Brian Catalucci

A chatroom subscriber that goes by LukeDog requested a chart on Bitcoin. Any investment instrument capable of moving up or down 50-100% in such a short period of time is what I consider a psycho trade. That is- you'd have to be psychotic to want to trade this. With only 6 months of history I don't see anything other than 4455 d target pain in Bitcoin's future. If bitcoin can muster up the strength to take out the 12,075 C that would certainly change my outlook.

As a recovering Gold bug I have great sympathy for what die-hard bitcoin fans are about to experience. Years and years of grinding lower with the occasional wicked spikes up that bear markets are known for. Don't get me wrong-- I'm with the minarchists (e.g. Libertarians) and anarcho-capitalists in my excitement for crypto-currencies and their ability to transact anonymously not to mention their portability allowing you to move your entire net worth across national boundaries with a click of a mouse button. But with the crypto-mania having its blow-off top along with the retail public buying bitcoin it's clear the top is in for now and it's time to move onto the next big thing. So what about the original alternate currency- Gold? And more importantly the leveraged gold investment play- the HUI Gold Bugs Index? The good news is I believe the major low is in. Why do I think that? Take a look at the attached long term chart where we missed our clear d target. Without giving away too much of Rick's proprietary system one thing I like about this chart is the short and unintuitive B-C leg and then the subsequent interactions with P, P2 and d. The bad news is that we are still not ready for prime-time. The inset chart shows a possible P2 target of 155.77 which coincidentally happens to be near the low made in Nov-Dec 2016.  Taking out this low by a few dollars should be enough to freak everyone out that the bottom will fall out. Experienced pivoteers won't be afraid to buy this low. When the next leg up in gold takes us to $2500 and higher we will look back at this coming low in gold stocks as the buy of a lifetime.

The 10 year treasury hit 3% today and 2 year treasuries haven't been this high since back in 2008.  Is the 5,000 year low in rates behind us? Let's just say I don't think we'll see these lows again in my lifetime. If you are considering selling your house this could be your last chance as once the bonds start to collapse rates can double very quickly. The DOW had a light volume day but it did refresh its bullish impulse leg on the hourly.  According to the SEC there is over $3 trillion sitting in money market funds. You can be sure this money will be waiting to jump in when the markets end their consolidation and decides to make its next move.

On a rather ho-hum day buyers were able to refresh the bullish impulse leg by taking out the 24,977 March 21 peak. Zooming into the hourly the P 24,989.89 was tagged on this clear pattern using a one-off 'A'. As we are still in "consolidation" mode I expect more of the same mundane activity for a bit while longer although I wouldn't blame you for wanting to get long using a mechanical buy at 24,853.7.

The Euro/USD looks to have made a temporary low and should bounce a bit here. We don't normally discuss currency pairs and the Forex market at Rick's Picks but it's important to understand what's happening globally to understand what will happen domestically. With the constant bashing of the Fed compared to what's going on in Europe the U.S. Fed looks like the Rock of Gibraltar. When you buy a U.S. Bond you are buying a bond representing all 50 states. Can you imagine buying a California Treasury Bond or a Florida Treasury Bond all with different yields? That's exactly how the Euro was set up, with each European member having its own bond instead of a unified bond market like we have here in the U.S. This is the Euro's fatal flaw and this is why the German Bund is trading at 200 basis points lower than the equivalent U.S. treasury, because German Bund investors think they are going to get Deutsche Marks when the Euro finally collapses. Once the Euro/USD bounce to the trendline resistance concludes (could take a few months to play out) it's easy to see it dropping into the abyss below the critical 1.16 area and all hell breaking loose in Europe. Not only is this going to fuel the flight to U.S. equities but also catapult the U.S. dollar much higher. How high could the dollar go? The 1985 highs are not outside the realm of possibilities.

Earlier this year finding a video card was nearly impossible. The markup on used video cards on eBay was double the new price and all video cards were backordered indefinitely. I've voiced my frustration many times in the chatroom about this situation due to the bitcoin miners and at the same time I had been keeping an eye on Nvidia's stock price as they were the primary beneficiary of this crypto-mania. As they say during a gold rush you make your money selling shovels and NVidia has sold a lot of shovels. As the bitcoin mania has subsided I noticed I started getting alerts a few weeks ago from my favorite hardware retailer B&H Photo that the various video cards I had been monitoring were back in stock. I checked today and things appear back to normal where dozens of different video cards in all price ranges were available. Looking closer at the NVDA chart we got within 17 cents of a long term target of $260.67. So far the d target has stopped this rampaging bull. If the crypto-mania decides to take a multi-year long break I just can't see how NVDA can keep this ballistic rise. Stay tuned in the chatroom for ways to get short this stock by zooming in on lesser timeframes.

The DOW remains in a broad trading channel currently ranging between 28,000 on the top and as low as 18,000 on the bottom side. Consider bonds are 10 to 1 in size compared to equities globally.  Just a small amount of money coming out of bonds will blow the stock market through the roof.  How can the stock market rise with rising interest rates? Remember, interest rates always rise in a bull market and drop in a bear market.  Interest rates have even been taken into the negative just to support a bear market. So we could certainly see rising interest rates and rising equity markets together in the coming years. The talking heads are going to talk this market down by claiming rising rates are bad for the stock market. This will set up the consolidation period we need to base before we lift off as shorts pile on and will need to cover thus providing the fuel needed to take this market to the next level.  This bull market will not end until the retail/public have jumped in and so far we have no sign of that. A dollar rally is still in play so we could have what appears to be a flat equity market but foreigners will see the DOW rally in their currency. A stronger dollar will attract foreign capital into the U.S. markets and foreigners will not be as confused by rising rates as investors in the U.S. will be from television propaganda. This bull market will not end until DOW 40k and possibly higher.

 I've been saying for quite some time now that gold is not yet ready to take off. There are still too many gold bugs clinging on for hope after all these years and not until the last one has thrown the towel in will this gold bull market resume. What will make the last gold bug throw the towel in? Imagine the media generated hysteria if gold were to breach the psychological sub-$1000 mark. The front page of Time Magazine would declare gold dead. Interestingly this sub $1000 target happens to be neatly sandwiched between two weekly P2's.  I'm guessing if we were lucky enough to get such a move down that it will happen by the end of this year and it will be a back up the truck opportunity.  Only taking out $1434 to the upside would negate this downside target. Either way we are not yet ready for prime time.

Altaba may interest some of you river boat gamblers out there. Altaba is what's left of the former remnants of Yahoo and now acts only as a holding company. Altaba owns a significant stake in Alibaba (BABA) and Yahoo Japan. If Altaba sold all it's assets according to https://www.altaba.com/ they are currently trading at a 26% discount to NAV. Without getting into the nitty gritty details as to why this NAV gap exists let's just say it has to do with uncertainty surrounding how taxes will be treated on the sale of these underlying assets.  BABA's weekly chart looks to be moving higher and this should pull AABA with it. UBS analyst Eric Sheridan issued a Buy rating in February and a $98 price target. If I were employed by UBS my target would be $100. After all who would take me seriously if I had a price target of $99.60?