TLT's tortuous descent has depleted whatever energy may have been imparted to the trend by last autumn's impulse leg. Under the circumstances, we shouldn't count too heavily on the downside target at 85.94 to provide a precise turning point for bottom-fishing. We can still do the trade with a camouflage trigger that will risk only small change, but let's also allow for the possibility that this erstwhile cinder block has finally carved out a bottom. Odds of this would shorten if the still youthful rally surpasses April 12's 90.95 peak without a pullback on the daily chart. _______ UPDATE (May 10): Bulls showed a little life last week when they popped above an 'external' peak at 90.95 from April 12. This created an impulse leg of daily-chart degree, shortening the odds that an important bottom is in. Now let's see if buyers can complete the small ABCD pattern shown to its D target, or even exceed it. That would be the most bullish sign we've seen in this vehicle since last autumn.
The bounce begun last week from 4963 promises to set up the juiciest shorting opportunity we've seen in this vehicle since last July. The rally has come almost precisely from the sweet spot of the rABC pattern shown, implying that if it touches the green line, a 'mechanical' short from there has a better chance of achieving D=4777.50 than getting stopped out above C=5333.50. The pattern has been useful so far, having correctly signaled the drop that occurred after a theoretical 'conventional' short was triggered on the initial fall through the green line. The new trade is recommended only to subscribers who are comfortable with 'camouflage' triggers that can cut the entry risk by as much as 95%. In this case, the implied 139-point stop loss carries theoretical risk of nearly $7,000 per contract.
MSFT blew past the 404.83 midpoint 'hidden' resistance of the pattern show before settling back, penetrating it with sufficient force to imply that the rally is likely to achieve the D target at 421.63. That would still leave the stock somewhat shy of a 430.58 target that was first aired in 2023 and which has held precisely for more than a month. We should be prepared for a marginal new high, since that would set the kind of hook that would trap bulls and bears alike as the latter scrambled for cover. We'll be ready to exploit any such 'fooler' if it happens.
The 2488.90 target shown has a good chance of being reached, but there is no reassurance this will happen without an intervening, potentially severe, correction. The future would become an appealing 'mechanical' buy on a pullback to the red line (p=2114.80), and an even more compelling one at, heaven forbid, x=1927.70. What are the odds it will turn out that bad? It's not worth worrying about at the moment, since a reverse pattern on the weekly chart suggests a pullback would not even reach the red line -- would in all likelihood go no lower than 2170.20 (a=2159.00 on 5/5). There is even a chance of perhaps 40% that last week's low at 2304.60 (basis June) will turn out to have been the correction low, since it coincides with p of the same reverse pattern. For a clearer perspective on the larger pattern, here's a continuous monthly chart with a cleaner point 'A' low and a 2514.60 target that corresponds to the June's 2488.90. _______ UPDATE (Apr 30, 3:26 p.m.): With today's breakdown, the June contract has signaled more downside to at least p2=2280.00, but possibly to D=2251.90. The ability of either of these Hidden Pivot supports to resist the selling will give us a better idea concerning how the bigger-picture Hidden Pivot supports identified above will play out. I will continue to track gold and silver very closely, since chat-room interest has been high.
July Silver's weekly chart allows room for a 34% rally to 36.96. In order to extrapolate a comparable move in gold, we need the help of an extremely gnarly pattern on the continuous monthly chart that projects a 28% rally to 2995.00 (A= 681.00 on 10/31/08, B=2063 on 8/31/20). More immediately, July Silver's correction from the 30.19 high recorded on April 12 appears bound for a minimum 25.90. (This would imply that gold's correction has further to go.) The provenance of this target is shown in the thumbnail chart. The decisive downside breach of the rABC pattern's midpoint pivot (28.04) implies not only that D=25.90 will be reached, but that an intervening rally to x=29.12 would offer a tempting opportunity to get short 'mechanically'.
Although the downtrend's stall at 40.24 suggests the midpoint support might hold, my bias is bearish due to a silver chart that suggests bullion's correction has further to go. That implies sellers will breach p, headed to at least p2=38.00, or possibly to d=35.77. That is as bad as I could see, as the chart suggests, although it is not theoretically the worst case, which would be 31.27 (on the daily chart, use reverse a=43.89 on 4/13/23). The good news is that the associated p at 37.99 would offer another potential turnaround spot where we could attempt to bottom-fish aggressively with risk under very tight control. There is also the possibility that p=40,24 will hold and the GDXJ, along with gold and silver futures, will break out to new highs. For that to happen after so fleeting a shallow a correction would be very bullish.
So much for the extravagantly bullish speculation that I allowed in the last few touts and in a recent commentary. This vehicle continues to look like hell, and so we'll revert to the still unachieved downside target at 80.84 as a minimum objective. An upthrust of 4.44 points would be reason to open our imaginations to the possibility of a bullish reversal, and it would shift our trading bias to bullish. However, until such time as that happens, there is no reason to think that the powerful rally in Q3 was other than a nasty tease.
Although 2024's steep rally from $69 failed just shy of an important Hidden Pivot target at 88.54 (see inset), I expect a second-wind push to get there, surpassing the key external peak at 88.31 recorded in June 2022. That would create an impulse leg of weekly-chart degree sufficiently powerful to push crude to $100, a psychologically terrifying level in a world where inflation has stubbornly refused to cool off. I am bullish on crude in part because the recent high occurred in too obvious a place -- i.e., slightly below the D target of a pattern that virtually every trader would have observed, and less than a dollar below the June 2022 peak. This doubly obvious resistance' begs to be tested, and so it shall be. _______ UPDATE (Apr 28): The 88.54 rally target is still my minimum upside objective for the near term, but here's why the futures may have to come down to 80.39 first. The equivalent numbers for the June contract, respectively, are 88.31 and 80.03.
The stock's steepening fall last week put more distance between it and the all-time high a month ago at 430.82. That was just 24 cents from a longstanding target I'd said could cap the bull market begun in 2009. Perhaps it has, although I'd like to see MSFT fall at least 30%, to $300, before I consider the prediction fulfilled. Odds of this will shorten if the new week begins with just slight weakness. Anything exceeding 397.21 to the downside would breach three (!) external lows on the daily chart, creating a powerful impulse leg with devastating potential.
The previous tout suggested the dollar could range-trade for a long time between 100 and 110. However, if it merely pushes above the 107.99 'external' peak shown in the chart, that would command our attention and respect. It would also be something to fear, since a resurgent dollar would put the global economy back on a path to the deflationary bust I've predicted for many years. A rally piercing the 107.99 resistance would be all but certain to hit p=109.66, providing a test of the most important resistance the Dollar Index has faced in years.
