Like bullion futures, this ETF for gold explorers ended the week in a place that should produce a corrective retracement. If it surprises by shredding the reverse pattern's d target at 42.10, our focus would shift to a conventional pattern that promises a further run-up to 48.55. This is the first time I've mentioned the target, but the pattern from which it is derived is strictly kosher, with a second-wind thrust to B=43.89 (4/14/23) that turned A-B too gnarly to be widely observed. That will always be a plus for us. Here's the chart, which, like May Silver's, delivered a quite encouraging thrust through a midpoint Hidden Pivot at p=39.51.
I warned here last week that if TLT couldn't hold above the 91.20 Hidden Pivot support shown in the chart, we'd better look out below. It now appears that the support will fail, sending this T-Bond proxy into a vast void that extends all the way down to last October's low near 82. If that happens, we'll see a corresponding spike in rates that approaches or matches the 5% peak in the Ten-Year recorded last October. This is yet one more reason why the mass psychosis that has driven stocks into a relentless vertical climb is about to succumb to reality.
[Many readers of these weekly commentaries may not be aware that the focus of Rick's Picks each day is on timely trading ideas. Below is chat room banter for a typical 'freaky Friday'. The discussion includes several trades that were posted ahead of actionable opportunities in a few stocks, including McDonald's, Tesla and Amazon. All the links are live, most of them displaying charts with the ABCD patterns we use to trade. Some display two key pieces of the pattern: Hidden Pivot midpoints (p) and targets (D). For some of you, the jargon might take a little getting used to. However, trade instructions are usually phrased so that even beginners can follow them. There is a separate chat room called the Coffee House for off-topic conversations where 'anything goes'. IF you'd like to sample Rick's Picks, click here for a free two-week trial subscription. RA ] Microsoft's Hat-Trick 8:55 Rick: MSFT setting up for a hat-trick of mechanical winners -- or will it be a rare failure? 09:00 Formula382: Looks like a trampoline Rick. Ya need that energy to get the bouncy bounce. 09:52 Rick: I just sent out a tout update for MSFT that offers a perspective on the bounce. 10:03 Formula382: Anyone in here have any idea how nat gas sits in the dumpster while the pipelines have been quite good to own for example, KMI, OKE, KYN, FCG. I own them all, but that was based on the predication that "surely nat gas has to go up", which it has not! 10:07 Spartacus: McDonald's... A trouper 10:14 Rick: Here's my MickeyD prognosis 10:22 Spartacus: Now Short NVDA and TSLA using Apr 12 puts 10:23 Spartacus: MCD Thanks Rick I think I will cover off of that chart 10:23 Ronbl: Gold is obviously going to go up but
Although my deflationist outlook has kept me bullish on the dollar for decades, the two charts shown in the inset suggest that the greenback's implied surge to punitive heights - for debtors -- lies well down the road. It also seems doubtful that this will occur simultaneously with a leap in rates on the 10-Year Note, since they could not likely exceed the 5% heights achieved last October without sending the global economy into a tailspin. More likely is that the dollar will strengthen with real rates falling. For now, though, expect DXY to continue scuddling sideways between 100 and 110.
May Crude didn't pull back nearly enough last week to fill the 'mechanical' bid I'd suggested. It still looks bound for an all-but-certain rendezvous with the 88.69 Hidden Pivot target shown. Although the rally stalled for a while precisely at the 78.85 midpoint resistance, once the futures finally got past it, there was no stopping or even slowing the ascent. A move to the target would exceed the 88.31 peak recorded in June 2022, creating a fresh impulse leg of monthly-chart degree. $100 crude, anyone? _______ UPDATE (April 6): The May contract shredded its way past p2=83.77, the secondary Hidden Pivot shown in this chart, all but guaranteeing the target will be reached. The stock market's heedless ascent as soaring energy prices threaten to kick inflation back into overdrive ranks right up there with the crazed exuberance of the summer of 1929.
