Gold served up a second consecutive week of slop, making it difficult to guess what's on the minds of the thieves who manipulate it for a living (legally and with the Guvmint's complicity, of course). However, enduring uptrends tend to produce relative weak countertrends, and that describes this one so far. It has twice penetrated to Hidden Pivot midpoint support at 2647.90, but without sending the futures down to the pattern's 2605.30 target. They could still get there, but bears might be drained of energy by then. Alternatively, a pop through C=2690.50 would signal a resumption of the long-term bull trend. Worst case: a two-day close beneath 2617.50, portending more slippage to as low as 2487.00 (daily chart, A= 2826.00 on 10-31-24).
Last week's slight penetration of Nov 19's external high at 32.03 was bullish, although not very. It generated a weak impulse leg on the daily chart that implies any retracement this week that holds above 30.095 would be corrective and therefore a 'buy'. A further push up to p=32.483 would certainly call for a tightly tightly tightly tightly stopped short, presumably with a 'camo' trigger fashioned from the 5- or 15-minute chart. My worst-case target is 29.160, a back-up-the-truck number for those of you who have been waiting since early November for a better buying opportunity (daily chart, a= 33.76 on 5-29-24).
Skittish about the stock market's manic climb? Consider moving some of your savings into T-bills, which are currently yielding around 4.25%. You could do worse. Some of my friends are reluctant to take e ven a little money off the table because 2024 was such an incredible year for them. One is a retired lawyer who racked up a nearly $500,000 gain in Nvidia. She sold enough shares to buy a condo in Palm Beach, but her portfolio is otherwise unchanged and showing a return of about 40% for the year. She and her financial advisor are confident her portfolio will do equally well next year. Both of my siblings had a similar experience, but they have since moved most of their nest eggs into Treasury bonds and bills. It has been an extraordinary year for them, and for millions of Baby Boomers who owned stocks, real estate or both. Who could blame them for thinking that the bull market begun in 2009 might have another year or two left in it? On the other hand, valuations are at their highest levels ever, and a real estate downturn seems all but certain because mortgage rates are stuck at levels too high to attract first-time buyers. And few would deny the stock market is out of its mind, a beast on steroids; we all sense this in our bones. Consider the way speculators have shrugged off ominous tariff news. Trump has threatened our two biggest trading partners, Mexico and Canada, with protectionist levies that would punish U.S. auto manufacturers in particular and cause grocery prices to surge anew. The President-elect also seems hell-bent on implementing immigration restrictions that would tighten the supply of workers, particularly for unskilled jobs. He's Bluffing, Right? Toward the end of the Roaring Twenties, when Congress was
Let's hope Musk and Ramaswamy have been paying close attention to David Stockman's ten-part series on how to cut the U.S. budget before America spends its way into bankruptcy. Stockman was Reagan's budget director in 1981-85 and eminently qualified to spell out the tough reforms needed to force the U.S. to live within its means. He is no fan of Trump, to put it mildly, but he sees the Musk/Ramaswamy 'DOGE' project as America's last chance to get spending under control. Musk famously asserted during the campaign that he could cut $2 trillion annually from a total federal budget of around $6 trillion. Although we've come to expect big things and even the impossible from Musk, in this case, even with the intrepid Ramaswamy aboard, DOGE may have bitten off more than it can chew. Ironically, it is Stockman's long, detailed list of cuts that makes Musk's goal seem farfetched if not impossible. Stockton admits that eliminating nearly every U.S. department and agency you can think of, and laying off more than half-a-million government employees at the outset, would scarcely dent deficit spending that's been pushing the national debt toward $40 trillion at a rate of more than $3 trillion per year. The list of 16 agencies Trump should axe as soon as he takes office in January includes the FBI, DEA, BATF, NHTSA, Legal Services Corp. and the Department of Education. Additionally, says Stockman, DOGE should shoot for 50% staff reductions in these fat cows: the SEC (2,250 workers, for savings of $360 million); FCC (750 workers, for savings of $120 million: FAA (22,500 workers, for savings of $3.6 billion); IRS (41,500 workers, for savings of $6.64 billion); National Labor Relations Board (800 workers, for savings of $130 million); Office of Personnel Management (1,250 staff, for savings of $314
The pattern shown has worked perfectly so far, signaling a winning short from the red line and a theoretically juicy payoff from 'mechanically' bottom-fishing at the green line (x=6000.44). That means it's equally likely to work for getting short at D=6109.00 with a tight stop. Shining a spotlight on the trade on my front page could slightly queer the pattern's voodoo magic, so I'd suggest using a reverse-pattern trigger of small degree (i.e., sub-5 minute) to execute the trade. Because the first contact with p=6042.63 on the way up did not impale this Hidden Pivot resistance, there can be no ironclad guarantee the target will be reached, although it seems likely.
