I've shifted to a bigger picture that aligns with gold's, where indecision rules. Bulls have been stymied so far by a midpoint Hidden Pivot at 49.043 that precisely contained the last big bounce. Now, they've got a running start to attempt once again to smash through. A success would put d=52.575 in play. There's little point in trying to predict the outcome, but if the futures pop through p and then return to the green line (x=47.276), we should be prepared to bottom-fish there aggressively with a small-pattern trigger. Alternatively, a breach of C=45.510 would be bearish, although not necessarily fatal. ______ UPDATE (Nov 10, 1:14 p.m. EST): The futures have broken out today, impaling p=49.043 with sufficient brio to get them to d=52.575 eventually. Be careful up there, since this Hidden Pivot resistance does not look like it will surrender quietly. There are significantly higher targets outstanding, so stay tuned for Sunday's updates.
GDXJ entered its third week in purgatory, unable to attract the buying power to wreck the corrective pattern shown. That would take a push above the pattern's point 'C' high at 97.76. Sellers evidently were equally spent after failing to reach the secondary Hidden Pivot support, p2=86.38. My hunch is that bulls eventually will prevail, but there's not much to entice unless you're a scalper. The turgid price action reflects similar indecisiveness in bullion futures, which have lacked direction since completing a 350-point selloff on October 22.
Sellers dragged Bitcoin kicking and screaming toward a 91,263 target that was first signaled a month ago. This was shortly after this vehicle topped at a record 126,200 on October 6. Although bull-market corrections often take a strong bounce from the secondary Hidden Pivot, in this case p2=99,997 produced only a modest bounce last week after it had been pounded for four days. That suggests we should attempt a 'mechanical' short at the red line, p=107,731. The textbook stop-loss would be at 114,554, but we can craft a much tighter stop with a 'camo' trigger if the opportunity arises. ______ UPDATE (Nov 14, 10:12 a.m.): In my zeal to conceal the top-secret coordinates yielding the target above, I somehow transposed one of them. The correct target is 91,358. Any lower would indicate 89,964, but you could bottom-fish either aggressively with a stop-loss as tight as 0.2%. At the moment, Bitcoin is enjoying a lunatic bounce precisely from the secondary Hidden Pivot (p2=94,344) of the pattern associated with D=89,964.
[ My friend Doug Behnfield, a wealth manager and senior vice president at Morgan Stanley in Boulder, has contributed many commentaries to Rick's Picks over the years. Below is the Q3 report he sent out to clients several weeks ago. Like many observers, he is troubled by the enormous concentration of investment capital in the AI space. Can the eventual payoff ever be big enough to justify the estimated $10 trillion that will flow into AI technology by 2030? Read why Doug thinks there are better places to park your money. With apologies to him, I have dispensed with his meticulous footnotes and several graphs to simplify typography. The Jetson's illustration was also my idea, based on his original headline, 'Thoughts on the Jetsons and Rope-a-Dope'. RA ] In late 1962, CBS introduced the Hanna-Barbera evening cartoon The Jetsons. It was inspired by their hit series The Flintstones, but set in the future. It lasted for only 24 weekly episodes, but it made an indelible impression on the Baby Boom Generation. Along with flying cars and Rosie the robotic maid, George Jetson worked two days a week, one hour per day (not remotely), and all he did was go in and push a button to start and stop a machine. (the Referential Unisonic Digital Indexer Machine, at Spacely Sprockets). I was reminded of The Jetsons when reading a Wall Street Journal article describing the rivalry between Mark Zuckerberg and Elon Musk in developing robots. In it, Elon Musk predicts that there will be “at least 10 billion humanoid robots in the world, remaking the idea of work and life” by 2040 (The Jetsons was set in 2062). Zuckerberg’s humanoid robotic aspirations are dependent on gathering data from the microphone and camera in his Artificial Intelligence (AI) Glasses. With them, he intends to
MSFT's double top is so obvious that we should be cautious about believing the party is over. My read is that the dirtballs who manipulate the stock for a living had no alternatives. Although they short-squeezed earnings news for all it was worth, they lacked the wattage and the daring to push above July's 555 peak. The subsequent relapse was so nasty that it will require some time to build a base capable of supporting a push to new record highs. So many bulls got sandbagged by last week's Whoopee Cushion ride that the retracement will probably take out the 492.37 low recorded early in September. Since the stock market and Microsoft will continue to stay roughly in synch, the foregoing implies that the bull market is due for a significant and possibly protracted correction. I have no interesting Hidden Pivot targets at the moment, but that shouldn't preclude our trading this feisty little monster between feints.
