On the evidence shown, I'm unwilling to call this one, at least not yet. TLT tripped a theoretical 'buy' signal when it touched the green line (x= 91.88) two weeks ago, but the odds are not yet good that it can complete the implied trek to D=105.49. Long-term interest rates would be well below 4% if that were to happen, implying the U.S. would be in the throes of a recession deep enough to kill consumer inflation. That seems likely to occur at some point, but it would probably be sooner rather than later, since another powerful wave of inflation is already in the pipeline due to soaring shipping costs that are hitting now. Regardless, if TLT can push without a breather above the April 4 'external' peak at 92.76, that would shorten the odds that a big move is under way.
July Crude ended the week just above a low at the D=76.66 correction target shown in the chart. The pattern that produced the target is sufficiently delicate and precise to suggest that even a slight breach of D would be telegraphing further weakness. This would be a break for motorists and also help mitigate inflation, albeit probably not enough to quell some other powerful inflation inputs, including a dramatic rise in shipping costs. Slippage beneath D would likely send the July contract into the range 74-75 for yet more distribution.
Seven weeks after precisely achieving the 430.58 bull market target I'd aired in 2023, MSFT has yet to push more than slightly above it. My gut feeling is that buyers would have impaled the Hidden Pivot on first contact if they had the moxie to push the stock to D=452.35. For that reason, I expect a sharp pullback from these levels before bulls can try again. I doubt the selling will reach the green line (x=404.11) to set up a 'mechanical' buy, but I'll be looking for opportunity to develop at p=420.19. I don't plan to trade this one, but merely to observe it. The stop-loss would be at 409.47, with a goal of reaching p2=436.27, if not D.
The drubbing that gold received last week after having slightly exceeded the 2449 high from mid-April was a rude shock. It created a series of impulse legs on the hourly chart, even if it missed being impulsive on the daily chart by a mile. The most troubling aspect of May 20's false breakout is that the rally fell $34 shy of the 2588 target I'd identified earlier, a Hidden Pivot related to a chart of higher degree. This trend failure will have taken enough bulls by surprise to add the weight of their shock and disappointment to current selling. It points most immediately to a test of the 2285 low recorded on May 3, so let's make that our minimum downside objective for now. It would take a print all the way down at 2170.70 to generate a bearish impulse leg on this chart, but that is a prospect we needn't worry about at the moment.
Silver's chart offers more clarity and precise predictability than gold's. It could not be clearer that the July contract will fall to at least d=28.815 before it finds traction. That Hidden Pivot can be bottom-fished aggressively when it is reached, but the futures should be traded with a bearish bias in the meantime. That implies that a rally to the green line (x=31.76) should be treated as a great opportunity to get short, but also that a drop to p2=29.799 be bottom-fished as avidly as d. ______ UPDATE (May 28, 2:26 p.m. EDT): So much for clarity! If anything is clear, it is that Silver's moon shot today is so powerful that it could only be a rebuke to the scumbags who have suppressed its price for so long. They have papered the market to avoid having to supply quantities of physical that are even remotely commensurate with demand. It is a small market relative to gold -- about one-tenth the latter's size -- but days like today cannot but fill gold bugs' heads with visions of a runway bull market. The conspiracy against gold's rise is a more powerful alliance, but their task will have grown more difficult if silver has broken from its moorings. For what it's worth, July Silver triggered a 'mechanical 'short at x=31.76. But I am NOT recommending the trade for reasons that this update should have made clear. The signal looks quite promising, and so I'll be interested myself to see whether the rally subsides somewhat shy of stopping out the bearish reverse-pattern's 'c' high at 32.75.
Although last week's high at 47.25 fell well shy of the 49.02 Hidden Pivot target I'd identified, the chart shows more promise and potential than that of gold itself. GDXJ became a theoretical 'mechanical' buy when it touched the red line (p=44.52) Thursday on the way down, but I'd suggest waiting for the correction to hit x=42.20 before attempting to bottom-fish. FYI, the stop-loss for the red-line 'mechanical' buy that has already triggered would be at 42.97, but I am not recommending this trade because I expect this junior-miner proxy to trade lower.
Although a swoon to the green line (x=5108) would set up an appealing opportunity to bottom-fish there 'mechanically', I now doubt that the implied bounce would reach D=5542. More likely is that it would fail at p=5253 or lower, creating a secondary top that would still be seductive enough to trap bulls and bears alike (the latter via a short squeeze). There is another visually appealing possibility that rates equal mention: a feint next week to p2=5397, as suggested here earlier. I will continue to monitor the lesser charts diligently for signs of one outcome or the other. If the swoon is coming soon, it will likely be signaled by the futures' failure to achieve 'D' rally targets of minor degree, and to overshoot minor 'd' corrective targets.
The gap opening above the green line last Wednesday triggered a theoretical 'buy' signal on the daily chart. It was the third such signal this year, but because it is coming from a lower corrective low, odds are better that the low, 87.34 (4/25), will endure. Adding to the incipiently bullish picture, the week's summit exceeded the highest 'd' target that could have been projected using an rABC pattern on this chart. It's a long way to p=96.06, where price action could help us handicap the odds of D=104.78 being reached, but that Hidden Pivot target can serve as our minimum upside objective for now
The move past p=5253.00 was accomplished with such ease that further upside to at least p2=5397.75 should not be doubted. There appears to be sufficient power, actually, to reach D=5542.50, but we'll be paying particularly close attention to signs of a downturn from the lower number, since getting there would represent the marginal breakout that has the unique power to trap all players badly at the top. Meanwhile, a pullback on the lesser charts could provide an opportunity to get aboard belatedly, or to augment an existing position, with relatively little risk.
The 430.58 target first broached here in 2023 has shown remarkable pluck, but it seems fated to give way, if perhaps only marginally, because of last week's poke above a challenging 421.63 Hidden Pivot resistance derived from a lesser pattern. There is no logical rationale for a strong burst higher right now, but we cannot rule it out because the stock market remains in the grip of mass psychosis. We'll remain on high alert nonetheless, ready to exploit a head-fake that could provide exceptional leverage for a precisely timed purchase of put options. On the weekly chart, using A=366.50 from 1/5 yields a 452.35 target that looks well suited to that purpose.
