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.
[Two weeks ago, I made the seemingly outrageous prediction that Trump's tariff offensive would not cause a recession and that the stock market bear would soon be over. Shares were in a steep plunge at the time, and investors around the world seemed ready to hit the panic button that Sunday night. The S&Ps had last traded around 5300, but my technical runes said they would fall no lower than 4820, even with traders in the grip of fear. Lo, the SPX fell no lower than 4835 on Monday, then bounced a whopping 646 points. Although they've since given back some of the gains, they are still 447 points above the low and showing little inclination to test it. That could change, of course, and stocks could relapse with a vengeance. If so, it would likely put the U.S. and global economies on a path toward deep recession, or even a Second Great Depression. That is what I might have expected if the 4820 target hadn't looked so promising as a support. We shall see. In the meantime, I'll continue to run my original commentary (see below) until the stock market proves me wrong. It is either going to new highs by summer, or about to resume a historic crash. RA ] *** A word of advice if you’re looking for bankable information on the direction of the economy: tune out the mainstream media’s cavalcade of Trump-deranged bozos and focus on the 4820 target in the SPX chart above. Think of it as Trump’s lucky number, but also a very good place for these all-too-interesting times to find temporary equilibrium. That is my worst-case target for a bear market that many believe is only just getting started. As a die-hard permabear myself, I’ve been eagerly anticipating the Mother of All
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.
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.
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.
Last week's violent swings paused at the 389.29 midpoint Hidden Pivot shown in the inset. The shallow pullback from this resistance implies bulls had plenty of energy for a follow-through to the pattern's 'D' target at 410.78. If the stock pulls back to the green line from near the 395 'sweet spot', that would generate an appealing 'mechanical' buy signal. So would a pullback to the red line (p=389.29) once p2=400.04 has been touched. Your bid should be tied to a 382.12 stop-loss, but you could substitute naked-short puts for shares..
