The futures have exceeded an ostensibly solid Hidden Pivot target on the weekly chart at 5220.00 by a relatively whopping 13 points (A=2773.00 on 10/14/22). Although this is curious, it is also bullish in theory. Even so, I will use a bearish reverse pattern for this week's analysis, since I suspect the rocket rallies in MSFT, NFLX and some other erstwhile world-beaters are spent, having achieved equally clear targets without exceeding them. It "feels" like a good time for a top, even if bitcoin's wilding spree looks primed for a further run-up to 80,602, a target introduced last week in the chat room. Concerning the E-Mini S&Ps, a sell signal was triggered when the futures touched the green line (x=5194.50) last Thursday. It implies the futures will fall to at least p=5055.50 0n and possibly to 4777.50 before the presumptive correction ends. That would amount to a mere 10.6% drop -- hardly a bear market. Regardless, our trading bias has shifted to bearish for now, subject to cautious observation of upward abcd corrections. If they exceed their d targets, even in charts of small degree, that would warn that the futures are more likely to take out C=5333.50 than fall to p-5055.50.
The pattern shown projects a rally to at least 439.35. That would torpedo an argument I've been making since January -- i.e., that MSFT would make a bull-market top at exactly 430.58, and that the stock's subsequent fall would take the stock market and the global economy with it. I haven't given up on the possibility that my magic number at 430.58 will ultimately come close to having nailed the bull's last gasp, but the shorter-term pattern shown is just too compelling to think D will not be achieved. It has produced three winning 'mechanical' buys at the green line already and will continue to favor bulls unless a swoon in the next few days takes out C=412.79. Stay tuned.
Although prayer can't hurt, I doubt that it can push June Gold past the 2356.90 target shown any time soon. With the futures peaking just $7 from this daunting Hidden Pivot on Friday, a correction is due soon. We should be prepared for a nasty one, too, since it has taken the June contract more than four years to get there. Even so, we should open our minds to the satisfying possibility that buyers will blow past D with ease. If that happens, accompanied by voracious, insatiable buying, our focus could shift hopefully toward $3000, gold bugs' next dream number. In the meantime, we can use this reverse pattern, with a tentative, worst-case pullback target at 1991.10, to exploit the trend confidently. We'll adjust everything upward if a new high occurs. _______ UPDATE (Apr 8, 12:54 a.m. EDT): Although the June futures have receded from this morning's 2372.50 peak, the $18 overshoot of so clear a target is significant and at least mildly bullish. When a big-pattern target has been exceeded, we usually look at the target of a smaller 'extension' pattern as an alternative. In this case, the lesser pattern's D target at 2367.50 has also been hit -- and somewhat exceeded -- implying gold should correct for perhaps 2-3 days. Here's the chart. And if it doesn't? Ordinarily, I would say June Gold's overshoot of $2372 is quite bullish. But I am all-too-conscious of the fact that subscribers are counting on me to avoid getting crushed if and when the pond scum that Spartacus refers to as 'Mr Slammy' makes his all-but-inevitable appearance. Greatly complicating things is Mr Market's propensity to fuck as many of us as possible, as often as He can. That could mean He continues to push the precious metals complex higher without rest, so that
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
