A bigger picture stretching back a year projects as high as 666.84, but we'll stick with a smaller pattern for now that offers better form and clarity. It has signaled a move over the near term to as high as 464.66, but this has yet to be affirmed by a move through the midpoint Hidden Pivot (p=431.34). That number can serve as a minimum upside projection for the week ahead, as well as a tool for positioning a 'mechanical' buy if the opportunity should present itself. As always, a decisive push past p would shorten the odds of achieving D.
The two-month-long ascent of rates on the Ten-Year Note did an apparent death rattle last week with a run-up to 4.46%. That fell slightly shy of the 4.48% peak recorded at the end of March. I still think the peak will endure, at least for the foreseeable future. This outlook remains to be confirmed, however, by a downtrend that generates an impulse leg on the daily chart. At the moment, that would imply a decline touching 4.22%. I should note that someone who thinks rates will fall is considered bearish on rates. Because this can be confusing, we tend to say that the person is bullish on bonds, since bond prices rise as rates fall. _____ UPDATE (May 13, 6:20 p.m.): So much for my death-rattle theory. TNX broke slightly above two previous peaks, but there is Hidden Pivot resistance an inch away, at 4.52%. Let's see how bulls fare before we draw any conclusions. If the resistance gives way easily, that will imply more upside to the next at 4.61%. _____ UPDATE (May 15, 10:36 a.m.) Today's breakout has all but clinched a finishing stroke to the 4.61% target flagged above. Let me therefore introduce a new one at 4.75%, my worst case for the near term. I'll also remind you that this is one important economic variable over which Trump has no control, although his eagerness to put a dove in charge of the Fed could be seen as driving rates higher. And mortgages thrusting once again toward 7% will surely not help to Make America Great Again.
The 'mechanical' buy at the red line (p=4636.30) went in the black last week with a pop to 4775 on Thursday. That would equate to a theoretical gain of around $14,000 per contract, but there is an additional $36,000 of profit potential if the futures reach the 5144.00 target. Price action at p has been wishy-washy, but that is no reason to presume that the uptrend will not reach p2=4890 at least. When it does, you should take off half of the position you hold, either in this vehicle or in an equivalent such as GLD. Be alert to the possibility of a stall or reversal at 4847.40, a truly 'hidden' resistance.
With strong back-to-back rallies on Wednesday and Thursday, the futures made significant progress last week toward the 93.995 target shown. Although we were able to get long in Gold using a similar pattern, July Silver's recent dip did not quite reach the green line (x=69.744) to signal a 'mechanical' buy. It left the station without us, but that only shortened the odds of a move-to-target. A relapse to the green line (x=69.74), however unlikely, can be used to get long using a 61.65 stop-loss.
Last week's impalement of the red line, a midpoint Hidden Pivot resistance at 103.58, is bad news for the geopolitical and economic world, since it implies June Crude will reach a minimum 128.19. Although the feeble point 'A' leaves a lot to be desired as a starting point for the pattern, it will do in a pinch. A pullback to the green line (91.28) would undoubtedly be read as relief, but this chart says it would be an opportunity to buy aggressively for a blast to new highs. A 'camo' trigger should be used to cut the approximately $12k entry risk by at least 95%. The tactic is detailed in a course I've made available free to subscribers.
Rates on the Ten-Year Note climbed to within inches of the 4.48% high recorded on March 27, but there is reason to doubt they are about to break out. Specifically, the pullback from the high breached a Hidden Pivot midpoint support at 4.35%, implying more slippage to at least 4.28% is no worse than an even bet. Using the futures contract, traders can get short at 4.39% (interpolated) with a stop-loss at 4.44%.
A measly 3% rally would reach the 7499.75 target shown. This is a composite chart, so we shouldn't expect to see precise stopping power, but it should be close enough for government work. There are two other Hidden Pivot resistances to hold in mind if the futures keep going: 7644 and 10,336. That last number is the highest I can project on the monthly chart, and it is intended to stretch your imagination, especially if you are a permabear. Because penetration of p=6166.00 was effortless and decisive, it's all but certain the lower target will be achieved. Since this is the bull market that won't die, don't assume the target will mark an important top unless it coincides with Iran's complete surrender.
Microsoft has had a strong move off March's 356 low, but the monthly chart makes it look feeble. True, the stock's steep descent tripped a 'mechanical' buy at the green line (x=408.52). However, I don't expect the bounce to get much further than the midpoint Hidden Pivot resistance (p=472.25), if that far. I am no fan of head-and-shoulders patterns because they are everywhere one cares to find them, but it is not difficult to imagine a picture-perfect right shoulder forming. Regardless, the pattern as is should serve our need to keep close track of this crucial stock-market bellwether.
Although mid-April's high narrowly missed the 'd' target at 139.46, a pullback to the green line (112.02) should still be regarded as an opportunity to bottom-fish 'mechanically'. The odds thereafter would favor a one-level move to p=121.17, although not necessarily a finishing stroke that finally achieves d. As implied above, a pullback to the green line (x=112.03) should be used to get long, much as I have suggested in July Silver. A 'camo' trigger is obligatory, since the entry risk with a stop below 'c' would exceed $900 per round lot. _______ UPDATE (May 8): GDXJ took a powerful leap this week. Unfortunately, it came off a low at 112.80 that missed our bid by a couple of inches. _______ UPDATE (May 8): A shallow dip to start the week came even closer to triggering the 'mechanical' bid I'd suggested at 12.02 (see above), but we still missed getting aboard by 78 cents. That didn't change the still-good odds that the 139.46 target eventually will be reached.
I've arbitrarily chosen to emphasize the bullish side of this chart, using a reversal pattern that projects to 5144.00. It assumes that June Gold is on a 'mechanical' buy signal that triggered last week with a dip below the red line (p=4363.30). (It missed being stopped out by 4467 by $55.) The somewhat bearish possibility starts with A=5474, the March 6 high. The corresponding midpoint Hidden Pivot support at 4244.8 would be a back-up-the-truck number for bargain-hunting bulls.