There are no fewer than four bullish patterns at work in the chart shown, so I've settled on the one with the most ambitious rally target. It lies at 5399.75, and it is jumping the gun to assure you the futures will get there before they have even touched the midpoint Hidden Pivot (p=5331.38), it seems safe to assume that bulls are not likely to be thwarted. A moment's pause could be fatal to the psychotic energy that has impelled the broad averages heedlessly higher, even as 'bubble' warnings have begun to pop up even in the WSJ and at Bloomberg.com. As always, the ease with which buyers penetrate p the first time they encounter it will tell us all we need to know about trend strength. _______ UPDATE (April 2, 9:38 a.m.): Here's something we've seen only very rarely in the last 15 years, and not at all during the psychotic, suck-everyone-in phase of the bull market begun last October: a bullish pattern that aborted without having reached p, never mind D. The implications are of course bearish, at least for the near term. I take them seriously because MSFT never got more than a few pennies above the 430.58 high I've been saying since last January would mark the end of the bull market. We shall see.
The 'mechanical' buy that triggered when MSFT fell to the green line last Thursday was about as 'textbook' as they come, meaning it is all but certain to deliver a profit unless truly dreadful news greets stocks when they begin to trade Sunday evening. Acting on the signal by purchasing call options would have been a non-starter, however, since fully four days will have elapsed if the stock begins to move as early as Monday. That's why we should never purchase options just ahead of a long holiday weekend. Perhaps another opportunity will arise this week ahead of the stock's presumptive ascent to D=439.35. Stay tuned to the chat room and your email 'Notifications' to keep apprised. And, yes, this does mean my longstanding, ostensibly major target at 430.58 has been diminished by the certitude that a higher target of lesser degree will be reached. _______ UPDATE (Apr 2, 11:13 a.m.): Today's so-far moderate selloff has brought the stock down to the green line for the second 'mechanical' buy signal in three days. The first produced a one-level profit, but we'll be keenly interested to see whether this signal delivers as well. It would be unusual for so well-formed a pattern to fail to reach its D rally target -- in this case 439.35. _______ UPDATE (Feb 5, 9:48 a.m.): Microsoft has triggered a third 'mechanical' buy this morning since correctively bottoming at 412.79 three weeks ago. Ordinarily, the signal's usefulness degrades with each repetition, and so I am not suggesting that you jump on this 'sloppy thirds' opportunity. However, it will be interesting to see whether the stock fails to achieve a hat-trick of 'mechanical' winners. This would be rare for the stock, which has notched precious few lower lows over the last several years without having completed a
The 2306.40 rally target we've been using for nearly a month looks like a lock-up at this point. April Gold's ascent has been so urgent that there was only one 'mechanical' opportunity to buy a pullback on the daily chart. That occurred with a dip that barely brushed the red line, never mind fell to the green one. Friday's stab above p2=2228.30 was further evidence that a run-up to D has become all but unavoidable. Even so, we should pay close attention to price action near 2290.80, the target of a much larger pattern on the weekly chart. Although I expect the futures to get past it, the closely coincident location of the two targets implies that an important top could form at the 2300 level. Note: The equivalent D target for August is 2344.60, _______ UPDATE (Apr 5, 11:28 a.m.): The June contract is closing on a potentially VERY important target at 2356.90! Here's the chart.
Last week's tedious grind eked out only a minuscule gain, but that will have little bearing on the still-strong likelihood of the 27.34 target being reached. A pullback to the green line (x=23.47) would trigger a high-caliber 'mechanical' buy, but it seems unlikely that Mr. Market will gift us with such a succulent opportunity. There will always be opportunities to get long intraday, however, so you should stay close to the chat room and your email Notifications if this vehicle interests you. _______ UPDATE (Apr 3, 10:36 a.m.): Two powerful upthrusts have brought May Silver within easy distance of the 27.34 target. If it is easily penetrated, expect more upside to 27.55, a more daunting Hidden Pivot resistance (Daily, A= 21.24 on 3/8).
The steep rally since early March has alleviated the stinginess of the overall pattern, which remains bullish nonetheless. It projects to at least 42.10 and should be considered reliable for trading purposes. That is notwithstanding mid-February's dip into deep water in the weeks that followed the triggering in January of a 'mechanical' buy at the green line. My hunch is that GDXJ will ultimately push past 42.10, breaking free of a consolidation zone that will have persisted for two years.
