The Morning Line

A Holiday Note

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I am on holiday for a short while, far from Florida’s disabling seasonal heat and enjoying what so far has been the coolest, foggiest summer anyone who lives in San Francisco can remember. This is a busman’s holiday, since I am updating the actionable ‘touts’ on this page 24/7 and have been fully engaged in the chat room as always, providing timely ideas whenever unusual opportunities arise and answering all questions related to trading. I am also continuing to put out actionable guidance at GoldenMeadow.eu.

However, in this space, instead of the usual weekly commentary and graphics, I am presenting a changing selection of paintings by Geoffrey Leckie, my college roommate during our third year at the University of Virginia. His canvases are beautiful and extraordinary (above: Stacking Hay, a scene from Connemara, Ireland), and they can speak for themselves. If you want to know more about the artist, click here.

Expect ‘Something Big’

Concerning the stock market, I’ve come to expect unusual craziness every time I take an extended holiday. Although my hunch until recently was that the nuttiness would take the form of a melt-up, last week’s weakness, especially in Bitcoin, has caused me to reconsider. Although Trump’s accomplishments have driven the bull market to new heights, the feel-good energy they created may be spent. For that reason, I have lowered the odds of a thousand-point rally in the S&Ps to 50-50. Correspondingly, I will be more cautious at these heights, since the bear market that’s coming will be at least as destructive to the economy as the 1929 Crash.

Rick's Picks for Tuesday
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$MSFT – Microsoft (Last:506.69)

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$BTCUSD – Bitcoin (Last:108,651)

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$GDXJ – Junior Gold Miner ETF (Last:80.05)

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$ESU25 – Sep E-Mini S&Ps (Last:6472.75)

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$GCV25 – October Gold (Last:3487.20)

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SIU25 – Sep Silver (Last:41.071)

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The reverse pattern shown stops short of greenlighting a rally into the void, although it says that a move to at least d=39.865 is practically certain.  Move the point ‘A’ to a visually more obvious place, one low to the left, and it projects a higher ‘D’ target at 40.605.  I am not skeptical that it will be reached, but I’ll be curious to see how such an obvious pattern screws with bulls’ heads. Our short-term trading bias will remain bullish in any case, but I’d suggest negotiating your entries at p or d pivots of rABC patterns on the hourly chart or less. —______ UPDATE (Aug 31, 1:54 p.m.): Silver lurched on Friday to within inches of the 40.605 target flagged above. This Hidden Pivot resistance is all but certain to show stopping power, presumably tradable and possibly precise, but let’s wait and see how buyers actually interact with it before we reassess the strength of the bull trend. ________ UPDATE (Sep 2, 1:42 p.m.): Sliding ‘A’ down to 32.100 (May 15) yields a new minimum objective at p2= 42.138, or D=44.090 if any higher.

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$TLT – Lehman Bond ETF (Last:87.05)


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