a little shaky. Our concern in any event is not whether D will be reached, but whether this proxy for exploration companies can fist-pump its way past it, especially on the first attempt.

The rally from mid-June's 108 low would appear to have sputtered out in a bad place, just shy of the 121.68 'D' target shown in the chart. The target remains viable nonetheless, and there are reasons why we should give it the benefit of the doubt. The most important is that the last portion of the upthrust exceeded an 'external' peak at 119.74 recorded in May, generating a robust impulse leg of daily-chart degree. Also, when TLT popped through the midpoint support at 116.87 after a week of trying, it built a base for a presumptive thrust to D. Last week's close beneath the 'launching pad' was not exactly a sign of robust health, but I see it as exhaustion selling related to the way in which the charlatans who run the central bank mismanaged our expectations' last week. The official story that the economy is doing okay and reality have moved widely apart, but the recession is real and will continue to exert downward pressure on yields. They are already high enough to snuff the economy worse than in 1973-74. Falling energy prices will help to somewhat mitigate the effect, but they will not reverse it. TLT in any event would trigger a 'mechanical' buy if the pullback hits x=114.46. _______ UPDATE (Aug 11, 5:15 p.m.): The savage intensity of the selling has diminished my enthusiasm for a 'mechanical' buy that triggered today at x=114.49. Another factor that put me off is the weak, meandering impulse leg. Let's spectate for now.

It's been a particularly tough slog for Bertie these last couple of months. Those who have been praying for a big short squeeze to lighten their losses are many. Quite a few were trapped at much higher prices, including some of the biggest crypto bettors in the world. Prayerful losers constitute heavy layers of supply that didn't exist in bitcoin's early days. Supply is particularly daunting along the final few, crushing bars of bitcoin's collapse last spring. Two months of heavy lifting since then have succeeded in hoisting this vehicle only to the midpoint of the last bar (see inset), which saw BRTI free-fall from $32k to below $19k. If and when it rises to the 25,634 low from the swift and devastating down-leg ended in mid-May, buyers may begin to feel like Sisyphus as they shoulder into it for an indefinite period. Why bitcoin should have any value at all was always a fair question. But $69,000 per copy? I asked this question of many experts, some who'd made fortunes on the way up, but I never got a good answer. It came out of nowhere and is not money by any stretch of the imagination, just a secure means of recording transactions.

[The following went out last month to clients of my friend Doug Behnfield, a wealth management advisor and senior vice president at Morgan Stanley in Boulder CO.  Like your editor, he is skeptical that consumer inflation can persist for long with the U.S. economy in recession and a bear market in progress. Deflation is coming, he says, along with a further decline in stocks of at least 20% from early July's lows. Doug has been recommending long-dated Treasurys both as a defensive investment and for potential long-term capital gains from falling interest rates. RA]  On January 11, 1987, the Denver Broncos played their last playoff game of the season at the Cleveland Browns. It was rainy and muddy. With 5 minutes left to play, the Broncos had the ball on the two-yard line after a muffed kickoff return and the score was 13-20, Cleveland. Legend has it that as the huddle was called on the two, ProBowler and offensive lineman Keith Bishop said to the team; “We got ‘em right where we want ‘em!” Through a series of runs and passes, sacks and scrambles, John Elway led his team 98 yards to score a touch-down to tie the game. The Denver Broncos won in overtime and went on to the championship game. The first half of 2022 is characterized by a bear market in stocks with the S&P 500 down 20.58% and the NASDAQ down 29.51%. While shorter maturity bonds were down much less, the longest duration Treasury and municipal bonds were just as bad as stocks. The Index of long Treasury Strips was down 27.90%1 and the CEF Connect Index of National Leveraged closed-end Municipal Bond Funds was down 20.1%2 . Here, at the end of the first half of 2022, we are staring at the worst start to

This correction could turn out to be be the most significant since the Covid outbreak in 2020. Higher peaks this spring diverged from lower stochastic peaks, as you can see. This is quite bearish and portends more weakness until the stochastic lines reach the oversold zone between zero and 20. There are no obvious Hidden Pivots target below, but an imaginative reading of the weekly chart suggests the dollar could grope its way down to as low as 97.63 in search of  bottom. That would represent an ostensibly healthy, 10% correction from the 109.29 high recorded a few weeks ago. It would probably be misread as the dollar's death knell, but from a technical standpoint the retracement could prepare the buck for a rally strong enough to usher in an era of deflation that seems inevitable.

The A-B leg is sufficiently compelling that we can infer rates on the 10-Year Note are on their way down to at least 2.49%, a hair beneath the psychologically important 2.50% level. That would be a good place for a pause, but it is more likely that we'll see a bounce. It's too early to tell whether this would be the start of a strong, bullish reversal, but if so, it holds bullish implications for the big banks, if not for other sectors of the U.S. economy.  Alternatively, if D=2.49% is easily penetrated, it would imply ore slippage down to 2.30%, or even 19.10%. Both targets come from a reverse pattern on the monthly chart.

Last week's price action served to remind us that big rallies and even entire bull markets are driven mainly by short covering. This doesn't happen by accident; Wall Street's quasi-criminal masterminds set short squeezes in motion using news as a catalyst. The booby traps they employ are more or less predictable, but they succeed anyway because DaBoyz can count on short-covering bears to panic every time under certain conditions. On Friday morning, for instance, in the wake of a 75-basis-point rate hike by the Fed, trade-desk capos jockeyed index futures into position so that a tough resistance that had thwarted them a day earlier and overnight could be dynamited into oblivion. The chart shows more than 14 hour of head-butting at a 4109.25 'hidden resistance' I'd disseminated to subscribers a day earlier. The target had worked precisely, allowing them to jump on the trend. Some reported exploiting it in two ways: 1) getting long for the ride to it; and 2) getting short when it was hit. This could have produced a profit of as much as $1,400 per contract. However, profiting from a short at the top would have required waiting until an hour prior to the opening bell, since that's when the Street's lieutenants began to work their carnival midway illusions. How to Exhaust Sellers It was a piece of cake, since they've been practicing ever since the Grandaddy of All Bull Markets took flight in 2009. They simply pulled their bids, just as they've done hundreds of times over the last decade, allowing index futures to plummet ahead of the opening bell. This trick completely dried up selling, leaving stocks no way to go but up when the opening bell rang.  At that point the carny men simply stepped aside and let short-covering panic accomplish what mere