Careful! Feb Gold topped Friday at a double resistance of daily-chart degree. One of the impediments is shown in the chart: the 'd' target of a reverse pattern dating back to September. The second was a voodoo number that came even closer to nailing the actual high at 2794.80. Taken together, these 'hidden' obstacles made shorting the top relatively easy. The 19-point reaction move was worth as much as $7600 to any subscriber who took my 9:34 post in the chat room seriously enough to squeeze off a trade. Of course, if the futures push past this double-trouble spot effortlessly next week, it would be a very bullish sign, leaving gold on track for a move to at least 2865.90 (A= 2525.40 on Sep 4). ______ UPDATE (Jan 30, 1:08 p.m.): February Gold’s fist-pump this morning through the red line, a ‘midpoint Hidden Pivot resistance’, has cleared a path to $3018, 7% above the current $2822. (That equates to $3041, basis the April contract.) Bullion’s dramatic burst of strength is being attributed to various factors, including Trump’s threat of tariff restrictions and safe-haven demand, but that is like saying the moon has been affecting the tides. Far more likely is that gold has caught a whiff of Big Trouble ahead that we can only guess about. I am already on record as saying stocks have topped, even if Bitcoin has yet one or two more lunatic upthrusts in it to set the hook for the most egregious speculators. The Indoos and the S&Ps may notch marginal new highs as well, but they would occur in the context of a choppy top that does significantly exceed recent peaks.
GDXJ launched from the red line (p=46.27) with such gusto that there can be little doubt it will reach D=48.58, probably early in the week. The move actualized a 'mechanical' buy off a low that lay well above a textbook stop-loss at 45.50. If it gains momentum, we could see a test of the 51.03 peak recorded on December 11 sometime in February. Anything above 48.58 will put a 51.65 target in play. That is the secondary Hidden Pivot tied to A=42.51 on Sep 6. The midpoint HP of the pattern lies at 48.39, so expect discernible resistance there, too.
The March contract first signaled a move to d=32.38 more than a month ago, on December 20. It has been a brutal slog since, lacking the brio we've seen lately in gold. Even so, it's difficult to imagine the futures not getting there, probably early in the week. A decisive pop through the Hidden Pivot would mitigate the sluggish feel of the chart, setting silver up for a less labored push toward December 12's 33.33 peak, and thence to the towering external peak at 35.53 recorded on October 22.
There are smaller reverse patterns we could use to clock the latest down cycle, but we'll go with the biggest, since we've grown accustomed to 20-point swings in crude, the global carnival midway's featured attraction. The chart implies minimum downside to p=72.57, although lesser patterns would yield p supports at, respectively, 75.57 (Friday's low) and 72.84. All can be bottom-fished with a tight rABC trigger. Just to be on the record, I'll note that the D target of the big pattern is 64.36. We'll be better able to assess the odds of this Hidden Pivot being reached once we've seen how the futures interact with p=72.57.
The top of TLT's leap last week fell a crucial dime shy of an 'external' peak at 88.28, spelling possible trouble for the first turnaround attempt since November. With a so-so 'mechanical' buy in prospect when the pullback touches x=86.25, we'll give the recovery the benefit of the doubt. The picture would brighten if the move off x reaches p=87.61 within a day or two. That would shorten the odds of a further run-up to d=90.32, but a slightly higher would be needed to clear a second 'external' peak at 88.91 from 12/20. _______ UPDATE (Jan 27, 10:38 a.m.): TLT's big and probably phony leap this morning conspicuously failed to surpass any prior peaks. We'll leave our benchmark for the real McCoy at 88.91.
I still expect Bitcoin to notch one or two more record highs on the hourly chart, but they will likely be the dying gasp of the bull market that began in 2009. There is reason to doubt that the broad averages will be swept up in this fetid blast of flatulence. That would create a technical divergence of sorts, but we'll leave it to Microsoft, a peerless market bellwether, to help us gauge its significance. For now, the white-shoed crime syndicate that manipulates the stock for a living is doing its utmost to push MSFT above July's record 468.35. That's 5.5% north of Friday's close, a spread the stock is capable of covering in a mere week. However, it will require a short-covering panic to first punch through the layered peak at 456 that MSFT created in December. Realize that short covering is the main source of buying power in all bull markets. The cash that portfolio managers throw haphazardly at stocks helps keep them buoyant. However, only bears threatened with potentially ruinous margin calls can muster the kind of urgent buying that is capable of pushing the broad averages past heavy seams of supply. To make this happen, DaBoyz have always employed the same trick: pulling their bids overnight so that a stock falls low enough to exhaust sellers. With no supply weighing on the opening, the Masters of the Universe simply step aside, lending explosive power to even a smattering of buy orders entered just ahead of the bell. 300 Chickens The result is shown in the chart. Over the last two weeks, Microsoft has begun the day significantly higher than the previous day's close mp fewer than three times. Almost no stock changed hands in these gaps, and yet they accounted for $35, or nearly 100%, of
The stock's coy poke above the 434 high from January 6 was bullish, but the rally would need to continue above a second peak at 440.94 recorded ten days earlier to affirm the bullish case. Several profitable 'mechanical' buys have triggered at the green line, but the only one signaled so far at the red line was a loser, hinting that the uptrend, such as it is, has weakened. Watch for DaBoyz to pull out all the stops to distribute MSFT at relatively rich prices. They did it last week with two gap-up openings, and they will likely use the same strategy until it temporarily stops working.
The futures did everything we expected last week, rallying to within easy distance of a 2765.80 target after falling a few points beneath the correction target at 2678 I'd provided. They will face a mountain of resistance when trading resumes, since there is not just the 2761 peak from December 12 to contend with, but also some distributive layers of supply from the record high of October/November. If something out there is capable of spooking gold above all of this, perhaps we should be careful what we wish for.
I've used a 32.380 target for the March futures since before Christmas. Expect a tradable stall there, but if buyers blow past this Hidden Pivot resistance, my minimum projection will rise to 32.715 and thence to 36.285. My long-term projection for a bull-market top is 53.06. That target is tied to a crucial 'midpoint Hidden Pivot' resistance at 32.350 that has yet to be exceeded in this bull cycle. I'd need to see a print at 36.58 or two consecutive monthly closes above 32.35 to be confident that 53.06 will be reached. Concerning the bottom-fishing trade I'd advised, the low fell midway between the green line where we usually do this trade, and the red line (p=30.763), where the entry risk will always be higher. I did not establish a tracking position because no one mentioned the tout.
The rally stalled last week, but we'll give it the benefit of the doubt because it yielded a theoretically profitable 'mechanical' buy on Friday after falling to within a hair of the green line. The ensuing rally barely reached p=46.27, our first profit-taking level, but it was sufficient to fulfill the rule for a partial exit. Now, if GDXJ pokes into the 'sweet spot' midway between p and p2, you can use x=45.11 a second time to bottom-fish, stop 43.95. Otherwise, we can watch from the sidelines as bulls attempt to make their way to D=48.58.