Bulls won last week's teeter-totter competition, but not by much. They held the line against sellers on Friday with a rally into the close that averted a fall to the red line (p=3932.60) after a theoretical sell signal was triggered. Now they will need to negate the bearish pattern by rallying above C=4059.90. If the effort fails, however, p would still be an enticing place to attempt bottom fishing with a tightly crafted 'camo' trigger. Price action there will also give us a reliable means of assessing trend strength, since a decisive breach of the 'hidden support' would imply that further slippage is likely. ________ UPDATE (Nov 6, 7:50 a.m. EST): Gold has been spasming tediously sideways for eight days, but it looks ready to push above the 4059.90 top of the range to a 4068.00 Hidden Pivot target (30m, A=3934.20 on 10/29). It will need to decisively exceed that resistance, however, to signal the possible resumption of the long-term bull market. A more critical, conventional resistance lies at 4175.00 in the form of a daunting series of peaks, the highest of which is 4175.00. Bottom line: bulls have plenty of work to do to get back on track. If they fail, my worst-case correction target would be 3802.60.
Silver is close to aborting a 'mechanical' sell signal that triggered last Tuesday with a rally back to the green line (x=47.96). If buyers can pop it above C=49.225, negating the pattern, it would be a constructive way to start the week. The first Hidden Pivot resistance they would encounter above it lies at 50.030, a minor 'D' target associated with the 45,510 low recorded on October 28. Short there only if you've caught a profitable piece of the approximately $1.75 ride north that remains between Friday's closing price and the target.
Last week's nasty chop barely recovered ground lost as the week began, when GDXJ's canny handlers orchestrated a $17 shakedown on Monday's opening. This was bullish, like all shakedowns, because its purpose was to scare widows and pensioners into selling their shares for relative bargain prices. The subsequent bounce triggered a 'mechanical' short when it reached the green line (x=93.97), but the flat price action that followed looked unpromising as a place to bet the 'don't' line. Stay tuned for updates as GDXJ gives us a clearer picture. You can do this by enabling notifications in your account dashboard and by checking the chat room regularly.
Friday's bounce from the red line (p=108,391) was faintly bullish within a cycle of weakness that has persisted for a month. It would take a push above 118,135 to clear a path to new record highs, albeit with no guarantees. More immediately, the number to beat is 112,207, a Hidden Pivot resistance associated with 118,135. A decisive move through it on first contact would ensure more upside to at least 115,171. Scalpers could get short there if they've profited on the way up. The foregoing could all be moot by the time you read this, since I am unable to determine whether Tradestation has been updating price data for this vehicle. It usually flows 24/7, but the most recent bar I have right now was recorded a day ago, on Saturday. The pattern I've used is such a good one, though, that I expect it to work out exactly as detailed above.
TLT continues to grind higher, perhaps to deny skeptics the inspiration they need to climb aboard early in this bull market. It is still in its adolescence, too early to predict which tectonic financial event(s) it is signaling. The trend flouts Trump's persistent efforts to cheapen the dollar, if not to say trash it. This is a paradox that I've explained here before, to wit: the president's bold leadership has been attracting hordes of T-Bond buyers from around the world, providing an offset to the fiscal and credit excesses Trump believes will lift the U.S. economy. Grotesquely inflated asset prices belie the fact that, for most Americans, the economy has slipped into a deep, intractable recession. For the lucky winners, a debt deflation and bear market in stocks awaits those whose net worth has soared mainly due to Fed easing. Regarding TLT, don't pass up an opportunity to buy it 'mechanically' on a pullback to the green line (x=89.85), stop 88.45. ______ UPDATE (Nov 7): A nasty, six-day selloff triggered the 'mechanical' buy I'd suggested at 89.85. The futures continued to fall but didn't stop out the position, since the downtrend went no further than 88.88. Maintain the 88.45 stop-loss for now and hope for a push above 90.66, since that's what it would take to put bulls back in charge. A decline that touches the stop would be the most bearish event we've seen in this vehicle since last April.
