Rick’s Picks

Bitcoin has been a reliable indicator for the manic, speculative energy of this never-ending bull market, so its unusual weakness recently should be a concern on Wall Street. The pattern shown strongly implies that the selloff is headed down to at least 104,733. On this chart, price action already tripped a winning 'mechanical' short at 111, 293, which suggests the odds of a similarly tradable low occurring at the 104,733 target will be favorable. Please note that an alternative Hidden Pivot target at 105,548 could also engender a tradable bounce. You can try bottom-fishing in either place with a tight stop-loss fashioned from a small-chart trigger, or via your own method.

Bulls blew past a longstanding rally target at 78.28 last week with such brio that I've shifted my sights to a new objective at 86.41. GDXJ looks all but certain to get there, given that its ascent impaled p=75.16 on first contact.  The pattern is somewhat unusual because of the subdivided A-B leg, but the midpoint Hidden Pivot (p) should prove reliable nonetheless for projecting an easy move to the corresponding 'D target. Once the rally hits p2=80.78, a relapse to the red line, however unlikely in a move this strong, would trigger a 'mechanical' buy at p=75.16. The stop-loss would be at 71.41.

The struggle to surpass a stubborn midpoint Hidden Pivot at 6494.25 has consumed bulls for more than two weeks and made a follow-through to D=6749.00 less than the usual sure thing. However, we are obliged to give the uptrend the benefit of the doubt, since it has routinely swept aside every technical resistance it has encountered over the last 16 years. This particular pattern has already rewarded 'mechanical' buyers at the green line (x=6366.88) with a quick, fat profit of nearly $15,00o per contract. It would be no detriment to the chart's bullish look if that were to happen again, yielding what I would ordinarily call 'sloppy seconds'. Alternatively, a breakdown below C=6239.50 would probably signal the beginning of the end. However, the sideways hesitation at these heights does not look sufficiently dramatic to cap the most spectacular bull market in history. Wouldn't you agree?

Gold futures are ascending for the umpteenth time into a zone of multiple peaks that resemble the Denver airport. Are they finally breaking out? It would seem that way, but we should be cautious nonetheless, since every rally since last May has ended in disappointment. Gold hasn’t exactly fallen apart on the pullbacks, which added to our confidence in bullion’s long-term prospects. However, if this is a breakout we’ve been waiting for, we should be careful what we wish for, since it very likely means the 16-year-old bull market in stocks is over and that the Trumpster is in for some rough sledding. Looking just ahead, the futures should be presumed bound for at least p2=3584.30 if they poke decisively above the 3503.70 top recorded on August 8. _______ UPDATE (Aug 31, 1:40 p.m.): No change in my outlook, although it is interesting that gold is threatening to break out just as the stock market turned unusually sickly last week. My hunch is that the global economic crisis that has been brewing for decades will give bullion's bull market dramatic force. The first evidence of this we would see on the chart is a breakout above 3503.70, as noted above. If decisive, that would put the October contract on a path to 3719.70 We should know by the end of the week whether gold is just screwing with our heads yet again.

I have outstanding targets on the monthly chart as high as 7499, but this truncated view is the one we should focus on for now, since it is growing clearer and more compelling by the day. It has produced three winning trades so far: a conventional 'buy' at the green line; a short from the red line, and a 'mechanical' buy on the pullback to the green line. This suggests that p2=6621 and D=6749 will also be usable and reliable for producing profits.  However, because buyers did not exactly impale p=6494 on first contact, or even on the second, there can be no guarantees the target will be reached. The secondary pivot (p2=6621) ) is another matter, however, and its attainment will become a lock-up if the futures end the coming week resting above it.  In the meantime, yet another relapse to the green line, however unlikely, should be treated as an attractive 'mechanical' buying opportunity.

My outlook is still bullish, with a 593.73 target in play that was introduced here last week. This chart offers a different view, however -- one that suggests the stock would become an opportune buy when the correction comes down to p=493.67, the midpoint Hidden Pivot of a pattern I've cloaked for proprietary reasons.  You should use a trigger interval taken from the hourly to initiate the trade, but it cannot be calculated accurately until the stock is close to p. As of now, it looks like $2.08 TI should do the trick, but a more timely calculation could help to reduce that number. As always, a decisive breach of the midpoint support would shorten the odds of more slippage to the 'd' target -- in this case 431.89.

October Gold took off last week from a low that missed our stingy bid by $9, or 0.2%.  Friday's rally in bullion was of a piece with lunatic buying in stocks triggered by blather from Powell. However, I don't see gold as being on the verge of a melt-up like the one I'm predicting for stocks.  I've highlighted Friday's rally to show how insignificant it was amidst four months of meaningless dithering.  Yes, the move could conceivably turn into something worth watching. But there is little point in getting all het-up about it now.  When that finally happens, the futures should be presumed on their way to 3710.70.

The reverse pattern shown stops short of greenlighting a rally into the void, although it says that a move to at least d=39.865 is practically certain.  Move the point 'A' to a visually more obvious place, one low to the left, and it projects a higher 'D' target at 40.605.  I am not skeptical that it will be reached, but I'll be curious to see how such an obvious pattern screws with bulls' heads. Our short-term trading bias will remain bullish in any case, but I'd suggest negotiating your entries at p or d pivots of rABC patterns on the hourly chart or less. --______ UPDATE (Aug 31, 1:54 p.m.): Silver lurched on Friday to within inches of the 40.605 target flagged above. This Hidden Pivot resistance is all but certain to show stopping power, presumably tradable and possibly precise, but let's wait and see how buyers actually interact with it before we reassess the strength of the bull trend. ________ UPDATE (Sep 2, 1:42 p.m.): Sliding 'A' down to 32.100 (May 15) yields a new minimum objective at p2= 42.138, or D=44.090 if any higher.

Careful!  GDXJ's behavior has been feral the whole way up, albeit with no big surprises. Now it is closing on a 78.28 target that has been three months in coming. That implies the target, a Hidden Pivot, should show tradable stopping power, even if the blunt obviousness of the pattern will likely work against a top occurring precisely where it ought to. If you've held onto a long position all the way up and want to keep it, or part of it, consider writing some near-the-money calls with an expiration date no more than 2-3 weeks out.