Rick’s Picks

T-Bonds and stocks came down so hard today that I now give my ‘outrageously bullish scenario’ (see above) no better than a 50% chance of surviving. Putting aside gold’s globally unnerving price surge, June T-Bond futures bulldozed a path down to as low as 100^12. If that were to happen, the implied rise in interest rates would be sufficient to tip the U.S. and global economies into deepest recession. A reported $7.5 trillion in Treasury debt needs to be refinanced over the next three years, with much of it due in 2025. It is therefore a particularly bad time for the Masters of the Universe to lose control of long-term rates. Beleaguered consumers will struggle even harder, and an already tottering commercial real estate market will finally give up the ghost. Residential real estate is about to deflate as well, putting a potentially economically rejuvenating refinancing cycle so far out of reach that Baby Boomers might not see another in their lifetime. Trump will get the blame, and deservedly so. Usually, economic cycles of boom and bust are much bigger than the presidency, but in this case, if stocks continue to fall, Trump will surely have been the catalyst. _______ UPDATE (April 25): Last week's rally left the futures a hair shy of an important Hidden Pivot midpoint resistance at 116^14.  A decisive move through it would not announce that the bear market is over, but it would quietly suggest an important turn may be nigh.  It would also imply the futures are on their way to 121^11, a Hidden Pivot that would leave the June contract just short of a breakout. The pattern will not be comfy-cozy for seasoned Pivoters, but I am using it nonetheless, in part because of its obscurity. (Always keep in mind our rule concerning

The futures spent the entire week fraternizing with three of four Hidden Pivot levels of the pattern shown. It's peculiar that the bounce from p and p2 missed their respective levels by a tick or two, but there's no reason to think the action at d=5156.75 will be any different, especially since it coincides with the too-obvious low' at 5146,75 recorded on April 10.  A Mini-Cooperful of clowns is likely to converge there when it is closely approached, so don't bet too heavily on a precise turn, even if a reversal from near there is likely.

There are idiosyncratic reasons for selecting the reverse pattern shown, but its main purpose is to bring visual clarity to the 'mechanical' buy signal that would trigger if MSFT touches the green line (x=362.44), which it almost certainly will.  I was unable to drag the 'a' low into the picture, but if you want to replicate the chart, it lies at 385.58 (8/5/24).  There's plenty of potential here, although I would find a way around the textbook stop-loss at 344.78. A 'camo' trigger fashioned from the 5-minute chart would allow you to test the water without risking more than relative pocket change.

You can use the chart to judge for yourself the strength of gold’s uptrend as it progresses. The move is extraordinarily powerful, to be sure, but that doesn’t mean the rally couldn’t reverse sharply at any time with no warning. We’ve been using a 3533.90 target for the last 600 or so points, but are the odds still compelling that gold will get there? Here’s how to read the chart so that you can determine this for yourself. It shows four possible scenarios, ranked from strongest to weakest. All began with Friday’s 57.80-point reversal off a record 3371.90. That triggered a theoretical sell signal at the green line (3314.10), the first such signal in two months. The implication is that the futures will now fall to at least 3256.30, the ‘midpoint Hidden Pivot (p), enabling at least a partial profit. However, if the June contract doesn’t quite get there, and instead blasts off for new record highs, that would strongly imply 3533 will be reached, and quickly. A somewhat less bullish outcome (2) would be a strong bounce to new highs from the red line (p). That would follow the rule that powerful trends produce corrective ABCDs that do not reach their ‘D’ targets, but instead reverse from the midpoint pivot. Alternatively, if gold penetrates p the first time sellers make contact with it, that would increase the odds that D=3140.70 will be reached. And finally, if the downtrend were to crash ‘d’, that would raise the possibility that gold has made an important high at 3371.90 and is unlikely to reach 3533. I am enthusiastically recommending this do-it-yourself exercise to anyone who is interested in learning how the Hidden Pivot Method works and applying it to your own analysis. _______ UPDATE: (Apr 21, 9:21 a.m.): The blast-off scenario detailed

The reverse pattern shown, with a 35.425 rally target, is as gnarly as they come, but May Silver's forceful move through p=31.485 justified stretching for the highest target possible.  Recall that in even in lousy patterns, price action at p is still usually a reliable indicator of trend strength. Please note that using the more obvious 'a' low at 29.405 yields a 'd' target at 33.635, so be alert to a possible stall or even a shortt-term top there.

Friday's swoon tripped a theoretical sell signal at 63.68 that implies GDXJ will fall to at least p=61.55 in search of traction. Thereupon, and as always, a decisive breach of the midpoint support on first contact would imply more slippage is likely -- in this case to p2 (59.23) or even d (56.91). As the current gold tout implies, however, numerous other outcomes are possible, the most bearish of which would be a decisive penetration of p on first contact. Regardless, this Hidden Pivot can be bottom-fished by scalperss with a tightly constructed 'camo' trigger. _______ UPDATE Apr 21, 11:12 a.m. EDT):  So obsessively attentive was I to a recent, hair-trigger sell signal in Comex Gold and this vehicle that I didn't think to mention the 72.23 rally target advertised here in the previous tout. It should underlie any forecasts, bullish or bearish, and must always be considered regardless of contrary warning signs.

The Dollar Index has broken down with last week's penetration of a key low at 99.58 that was recorded in July 2023. Expect more weakness down to the green line (x=96.03), at least, before the greenback can turn around. A dip to the line would trigger a 'mechanical' buy predicated on a climactic run-up to the 119.37 target.  That seems farfetched at the moment, but there is nothing in the chart to suggest the long-term uptrend is over. At the green line, the correction will amount to about 16% from the September 2022 high at 114.78. _______ UPDATE (Apr 21, 4:15 p.m. EDT): Today's penetration of a 98.04 midpoint Hidden Pivot support was not decisive, but any more weakness will clear a path down to D=95.79 of this pattern.  As things stand, a rally to the green line (x=99.16) already would trigger an enticing 'mechanical' short that would take a stop-loss at 100.29.

Despite the hellacious dive over the last ten days, TLT is on a double buy signal. The more important of the two is shown in the weekly chart (inset). An 88.47 bid would require a stop-loss at 84.88, just beneath the pattern's point 'c' low. You can see how close the low came to stopping out the position, but it held nonetheless -- by 12 cents. T-Bonds were bound to turn around sooner or later, and the chart says this would be a logical place for it to happen.  Odds that a major low is in place would shorten if this so-far modest bounce can push past D=88.39 of this minor pattern. _______ UPDATE (Apr 17): The tout above sniffed out a strong bounce, but not quite strong enough to lift TLT from the danger zone. That would require a thrust exceeding the 88.91 'external' peak shown in this chart. My hunch is that bulls lack the gusto for this task, but we'll give them the benefit of the doubt when trading gets under way after a long Easter holiday weekend. _______ UPDATE (Apr 21, 4:25 p.m.): Today's carnage clarified a picture that shows an easy path down to 74.38. If this comes to pass, T-Bond futures could fall to as low as 100^12 by mid-summer.

Although the futures have rallied nearly 700 points from last Monday's Hidden Pivot low, their failure to surpass the small external peak shown in the inset was timid behavior. It also set up a theoretical 'mechanical' short at 5406.25 (stop 5529.00) that we'll ignore. Instead, let's give bulls the benefit of the doubt for now, meaning we should expect a thrust above the 5528.75 recovery high shortly.  Alternatively, a relapse could send the futures down to as low as d=5038.75 in search of traction (60m, a=5322.00 on 4/4). You could bottom-fish there aggressively with a stop-loss as tight as 2-3 points.