Just a little higher would trigger a 'mechanical' short on the weekly chart, but the pattern is not of the highest quality, and my gut is saying not to resist the rally. A better opportunity may lie in bottom-fishing the next correction, which could be as much as $78 or as little as $39. We'll let bulls deal with resistance from July 7's top-let at 2406.70 first, but stay tuned to the chat room and your email notifications if you trade this vehicle and want to stay attuned in real time. Please note that a worst-case relapse could bring the August futures down to as low as 2204.20 without diminishing the bullish look of the long-term charts. This is unlikely in my view, but it never hurts to be prepared for whatever pain bullion is capable of dishing out.
The 'mechanical' short GDXJ triggered last week when it popped to the green line (x=45.02) is tempting, but I'll suggest spectating instead, since Comex Gold's chart is less appealing as a bear play, even a short-lived one. The shorting signal means this vehicle is likely to fall back to at least p=42.79 before it can attempt a push past the pattern's point 'C' high at 47.25. For now, we should pay close attention to abcd corrections on the lesser charts, since they will be warning of a relapse if their respective downside 'd' targets are exceeded. ______ UPDATE (Jul 12): Buyers have blown through May 20's peak at 47.25, but price action has been less bullish in gold futures, which are still on a 'mechanical' sell signal. Time will resolve this odd discrepancy, probably in bulls' favor, but I'll wait for it to happen before hazarding a forecast you can bank on.
If T-Bonds continue their hellish slide into the abyss, this ETF proxy for long-dated Treasurys should be hitting 70 around election time. So much for Wall Street's misplaced "hopes" for a helping hand from the Federal Reserve. That won't stop speculation, every time the Open Market Committee meets, that perhaps a smidgen of easing is coming toward the end of 2024. Will they never learn? Europe's moribund economies desperately need a global monetary blowout to revive the illusion of growth, but Powell isn't playing ball. Tom Luongo thinks they will stir up a banking crisis this fall in order to scare Powell into complicity. Under the circumstances, it's hard to imagine that they won't try this. If the crisis is scary enough to cause Powell to capitulate, the Davos crowd may regret getting what they wished for,
Last week's descent to the green line (x=105.03) has triggered a 'mechanical' buy there that rates a 6.4 on a 1 to 10 scale. That means the trade looks moderately appealing and has an approximately 64% chance of rallying to at least p=106.07 before DXY could dip below C=103.99, stopping out the pattern. A return to p would not necessarily be the end of the bull cycle begun from 100.62 last December, but the dollar could still spend months in tedium with little progress in either direction.
Bulls took charge last week, a development I had not expected so soon. An all but certain test of the midpoint resistance at p=32.150 seemed assured when the futures ended the week an inch off the intraday high. The pattern looks too obvious to yield a very tightly stopped short, but price action at the midpoint Hidden Pivot cannot but give us a firm handle on trend strength. If the Auggies pop through the resistance and close above it for two consecutive weeks, they'll be well on their way to delivering D=35.40 before summer ends.
The failure a week ago to reach the 5606.50 rally target is not a sign of good health. Although the futures could get second wind and blow past this Hidden Pivot resistance in the days ahead, they should at least have reached it on the first try. It would have required only a very small additional push to get to the 'finish line', and there is no rationalizing bulls' laziness. Look for churn and a possible top from a level somewhat above the 5588.00 high recorded on June 20, or even above the 5606.50 target.
Microsoft apexed last week just 71 cents (0.1%) below a long-term target at 456.88 I'd billboarded here. It happened on Thursday, but on Friday the stock plunged to 446.41, most of it coming in the final 30 minutes of the session. This put the previous day's record high in sharper relief, increasing its potential importance. It also wiped out the entire week's gains, presumably creating a layer of urgent supply of a kind that this stock's handlers are not accustomed to coping with. Expect more backing and filling in the week ahead and a test of lows at 441.27 and 436.72 recorded on the way up during the last two weeks. _______ UPDATE (Jul 2): There was no backing and filling whatsoever. Instead, MSFT turned Friday's criminally rigged plunge into a v-shaped swoon powered by short-covering. The 456.88 target 'should' still contain bulls, albeit imprecisely, given the obviousness of the pattern. If it doesn't, don't count on 462.80, the 'D' target associated with the sucky marquee 'A' at 213.43, to do the job precisely either. An 'extension' target derived solely from the C-D leg lies at D=509.40, where A=309.45 on 9/29/23. p2=479.06 for that pattern, and don't think it would be impossibly cute for the final top to occur at 494.23, midway between p2 and D. That is a price point so nicely ensconced in our discomfort zone that no one on earth could be watching it.
Last week's thumb-wrestling match ended in a draw as bears failed to push the Auggies down to the 2281.00 target shown. The best they could muster was to diddle the secondary Hidden Pivot support at 2306.40 for nearly two days. The week ended with the futures mildly on the upswing, although a further push to the green line (x=2357.20) would trigger a 'mechanical' short. The opportunity looks second-rate, so I'll recommend watching from the sidelines. A bigger picture shows a nearly three-month consolidation with potential to 2520 or higher. Somewhat lower prices remain likely for now, though.
Sep Silver's slight dip last week beneath the 29.05 'd' target of the reverse pattern shown is sufficient for us to infer that the futures are likely to grind lower before they are fully corrected for another big leg up. It should launch within the next 2-3 weeks and reach 36. Please note, however, that an intervening pullback to p=26.67 (monthly continuous chart, A=11.64 on 3/31/20) would set up the juiciest 'mechanical' buying opportunity we've seen in a while.
The easy move through p=79.55 in mid-June strongly suggests the August contract is bound for at least D=86.66. We can hope nonetheless that p2=83.11, the secondary Hidden Pivot, slows crude's ascent; otherwise, pump prices, along with the price of nearly everything else, will receive a turboboost before summer is over. If there's a silver lining, the pattern is compelling enough to imply there's no great likelihood of a further push into the 90s.
