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Unfortunately for the global economy, crude looks poised to move even higher, to at least the 119.51 target shown.  We've been using an even loftier target at 140.12 that's associated with a larger pattern tracing back to 2021. But let's see how buyers handle the lower resistance before we try to gauge the staying power of the rally. The D resistance will be shortable, potentially with a very tight stop-loss, since it can be expected to show precise stopping power similar to what occurred at p=111.38. I recommend the trade if you've made money on the way to the target. _______ UPDATE (Jun 1, 1:38 p.m.): Here's a pattern you can use to get a tradeable handle on crude over the next few days. Notice how it tripped a 'mechanical' winner earlier today.

As the bear market runs its course in the months and years ahead, it will be punctuated by sharp and sometimes spectacular rallies to convince investors the worst is over. That is how Mr. Market will trap most of them into sticking with stocks until the bitter end. For only when the last bull has thrown in the towel and mass capitulation takes stocks down to levels practically unthinkable now can a floor be created for the next bull market. The first such bear rally started in mid-March and lasted for two weeks. It was not particularly impressive because it didn’t have to be: a mere 15-percenter would have pushed the S&Ps to new record highs. The rally failed well shy of that benchmark, however, before a punitive relapse set in. Stocks appear to have bottomed last week, but not before piercing a Hidden Pivot support that should have held if the current rally is going to achieve new highs. Last week’s commentary was skeptical that the rally would retrace fully half of the downtrend since the bear market began on January 4. That would equate to a top near 4300 in the S&Ps. Using the recent low at 3807, there is now a technical basis for a more confident and precise forecast. Specifically, the S&P 500 appears bound for a minimum 4305.50, basis the June E-Mini contract. The futures look all but certain to reach that number, given the way they impaled the ‘midpoint Hidden Pivot’ at 4056 toward the end of last week. Less certain is that the rally will end there. Indeed, if it blows past 4305, that would suggest Mr. Market has nastier plans for bears who may have overly enjoyed the April/May plunge. Not Quite Impossible Will the rally achieve new highs? I strongly doubt

I am unable to find the pattern shown in Edwards and Magee's supposedly definitive book on technical analysis. None of their wedges, pennants, channels, flags or triangles exhibit the seeming power of this one, with its rising whatchamacallit juxtaposed against Q1's mountainous upthrust. There may be no precedent for such a globally important commodity as crude oil exhibiting this kind of behavior. But could the rally simply reverse nonetheless, sending quotes plummeting to levels that would be commensurate with the worldwide recession/depression that is brewing?  I have been conflicted over this question, having argued both sides of it in recent commentaries. For the sake of clarity, however, I will treat the chart as I would any conventional ABCD, relying mainly on price action at the midpoint Hidden Pivot, 114.33, to tell us what is going on.  It may turn out that last week's high, which fell 1.04 shy of C-D's midpoint, will turn out to have been an important top. If not and the futures popped through it this week, that would reinforce the case for a continued rally to as high as 140.12. Since that seems impossible with the current collapse in China's manufacturing sector, it can only imply, as I noted here earlier, that a catastrophic disruption in supply is looming. _______ UPDATE May 26, 5:42 p,m.) The futures poked slightly above the 114.33 midpoint resistance, but this is not technically significant. Let's see what the next day or two brings.

The dollar bull is showing signs of fatigue, so let's be ready for the first major correction in more than a year. It would not likely diminish prospects for an eventual move to the 112.14 rally target shown in the chart. However, DXY may first have to come down to the green line (94.22) before it has fully corrected the bull market begun in 2014. A plunge of that magnitude would undoubtedly be read by economists and pundits as a phase in the dollar's demise, but it would actually make the greenback a screaming 'buy' from a Hidden Pivot standpoint.

Although we might have expected Bertie to get some respite after completing a head-and-shoulders pattern over the last ten months, it is instead breaking down again. Mid-May's breach of an important Hidden Pivot midpoint support at 31,434 hinted that bitcoin's long dirge since peaking near 70,000 last November is not over. However, the May 12 stab beneath the H&S pattern's 'floor' implies things may be even worse than they had seemed. Accordingly, we'll stick with the 14,751 target for now while allowing for the possibility of a tradeable bounce from p2=23,092. For now, you can use that secondary pivot as a minimum downside target. _______ UPDATE (May 31, 11:03 p.m.): Bertie's bullish wilding spree may have seemed impressive, but it noticeably failed to exceed the middling 'external' peak shown in this chart.  This is a subtle sign that the rally is unlikely to get legs, so be prepared.

The same geniuses who recently handicapped a recession that likely began several months ago as a 20% possibility are now reassuring us that the bear market has already run its course. If so, it would be the mildest, shortest bear market in history --three hours and 20 minutes, to be exact. The S&Ps entered bear-market territory on Friday when they dipped below 3854 at 12:10 p.m. That represented a 20% drop from the record high 4818 recorded on January 4. Permabears didn't have much time to celebrate, however, because nervous nellies began to cover short positions an hour later. The buying began with the usual trickle, but shortly after 3:00 p.m. the stampede was on. It pushed the S&Ps back above 3854 at 3:30 p.m., and within the hour to a small gain on the day. Wall Street and its news media toadies will spin Friday's trampoline bounce as bottoming action. However, even these bozos are not so bold as to trumpet the likelihood of new record highs, at least not yet. Their hubris will probably remain subdued until such time as the S&Ps have recouped perhaps half of their losses since January. That would put the index at 4300, a short-squeeze worthy of the name. Relapse Odds My guess is that the rally won't get anywhere near 4300 and that a relapse will begin within the next 4-7 days if not sooner. Bears may be sufficiently spooked to provide buoyancy as the week begins. But they were almost as spooked a week earlier, when a Friday short-squeeze led me to mistakenly expect a follow-through on Sunday/Monday. This time, for bulls and bears alike, the yellow flag is out.

The pennant  formation shown is building a base for June Crude to pop to as high as 146.42. This seems incredible and goes against the grain of my recent forecasts, which have implied that crude topped at $121 in March. Even so, I'm forced to consider the possibility of a powerful upthrust, based on the purely technical evidence in the chart. Such a move would not likely be caused by a surge in the global economy, which appears headed toward deep recession. It would also be bucking deflationary headwinds that will continue to mount as higher interest rates crush borrowers.  The only way crude could get to $146 is with a massive disruption of the distribution chain such as war might cause. Is the chart predicting a geopolitical conflagration?  So it would seem.

TLT has taken a promising but still-fragile bounce from the 112.31 secondary Hidden Pivot of the pattern shown. When reversals occur at p2, they sometimes continue in the same direction, eventually stopping out the pattern with a move through 'c' -- in this case 123.03.  This dynamic is called 'Matt's Curse', named for the subscriber who first observed it, and in this case the implications are bullish. The rally would become less tentative with a pop above  the 'external' peak at 119.31 recorded on May 3. ______ UPDATE (May 24, 10:05 p.m.): The short-squeeze gap on the opening kept the rally alive by generating a fresh impulse leg on the daily chart, albeit by a hair. The next thrust must exceed 120.35 to keep the elevated mood stoked.

There's a Hidden Pivot support at 1757.40 to break gold's steepening fall, but then what?  A tradeable low seems very likely to occur there, or somewhat lower near one of several 'external' lows that stairstep down to 1704.30. The downtrend could even end with Friday's 1797.20 low, the pattern's 'secondary' pivot, but I wouldn't count on it. The futures are certain to be volatile and therefore tradeable while they carve out a bottom, but opportunities will necessarily be labor-intensive and short-lived.