The bullish pattern shown, with a 457.12 target, is unlikely to steer us wrong, given the precise, confirming pullback from p=383.41. It is ambivalent on the question whether D will be reached, however, so we'll accommodate simply by being prepared for that -- or anything else. My gut feeling is that the stock will need to correct further before that could happen, so we'll look initially for a 'mechanical' buying signal on a pullback to p=383.41. The by-the-book stop-loss would be at 358.84. By implication, any rally of 10-25 points should be regarded as an opportunity to get short.
Gold has repeatedly resolved double tops in favor of bulls for many years, but always differently. The current pair of peaks is tightly spaced, giving the impression of weighty distribution. The 2530.40 rally target on this continuous weekly chart is viable nonetheless, and there is no reason to presume it won't be reached. But that does not preclude a sharp pullback first to the red line (p2=2071.70). It makes a logical target if bulls are to be rebuked yet again for their steadfast belief in the quaint idea of gold's historical primacy as money. For now, let's draw our inferences from the lesser charts of August Gold, which currently provide an easy path down to 2300-2320. ______ UPDATE (June 7, 12:15 p.m.): Gold has in fact followed an all-too-'easy path' south, to a so-far low today of 2320.20. That is the upper threshold of the corrective range I'd forecast. However, I'd be surprised if the futures did not take out May 3's 2308.70 low and then diddle 2300 just for good measure.
Silver's continuous weekly chart is more encouraging as to whether an ambitious longtime rally target will be reached. The target, a Hidden Pivot, is 36.03, about 18% above, and the strong move in April past p=26.67 on first contact attests to the strong likelihood that more upside to D is coming. The ascent looks too steep, however, to continue without a punitive correction. Regardless of whether the expected pullback comes down to 'mechanical' buying territory near p=26.67, we'll stay focused on the lesser charts to be ready for the turn.
The easy, decisive pop through p on the first attempt implies not only that D=49.15 will be reached, but that last week's pullback to the red line offered an attractive opportunity to get long mechanically. Even so, further accumulation and a running start may be needed to supply the requisite thrust, so we should be prepared for more backing and filling between 43 and and 45 before GDXJ leaves the launching pad. There has been almost no mention of this vehicle in the chat room lately, but I will provide tradable guidance if it is requested. _______ UPDATE (June 7, 12:27 p.m.): Today's vicious plunge triggered a 'mechanical' buy signal when it touched the green line (x=42.20). This Hidden Pivot level is tied to the 49.15 target given above. However, there are no guarantees that the implied bounce from between here and C=39.88 will get any farther than p=44.52.
On the evidence shown, I'm unwilling to call this one, at least not yet. TLT tripped a theoretical 'buy' signal when it touched the green line (x= 91.88) two weeks ago, but the odds are not yet good that it can complete the implied trek to D=105.49. Long-term interest rates would be well below 4% if that were to happen, implying the U.S. would be in the throes of a recession deep enough to kill consumer inflation. That seems likely to occur at some point, but it would probably be sooner rather than later, since another powerful wave of inflation is already in the pipeline due to soaring shipping costs that are hitting now. Regardless, if TLT can push without a breather above the April 4 'external' peak at 92.76, that would shorten the odds that a big move is under way.
July Crude ended the week just above a low at the D=76.66 correction target shown in the chart. The pattern that produced the target is sufficiently delicate and precise to suggest that even a slight breach of D would be telegraphing further weakness. This would be a break for motorists and also help mitigate inflation, albeit probably not enough to quell some other powerful inflation inputs, including a dramatic rise in shipping costs. Slippage beneath D would likely send the July contract into the range 74-75 for yet more distribution.
Speaking of my fellow gurus, our switchboards have lit up to warn that something big is looming. Even the oddballs who think stocks are headed much higher seem to agree that a punitive correction is long overdue. And although each of us would like to believe that the arrival time of whatever dreadnought is coming will precisely match our individual forecasts, Friday's Kabuki drama on Wall Street drove home the reality that none of us stands a chance of being exactly right. What an extraordinary day it was -- far freakier, even, than we have come to expect on a Friday. As the Dow Industrials steamed higher, Nasdaq stocks were getting savaged. The high-fliers in particular suffered a memorable drubbing, unable to lure buyers for most of the day. These behemoths have been egregiously misnamed The Magnificent Seven, but there is nothing magnificent about them at all; they are just flying pigs, bloated with enough hydrogen to levitate a million Hindenburgs. A cynic would say the zeppelin fleet's smoking room is located in the Eccles Building. Jackpotters Numbed Call options went begging for bids on Friday as well, discouraging Rick's Picks subscribers from even thinking about the 'jackpot bets' we sometimes make when stocks look ripe for a suddden mood change. And then came the blitzkrieg! As the Dow rally went vertical, a thousand bogged-down stocks got caught in the vortex, rising like a spout to finish the day with miraculous, modest gains or little net change. The craziness was most intense in the final 30 minutes, demonstrating the remarkable agility of trade-desk lackeys who have mastered the tactic of rotating your hard-earned dollars from one flavor-of-the-day to the next. Repo Man Thwarted It was Microsoft, the world's most valuable company, that had led the way down. The software giant
Seven weeks after precisely achieving the 430.58 bull market target I'd aired in 2023, MSFT has yet to push more than slightly above it. My gut feeling is that buyers would have impaled the Hidden Pivot on first contact if they had the moxie to push the stock to D=452.35. For that reason, I expect a sharp pullback from these levels before bulls can try again. I doubt the selling will reach the green line (x=404.11) to set up a 'mechanical' buy, but I'll be looking for opportunity to develop at p=420.19. I don't plan to trade this one, but merely to observe it. The stop-loss would be at 409.47, with a goal of reaching p2=436.27, if not D.
The drubbing that gold received last week after having slightly exceeded the 2449 high from mid-April was a rude shock. It created a series of impulse legs on the hourly chart, even if it missed being impulsive on the daily chart by a mile. The most troubling aspect of May 20's false breakout is that the rally fell $34 shy of the 2588 target I'd identified earlier, a Hidden Pivot related to a chart of higher degree. This trend failure will have taken enough bulls by surprise to add the weight of their shock and disappointment to current selling. It points most immediately to a test of the 2285 low recorded on May 3, so let's make that our minimum downside objective for now. It would take a print all the way down at 2170.70 to generate a bearish impulse leg on this chart, but that is a prospect we needn't worry about at the moment.
Silver's chart offers more clarity and precise predictability than gold's. It could not be clearer that the July contract will fall to at least d=28.815 before it finds traction. That Hidden Pivot can be bottom-fished aggressively when it is reached, but the futures should be traded with a bearish bias in the meantime. That implies that a rally to the green line (x=31.76) should be treated as a great opportunity to get short, but also that a drop to p2=29.799 be bottom-fished as avidly as d. ______ UPDATE (May 28, 2:26 p.m. EDT): So much for clarity! If anything is clear, it is that Silver's moon shot today is so powerful that it could only be a rebuke to the scumbags who have suppressed its price for so long. They have papered the market to avoid having to supply quantities of physical that are even remotely commensurate with demand. It is a small market relative to gold -- about one-tenth the latter's size -- but days like today cannot but fill gold bugs' heads with visions of a runway bull market. The conspiracy against gold's rise is a more powerful alliance, but their task will have grown more difficult if silver has broken from its moorings. For what it's worth, July Silver triggered a 'mechanical 'short at x=31.76. But I am NOT recommending the trade for reasons that this update should have made clear. The signal looks quite promising, and so I'll be interested myself to see whether the rally subsides somewhat shy of stopping out the bearish reverse-pattern's 'c' high at 32.75.
