Silver ended its best week in recent memory at a level that appeared to exhaust the possibilities of a large, bullish pattern begun in October. It would be natural for the futures to pull back, or even to correct to as low as 23.23. That's the Hidden Pivot target of this bearish reverse pattern, which has played out since last December. The futures would have to fall to the green line (x=26.52) for the pattern to be officially in play, but we can still watch for signs of tiredness in the way patterns both bullish and bearish play out on the lesser charts. Easy moves through midpoint resistances will be the best indicator of the trend, which has been tortuously upward for more than a year. It followed a powerful A-B impulse leg in 2020 that projects to 36.03. Here's the chart, with a highly promising development from last week. _______ UPDATE (Apr 8, 1:28 p.m.): May Silver has overshot a major rally target at 27.54 by 65 cents, which is bullish. Accordingly, I have raised the 'c' high on the reverse pattern to 28.19, today's so-far high, in order to reset the correction/sell-signal tripwire at 27.10. The new p support, a potentially opportune spot for bottom-fishing, lies at 26.00. ______ UPDATE (Apr 11, 9:51 a.m.): A new high at 28.65 has raised the theoretical 'sell' trigger to 27.56. I am not explicitly recommending a short sale there, just creating a signal to tell us when May Silver may have entered a corrective cycle with the potential to bring it down as much as an additional $3.29.
Like bullion futures, this ETF for gold explorers ended the week in a place that should produce a corrective retracement. If it surprises by shredding the reverse pattern's d target at 42.10, our focus would shift to a conventional pattern that promises a further run-up to 48.55. This is the first time I've mentioned the target, but the pattern from which it is derived is strictly kosher, with a second-wind thrust to B=43.89 (4/14/23) that turned A-B too gnarly to be widely observed. That will always be a plus for us. Here's the chart, which, like May Silver's, delivered a quite encouraging thrust through a midpoint Hidden Pivot at p=39.51.
I warned here last week that if TLT couldn't hold above the 91.20 Hidden Pivot support shown in the chart, we'd better look out below. It now appears that the support will fail, sending this T-Bond proxy into a vast void that extends all the way down to last October's low near 82. If that happens, we'll see a corresponding spike in rates that approaches or matches the 5% peak in the Ten-Year recorded last October. This is yet one more reason why the mass psychosis that has driven stocks into a relentless vertical climb is about to succumb to reality.
Although my deflationist outlook has kept me bullish on the dollar for decades, the two charts shown in the inset suggest that the greenback's implied surge to punitive heights - for debtors -- lies well down the road. It also seems doubtful that this will occur simultaneously with a leap in rates on the 10-Year Note, since they could not likely exceed the 5% heights achieved last October without sending the global economy into a tailspin. More likely is that the dollar will strengthen with real rates falling. For now, though, expect DXY to continue scuddling sideways between 100 and 110.
May Crude didn't pull back nearly enough last week to fill the 'mechanical' bid I'd suggested. It still looks bound for an all-but-certain rendezvous with the 88.69 Hidden Pivot target shown. Although the rally stalled for a while precisely at the 78.85 midpoint resistance, once the futures finally got past it, there was no stopping or even slowing the ascent. A move to the target would exceed the 88.31 peak recorded in June 2022, creating a fresh impulse leg of monthly-chart degree. $100 crude, anyone? _______ UPDATE (April 6): The May contract shredded its way past p2=83.77, the secondary Hidden Pivot shown in this chart, all but guaranteeing the target will be reached. The stock market's heedless ascent as soaring energy prices threaten to kick inflation back into overdrive ranks right up there with the crazed exuberance of the summer of 1929.