Continue to use the 435.90 target given here last week as a minimum upside objective and an optimal place to get short. A rally to that 'reverse' Hidden Pivot resistance would not affect the textbook perfection of a head-and-shoulders pattern that has been under construction since January. The pattern seems almost too pretty to work, but even if it doesn't, I still expect 435.90 to provide an excellent opportunity to make money betting the 'don't' line. Use put options at the 432 strike with three to ten days left on them. Be sure to check the chat room and your email 'Notifications' for updated guidance, however, since it might be necessary to modify the trade to obtain the best possible odds. ________ UPDATE (Dec 5, 1:10 p.m. EST): MSFT gapped through the 435.90 pivot on an opening-bar short-squeeze, but I still doubt it's going much higher. There are two places you can look for a downturn, both of them voodoo numbers: 440.18 and 455.10. If the stock reaches the higher, it will trash the still-perfect head-and-shoulders pattern, but without negating the possibility of a major top forming well shy of the all-time high at 468.36 recorded in early July.
The selloff from the 108.07 high recorded on November 22 has exceeded any minimum downside target I could have projected at the outset. Also, the high fell a whopping 91 cents shy of my 108.98 upside objective, and that is another reason I've given this correction wide berth with the big pattern shown and its 'locked' point 'a' high. The chart implies the downtrend is bound for a minimum 104.91, the pattern's midpoint Hidden Pivot support. Expect a tradable reversal from there, but if it is short-lived, or if the support is decisively penetrated on first contact, it could signal an important tone change in the bull cycle begun in early October. Since gold has been moving higher with the dollar, we might expect bullion's uptrend to accelerate if the greenback continues to fall.
The December contract cheated us out of a profitable 'mechanical' buy at the green line when it erupted for a 60-point rally without having quite touched our 'launching pad' at x=2598.80. Price action is bullish but not quite bullish enough to make the bounce a shoo-in to achieve the pattern's 2770.70 target. We'll therefore begin the week without the usual confidence and clarity, so check for updates if there's any movement, since that cannot but shed light on the strength and resilience of the uptrend. My gut feeling is that it will achieve d=2770.70, but without making it look easy. _______ UPDATE (Dec 3, 3:58 p.m.): More sideways tedium this week has added nothing useful to an indecisive picture. I am proffering this chart nonetheless as a companion to the update moments ago of the Silver tout immediately below. Both need an upsurge through their respective midpoint Hidden Pivot resistances to signal the onset of a meaningful rally.
A bearish target at 28.445 target that has been forever in coming now looks highly likely to be reached. The reverse pattern with which it associated is sufficiently gnarly that you can bottom-fish there with a very tight stop-loss, preferably crafted with a 'camouflage' (i.e., small-pattern) trigger. Alternatively, the futures would signal an opportune 'mechanical' short on a rally to 31.880. That is a Hidden Pivot midpoint resistance associated with a=30.440 (10-8, 180-minute) _______ UPDATE (Dec 3, 4:09 p.m.): March Silver has tripped a theoretical buy signal with the potential to reach 34.870. The link is to a reverse pattern that I expect to work well for all purposes: buying, shorting, forecasting, determining trend strength. It is bullish that Silver has gotten traction, sort of, without having come down to the 28.455 target we were using to clock the correction. But the retest of the November 14 low should not have been necessary to jump-start Silver, and that will remain a concern until such time as the futures impale p=32.483, a key number for the near term.
With its 'locked' point 'a' low, the pattern shown looks reliable for our purposes, whether trading or forecasting. It is not a healthy sign that the rally off the 44.76 low recorded on November 14 failed on the first attempt to reach the red line, a midpoint Hidden Pivot at 49.17. Bulls could still pull it off, but if GDXJ dips below C=44.76, negating the pattern, that would be more than a mild discouragement. The weakness so far is especially dispiriting because of the power of the impulse leg that took GDXJ quickly from 46.71 to 55.58, a 20% move, in mid-October. _______ UPDATE (Dec 9, 9:17 a.m. EST): This morning's gap through p=49.17 has guaranteed that the rally will reach D=53.58, at least. Be prepared for a stall there.
