Gold completed a shallow consolidation last week before launching toward the 2068.00 target we've been using as a minimum upside objective. If buyers plow through this Hidden Pivot, our next price objective would be 2133.10, calculated by sliding the point 'A' low of the reverse pattern down to an 1820.00 low recorded last November. That would produce a conventional ABCD pattern, but it would be sufficiently gnarly to make the resulting Hidden Pivot levels useful for trading.
The spike that capped the recent rally narrowly failed to surpass an 'external' peak at 24.05 recorded a month earlier. It was not all we might have hoped for. But there was more resistance than appeared, including a second, very sharp peak that caught bulls off guard before crushing them in a two-day cascade. Now, looking on the bright side, with gold promising to drag silver higher, we should expect this pullback to give way to an exuberant thrust that clears not just the prior peaks, but also a midpoint Hidden Pivot resistance at 24.02. Once the December contract is above them, we'll be able to trade 'em up as bulls cruise to at least p2=25.60.
The October 20 rally top at 35.36 failed to impulse above some peaks from mid-September, casting a shadow on the chart shown. This dour price action will likely have consigned GDXJ to a test of the midline of a channel that has contained this vehicle's ups and downs for the last six months. However, since my outlook for gold and silver is bullish, I expect the midline to hold and to support a bounce that breaks out of the channel. My minimum upside objective thereafter would be 42.09, the 'D' Hidden Pivot target of a reverse pattern flagged here earlier.
With the geopolitical cauldron boiling, crude's docility is hard to fathom. One theory has it that the heavy manipulation that has always characterized energy markets has conspired to suppress the price of crude so that war fears don't stampede the herd. All it would require to trigger a global war is for some Russia-armed enemy of America to take a potshot at one of the U.S. aircraft carriers stationed in the Middle East right now. My 117 rally target for December crude will remain viable in any case, but the futures will first need to overcome the drag created when they fell last week after failing to take out an 'external' peak at 89.60 from October 2. Most immediately, that would require a decisive move past the 86.33 midpoint Hidden Pivot of the pattern shown. ______ UPDATE (Oct 31, 9:16 p.m. EDT): All things considered, oil's price decline is quite impressive. However, it looks like those who have been manipulating it lower will run out of room at 79.94. the Hidden Pivot support shown in this chart.
With the Middle East war threatening to escalate on Friday, it's odd that sellers couldn't deliver a knockout punch. They spent the entire session running the futures up and down within a 20-point range, turning what should have been a rout into a merely moderate decline. Not only did they fail to bury the broad averages, bears couldn't even reach the first of two downside targets in the E-Mini S&P futures at 4100.00. The second lies at 4o68.50, and it seems likely to be reached by Tuesday if not sooner. We won't necessarily attempt bottom-fishing because corrective rallies have been pretty anemic lately. ______ UPDATE (Nov 1, 4:08 p.m.): Anemic price action has mutated into a full-blown short squeeze, investors either havinginginging grown bored with the pace of Israel's invasion of Gaza or completely forgotten about it. For now, use the 4310.50 target of this pattern as a minimum upside objective.
A 146.13 target is the most pessimistic I've identified to date, but in the interim we should use the 159.98 Hidden Pivot support shown in the chart as a minimum projection. An $8 rally to the green line (x=176.75) would likely be construed by many if not most investors as a bullish resurgence, but we should see it first as an opportunity to get short there 'mechanically'. Alternatively, we'll try bottom-fishing with call options if AAPL continues along its tortuous path lower.
The monthly chart shown offers an unorthodox view that should be held in mind as the dollar makes its way higher. Much higher. Last week I presented a weekly chart that went back to 2019 with a 124.72 target. This one stretches back to 2004 and has a somewhat less ambitious 'D' target at 119.37. I'll suggest sticking with the earlier version to get a precise handle on trend strength in the weeks ahead. Specifically, you should use its 112.16 midpoint resistance as a minimum upside projection for the next six to eight weeks. However, in the highly unlikely event of a vicious swoon to the green line of this monthly chart (x= 96.03) , you'll be able to recognize it for what it is: just a correction.
With gold in one of its steepest climbs in recent memory, the 2068.00 rally target billboarded in my last update looks like a lock-up. The December contract's midweek stab through p=1945.80 all but clinched this outcome, along with a likely test of May's $2129 record high. That would bring into play an even bigger, bullish pattern begun in November 2022 from 1711 and which targets 2241.90. These are the most ambitious targets I've broached in a year, but my high confidence is commensurate with the rally's steepness and the intimidating difficulty of climbing aboard.
Silver's rally last week wasn't quite as impressive as gold's, but it did manage to somewhat exceed the 23.70 target of the middling 'reverse pattern' we'd been using to stay on the right side of the trend. The next significant target is 27.18, a Hidden Pivot derived from a conventional pattern on the daily chart where A=20.61 on March 8. However, because we can assume silver will not ultimately lag far behind gold, I'll air a 28.15 target that is shown in the inset chart. Critical resistance, and possible confirmation of the pattern, will come at p=24.83, my minimum upside target.
It's going to take investors a while to get used to the idea that higher gold prices must eventually produce higher prices for mining stocks. However, their skittishness is understandable, given the pounding, false starts and countless disappointments gold bugs have endured since prices topped in 2011. This phase of the fledgling bull market targets 72.73 (monthly chart, A=19.52 in March 2020). However, for reasons of practicality and tradeability, we can use the daily chart shown (inset), with a 42.09 target and minimum upside over the near term to p=36.28.