There are no fewer than four bullish patterns at work in the chart shown, so I've settled on the one with the most ambitious rally target. It lies at 5399.75, and it is jumping the gun to assure you the futures will get there before they have even touched the midpoint Hidden Pivot (p=5331.38), it seems safe to assume that bulls are not likely to be thwarted. A moment's pause could be fatal to the psychotic energy that has impelled the broad averages heedlessly higher, even as 'bubble' warnings have begun to pop up even in the WSJ and at Bloomberg.com. As always, the ease with which buyers penetrate p the first time they encounter it will tell us all we need to know about trend strength. _______ UPDATE (April 2, 9:38 a.m.): Here's something we've seen only very rarely in the last 15 years, and not at all during the psychotic, suck-everyone-in phase of the bull market begun last October: a bullish pattern that aborted without having reached p, never mind D. The implications are of course bearish, at least for the near term. I take them seriously because MSFT never got more than a few pennies above the 430.58 high I've been saying since last January would mark the end of the bull market. We shall see.
The 'mechanical' buy that triggered when MSFT fell to the green line last Thursday was about as 'textbook' as they come, meaning it is all but certain to deliver a profit unless truly dreadful news greets stocks when they begin to trade Sunday evening. Acting on the signal by purchasing call options would have been a non-starter, however, since fully four days will have elapsed if the stock begins to move as early as Monday. That's why we should never purchase options just ahead of a long holiday weekend. Perhaps another opportunity will arise this week ahead of the stock's presumptive ascent to D=439.35. Stay tuned to the chat room and your email 'Notifications' to keep apprised. And, yes, this does mean my longstanding, ostensibly major target at 430.58 has been diminished by the certitude that a higher target of lesser degree will be reached. _______ UPDATE (Apr 2, 11:13 a.m.): Today's so-far moderate selloff has brought the stock down to the green line for the second 'mechanical' buy signal in three days. The first produced a one-level profit, but we'll be keenly interested to see whether this signal delivers as well. It would be unusual for so well-formed a pattern to fail to reach its D rally target -- in this case 439.35. _______ UPDATE (Feb 5, 9:48 a.m.): Microsoft has triggered a third 'mechanical' buy this morning since correctively bottoming at 412.79 three weeks ago. Ordinarily, the signal's usefulness degrades with each repetition, and so I am not suggesting that you jump on this 'sloppy thirds' opportunity. However, it will be interesting to see whether the stock fails to achieve a hat-trick of 'mechanical' winners. This would be rare for the stock, which has notched precious few lower lows over the last several years without having completed a
The 2306.40 rally target we've been using for nearly a month looks like a lock-up at this point. April Gold's ascent has been so urgent that there was only one 'mechanical' opportunity to buy a pullback on the daily chart. That occurred with a dip that barely brushed the red line, never mind fell to the green one. Friday's stab above p2=2228.30 was further evidence that a run-up to D has become all but unavoidable. Even so, we should pay close attention to price action near 2290.80, the target of a much larger pattern on the weekly chart. Although I expect the futures to get past it, the closely coincident location of the two targets implies that an important top could form at the 2300 level. Note: The equivalent D target for August is 2344.60, _______ UPDATE (Apr 5, 11:28 a.m.): The June contract is closing on a potentially VERY important target at 2356.90! Here's the chart.
Last week's tedious grind eked out only a minuscule gain, but that will have little bearing on the still-strong likelihood of the 27.34 target being reached. A pullback to the green line (x=23.47) would trigger a high-caliber 'mechanical' buy, but it seems unlikely that Mr. Market will gift us with such a succulent opportunity. There will always be opportunities to get long intraday, however, so you should stay close to the chat room and your email Notifications if this vehicle interests you. _______ UPDATE (Apr 3, 10:36 a.m.): Two powerful upthrusts have brought May Silver within easy distance of the 27.34 target. If it is easily penetrated, expect more upside to 27.55, a more daunting Hidden Pivot resistance (Daily, A= 21.24 on 3/8).
The steep rally since early March has alleviated the stinginess of the overall pattern, which remains bullish nonetheless. It projects to at least 42.10 and should be considered reliable for trading purposes. That is notwithstanding mid-February's dip into deep water in the weeks that followed the triggering in January of a 'mechanical' buy at the green line. My hunch is that GDXJ will ultimately push past 42.10, breaking free of a consolidation zone that will have persisted for two years.
