Bearishness on the U.S. dollar reached a shrill crescendo last week after the Saudis began accepting other currencies for oil. Some seem to think this will move the world away from the dollar as the global reserve standard, but I strongly disagree. The dollar's indispensability for propagating a $2 quadrillion derivatives shell game is far more crucial to its supreme status in the world's heavily financialized economy. Crude oil is certainly a large market, but it is puny in comparison to the nominal value of derivatives traded digitally around the world. The chart shows the dollar ensconced in the upper range of a wedge formation, An upside breakout without a cyclical correction down to the lower line would be very bullish, however illogical it might seem to dollar bears (aka 'inflationists'). When the breakout occurs, it will leave the punditry, eggheads and bloviators who would consign the dollar to ignominy with some serious explaining to do. Suck it up, dudes!
The September contract looks all but certain to reach the midpoint Hidden Pivot at 5587.75 shown in the chart (inset). The rally has been powered by relentless short-covering and gap-up squeezes on the opening bell, but I doubt it will punch through p effortlessly. There is always that chance, however, and if it does, then we should assume that D=6155.25 is in play. The target may look like it is miles above, but it is only a 12% move from Friday's close. The distance could be traversed in as little as 8-10 weeks, which, looking back to the summer of 1929, would warrant our being on high alert. Wall Street should be pretty stoked by then about Trump's impending return to the presidency, so it would be the perfect time for Mr. Market to pull the plug.
Energized by eight weeks of consolidation, MSFT has fist-pumped past a 430.58 target that had looked capable of stopping the bull in it tracks. It did, and quite precisely, but only for long enough to give bulls a running start on new record highs. They will nearly always be precisely targetable, and I've selected a conservative one for now to give us a confident handle on trend strength. Look for the stock to reach a minimum 452.35 this week, or 455.95 ii any higher. The latter number was calculated by sliding the point 'A' low down to a somewhat lower bottom a few bars to the left. Both numbers are shortable provided you use small-pattern triggers to cut the risk.
August gold finished the week with a second consecutive bottom at the 2304.40 'd' target of the reverse pattern shown. Equally encouraging was a reversal at week's end that left the futures sitting more than $40 above the lows. Someone in the chat room argued that gold's $430 run-up earlier this year needs and deserves more consolidation, and that may be so. However, we should be alert to the possibility that this newly resurgent bull market will not be so accommodating of investors who want more time and better prices to do their bargain hunting. Bull markets in their dynamic stage are characterized by nasty swoons and quick recoveries. In any event, our short-term bias should be bullish as the new week begins, and we should look for minor, uptrending ABCD patterns that reach or exceed their 'D' targets. Correspondingly, we'll also watch for corrective abcd patterns that surpass their midpoint Hidden Pivots. That is the most finely nuanced signal we have for flagging changes in larger trends.
The chart shows how July Silver replicated gold's reverse-pattern low last week. Although the actual bottom slightly exceeded the d=28.815 target, the subsequent bounce on Friday was strong enough to take the futures out of the danger zone. The move would become even more persuasive if the bounce can surpass 29.803, or better yet close above it. That is the midpoint resistance of a reverse pattern that began with a 29.525 low on June 5. The corresponding 'd' target of the pattern is 30.875, and we should expect it to be reached, at least, if p=29.803 is decisively penetrated.
GDXJ has failed to get loft since triggering a mechanical buy more than a week ago. We are not supposed to feel comfortable when this type of trade is signaled, since it usually implies that the vehicle's C-D leg has been reversed precipitously. That is true here, with a dip below the green line that came close enough to the 'C' low to make us anxious. My immediate outlook for bullion is bullish, however, and GDXJ should follow gold higher if the latter continues to rally as expected. It will not be out of the woods, though, until such time as it exceeds the 45.51 'external' high recorded on June 6.
Bolstered by inflation news that sent stocks into a tizzy, TLT made dramatic progress last week toward the 95.40 target shown. The durability of this Hidden Pivot target will test bulls' mettle, as will an 'external' peak at 95.02 recorded back in late March. Together, they will offer formidabe resistance to the uptrend, and their breach would signal a continuation of the rally. The next significant structural resistance above 95.02 lies at 96.40, and thence 98.67. There are voodoo number between each of these peaks where TLT can be shorted (or T-bond equivalents bought), so stay tuned to the chat room if you're looking for real-time guidance.
The wild, gratuitous price swings in the world's biggest commodity market could make energy consumers nostalgic for the 1950s, when U.S. policymakers, CIA hacks and political operatives firmly controlled Saudi Arabia, Kuwait, Iran and other key producers. I've kept oil on the touts list nonetheless, but only as a placeholder, since technical analysis no longer gives me a confident basis for forecasting the next big move. I don't mean to suggest that crude is untradable. Far from it, actually, since the intraday swings are so fraught with duplicity, greed and fear as to have become routinely predictable. Nudge me in the chat room if you have a trading idea you'd like vetted. But don't ask me where I think oil will be trading in a month or two, or at year's end, since there is really no way of knowing. My best guess for the very near-term is that the July contract is bound for 80.21, predicated on the June 11 low at 77.22 not being violated first.
Last week's rabid short-squeeze punctured bull-market targets I've been drum-rolling for months in Microsoft, Apple and QQQ. Moreover, the bullish look of the S&P 500 chart shown above is so clear and compelling that even the most stubborn permabears will need to make room for more upside to at least 6118, a nearly 13% rally from these levels. If the uptrend maintains its current pitch, it would hit the target just in time for Papa Bear to come bellowing from his lair at the 'correct' time of year -- i.e., when autumn leaves start to fall. The long-term charts allow three other scenarios that should not be ruled out. The first would be for the bull market to flame out here and now, with the S&Ps lying just a split hair from the pattern's 'secondary Hidden Pivot resistance' at 5461. I would rate this scenario a 40% possibility. More likely is a continuation to 6118, and then a major selloff. This is based, as are all Hidden Pivot forecasts, on price action at the red line, a 'midpoint' Hidden Pivot at 4804 that got shredded back in December. If a midpoint resistance is easily exceeded the first time it's touched, that's usually a sign that the target itself -- in this case 6118 -- will eventually be achieved. However, as you can see in the chart, the move through the red line was gradual rather than dramatic. This implies that although a further run-up to 6118 is likely, it is not a lead-pipe cinch. Second Wind, and Then... Given the pattern's clarity, it is difficult to imagine that the S&Ps will quickly push past 6118 when they get there. There will almost certainly be a tradeable pullback, and the odds are about 60% that it will be the beginning of
It's hard not to grow impatient with MSFT's tiresome slog toward the 456.88 target shown in the chart. The stock has spent most of 2024 diddling the secondary Hidden Pivot (p2) at 420, but it seems likely to get there eventually. The 430.58 target of a lesser pattern seemed to work well initially as a possible bull-market top, since the stock hasn't exceeded it by more than a couple of dollars after first hitting it in mid-March. But neither has it given up much ground since, a fact that attests to the confidence the stock's sponsors have that higher prices are coming.
