Free

Did you get Mr. Market's little joke last week?  Although angst over the Fed's plan to tighten until the cows come home stirred up a shitstorm of commentary and fearful headlines, the stock market acted like it was reliving a quiet week in 1955 under Eisenhower. For those who bet on volatility, it was like watching the croupier rake in all the red/green bets when zero has come up on a roulette wheel.  The 4146.75 target shown remains my worst-case for now, and the pattern still looks serviceable for getting short on the way down.  Don't pass up an opportunity to bottom-fish at p=4388.88 in the usual way. Nudge me in the chat room and I may be able to help. I haven't mentioned a scenario in which the futures rally to stop out C=4631 because the buying enthusiasm to get them there just doesn't seem to be present at the moment. ______ UPDATE (Apr 12, 4:35 p.m.): The 4388 Hidden Pivot noted above nicely nailed the low of a 39-point rally that could have been worth as much as $16,000 to anyone who jumped on the opportunity as I'd advised. Alas, the trade triggered in the dead of night, as so many great opportunities do, so not many would have caught the move. The subsequent relapse to a new intraday low identified the rally as a distribution. It also reaffirmed that when a trade goes our way, we don't want to be caught patting ourselves on the back as Mr. Market turns on us with a buzz saw. Here's a chart that shows the stupid, gratuitous hump created by the day's price action. Considering how bulls got sandbagged, look for more weakness on Wednesday.

The 116.06 downside target seemed farfetched when it first came into play theoretically back in January. However, with Friday's plunge through p2=125.83, it has become no worse than an even-odds bet to be achieved. The pattern looks a little too obvious to yield up a bottom-fishing gem for us. Indeed, as a practical matter I'll be look for the Big Turn to occur in the discomfort-zone void between p2 and D=116.06. For now, however, unless you've been trading this vehicle all the way down, I'd suggest continuing to gape in awe.

The bull trend begun in February has gone comatose along with the stock market. The timing of the breakout is unpredictable, but look for the futures to ascend quickly to p=1993.20 when it happens. The futures could continue to swing gratuitously $40 either way in the meantime, but any trading opportunities thereof would need to come from the lesser intraday charts.

The pattern shown is so wickedly gnarly that I'm surprised last week's low did not occur within pennies of the 93.07 target. I would be logical to infer that a bottom is in and that the futures are telegraphing strength in the week ahead, and so we shall. But I will also suggest keeping an open mind to the possibility of a relapse to the target, since that would enable us to bottom-fish with risk under very tight control. ______ UPDATE (Apr 11, 9:04 a.m.): Now that's more like it.  The futures did in fact relapse to a 92.93 low just a millimeter below my target. This allowed traders to get long in numerous ways that could have been worth anywhere from around $600 to $2000 so far. This chart shows how you could have set up a conventional 'camouflage' trigger at the green line, x=93.73. ______ UPDATE (Apr 13, 10:50 p.m.): Just a smidgen to go before we can gauge the fledging uptrend's strength as it interacts with p=105.03. As always, an easy penetration would portend more upside to D=117.01. Here's the chart.

[Counting on the Fed to ride to the rescue when the bubble finally pops?  You had better have a Plan B, and for good measure a Plan C, since America could be in for something far worse than mere recession when the asset boom ends.  In the commentary below, my friend Charles Hugh-Smith spells out the reasons this is likely with greater clarity and concision than I have. I am grateful for his permission to reprint the essay, an installment of the 'Musings' emails that go out to subscribers every Saturday. Discover his extraordinary blog, books and deeply original reflections at OfTwoMinds.com by clicking here.   RA ] **** By Charles Hugh Smith The saying "demographics is destiny" encapsulates the reality than demographics--rising or falling trends of births and deaths--boost or constrain economies and societies regardless of other conditions. Demographics are long-term trends, but the trends can change relatively rapidly, with momentous future consequences. As this article below mentions, extrapolating the high birth rates and falling death rates of the 1960s led to predictions of global famine. As death rates declined and women's educational and economics prospects brightened, birth rates fell, a trend that now encompasses most of the world. As a result of the Green Revolution (hybrid seeds and hydrocarbon-based fertilizers), the Earth supports more than twice as many humans as were alive in the 1960s (3.5 billion then, 7.9 billion now). Now the problem is a shrinking working-age population that will be unable to support the financial and healthcare promises made to the retired generations. Birth rates in developed nations have fallen below replacement rates, which means populations are shrinking and populations are aging rapidly, i.e. the average age of the populace is rising.. One side effect discussed in this article is the decline of the cohort of young

The rally has blown past every Hidden Pivot resistance that might have stopped it, suggesting it has a ways to go. Specifically, the move could reach the 3.22% target shown in this chart. The pattern used to project the target is highly unconventional but legitimate nonetheless, since the point 'B' high surpassed some very real 'external' peaks from 2019.  If the foregoing is correct, the economy is in for quite a bit of pain before a collapse and a bear market snuff inflation for a generation. The stall at p=2.45% could conceivably be the end of the move, but the breach is already significant enough to presume otherwise. _______ UPDATE (Apr 5, 6:19 p.m.): The rally ripped though p=2.45% today with such force that we can infer that p2=2.83% of the chart linked above will likely be achieved. It is tied to the 3.22% target. [Apr 6 note: My apologies. WordPress failed to publish an update and chart Tuesday night that were intended to take the guesswork out of this rally. Here's the chart, which shows the provenance of the 3.22% target, now an odds-on bet to be reached eventually.]

The chart shown in the inset employs the same coordinates I've used in June Gold to produce a picture not quite as bullish but still promising.  Gold has already poked above its red-line 'midpoint' Hidden Pivot, but silver has merely exceeded the green line (x) to signal a rally to at least p=30.76 theoretically. The thing to realize. however, is that the stab higher three weeks ago surpassed an 'external' peak, generating an impulse leg of weekly-chart degree that will not be easily reversed. That would require a drop below C=21.41 of the pattern -- possible but seemingly unlikely at this point. _______ UPDATE (Apr 11, 8:30 a.m. EDT): May Silver has finally launched toward the 25.83 midpoint pivot of the pattern shown here.  It will serve as a minimum upside projection for the next day or two. As always, an easy move through this 'hidden' resistance would portend more upside to the next Hidden Pivot level, in this case the 'secondary' pivot at 26.73. ______ UPDATE (Apr 12, 4:52 p.m.): The rally topped out a penny above the 25.83 Hidden Pivot we were using as a minimum upside projection. No one mentioned this in the chat room, of course, but I lack the energy to admonish or cheerlead. Score it as yet one more tree that fell silently in the forest.

The rally is almost certainly corrective and would trigger an enticing 'mechanical short even if it were to soar to the green line (x=145.26).  More likely is that the downtrend will resume well before then and fall to at least p2=125.83, the minimum downside target we've been using for the last several weeks. Further weakness to D=116.06 is unpredictable as yet, since the initial encounter with midpoint support at 135.59 on the way did not feature its impalement. _______ UPDATE (Apr 6. 11:53 p.m.): This week's mini-crash has brought TLT down to within four-tenths of a percentage point of the 125.83 Hidden Pivot we've been using as a minimum downside target. If this number fails to produce a strong bounce, that will shorten the odds of further slippage to D=116.06.

Crude is correcting a big, bullish pattern shown here last week with the potential to get it to 130.13. It is also on a weak 'mechanical' buy signal at the moment from 101.68, with a stop-loss at 92.19. I did not recommend the trade, since it would be 'sloppy seconds' in relation to an earlier buy signal that narrowly failed to produce a juicy winner. Where to next?  Use the pattern shown in the inset to gauge trend strength enroute to a presumptive downside target at 93.07. The pattern looks gnarly enough to be useful for tightly stopped bottom-fishing, or even to 'mechanically' short a rally to x=104.83. _____ UPDATE (Apr 4, 10:21 p.m.): The short recommended above has triggered this evening, at least in theory, but because no one mentioned it in the chat room, I have not provided tracking guidance. Since theoretical entry risk was around $3,900 per contract, the trade demanded a 'camo' strategy that would pare that down to around $300-$400..