The chart shown provides little basis for determining with confidence whether long-term rates have peaked. We'll know better once we've seen the downtrend that began a week ago from 4.81% interact with midpoint Hidden Pivot support at 4.24% (p, shown as a red line). It would take a decisive penetration of the line on first contact to imply not only that Ten-Year rates have put in an important high near 5%, but that they are headed under 4%, possibly to as low as 3.67%, in 2025. If so, it is likely the U.S. economy will be deep in recession by that time.
GDXJ's punitive reversal last week following a promising rally failed by two ticks to trigger a theoretical sell signal. It will likely happen in the next few days, however, sending this gold-miner ETF down to at least 48.25, the midpoint Hidden Pivot support. As always, a decisive breach of the support on first contact would imply more slippage down to as low as the pattern's 'd' target -- in this case, 43.66. That is unlikely, but we'll be better able to assess the odds once we've seen sellers interact with p.
Trump promised everything but a cure for cancer during last Thursday's press conference, and there was no doubting his sincerity or his commitment to helping to shape a better world. Can he do it? One thinks of Teddy Roosevelt, who possessed seemingly limitless energy and zeal for taking on big projects, including building a national park system and the Panama Canal. Trump has big ideas too, and by all evidence the diligence to see them through. It was therefore disappointing that the stock market failed to show much feel-good energy on Friday. Chalk it up to Wall Street's cynicism toward politicians with big ideas other than large tax cuts. Investors, of course, will always be more concerned about Fed monetary policy. This suggests that Trump's successes, if they are going to have a major impact on the economy, will need to align themselves with the central bank's purposely beige and often murky agenda. For the present, however, any wonk, talking head or left-tilting economist is unlikely to 'get' Trump. Will the mainstream media, the political left, the academy, and a popular culture shaped by babbling ideologues like George Clooney, Jimmy Fallon, and Whoopi Goldberg eventually come around? it is encouraging that Meta's Zuckerberg was the first celebrity from the business world to kiss Trump's ring/ass. Although Zuck's $440 million gift to local election boards indisputably stuffed enough ballot boxes to swing the 2020 election to Biden, it was just business. He has demonstrated that he will sleep with anybody, including Trump, if the payoff is big enough. Facebook shares went vertical after Zuckerberg's White House visit shortly after the election, presumably because Wall Street sensed the company's karma was coming into alignment with Trump's America. The same could be said of Tesla's shares, as trust and friendship between Musk and
A 3040.90 rally target proffered here earlier remains viable, although we should be prepared for a possible stall at 2927.40, a 'secondary' Hidden Pivot. If buyers fist-pump their way through it, that would firm the case for a follow-through to at least 3040.90. The target might not work precisely because of the pattern's murky origins in a clutter of possible starting points. It is good enough for government work, however, and has kept us on the right side of the trend even when bullion was getting slammed by the white-shoe hoodlums who run the show. The ascent to 3040.90 could be relatively steep, since the breakout two weeks ago blew the cover of central banks and others who had been quietly accumulating gold after it stalled in November and traded in a range for several months.
GDXJ remains an odds-on bet to reach the 54.92 Hidden Pivot target shown. This was all but ensured when bulls gapped through the midpoint Hidden Pivot (p) at 48.39 on January 30. An additional sign of strength is that there have been no selloffs on the daily chart to enable a 'mechanical' buy at either x (the green line) or p (the red line). Only true believers would be on board at this point, since the steepness of the rally has left doubters choking on dust. The 54.92 target should be regarded as a minimum objective, since using the lower point 'A' available at 40.26 (August 5) yields an alternative projection to 57.17. The pattern has a 'secondary' Hidden Pivot at 53.34 where you should be prepared for at least slight resistance and perhaps even a tradable pullback. Long-term investors should consider covered-writes there.
Unlike AAPL, Microsoft's weakness cannot be attributed to unforced errors, or even to the prospect of recession. The stock has simply leveled off after a spectacular run-up in the first half of 2024. There isn't much to support it just below, however, and that's why it could fall hard if just one engine sputters out. I'd be inclined to try bottom-fishing at 393.19, an interesting voodoo number, in any case, but with a very tight stop loss created with a small 'reverse pattern'. If this magic level were to give way, the next stop would likely be around 375, where a cluster of obscure supports lies.
Get the forecast for Microsoft right and you cannot go far wrong guessing where the stock market is headed next. This has been an article of faith at Rick's Picks for years, and it has served us well. The chart shows MSFT either moving in lock-step with the Dow Industrials, or sometimes leading the Indoos with pullbacks and upthrusts that were relatively more pronounced and energetic. In July, however, after notching a record high at 468, Microsoft shares began a gentle decline that so far has gone unmatched by the Indoos. The latter corrected moderately for a couple of months, then pushed back up to the highs, where prices have hovered stubbornly since the beginning of the year. Based on the chart comparison above, I assumed until recently that MSFT was about to lead stocks lower. Now I'm not so sure. Suppose Microsoft shares are simply taking a breather while the broad averages continue higher. This possibility was suggested to me in the Rick's Picks chat room the other day by a subscriber who goes by the handle Formula432. An Ozarks-based financial advisor who specializes in high-net-worth clients, he manages their portfolios aggressively for yield, often with covered writes that have been astutely timed. "Where should our focus be now?" he asked. "I don't think MSFT has the relevance it once did. The rotation is real, growth is breaking, and value is going to be in leadership IMO, if only on a relative basis." Hemlock Cocktail, Anyone? I had to agree. Why should the stock market require Microsoft's leadership if there are other companies with greater growth potential? As long as the software giant can continue to pile up mountainous revenues without spectacular growth, it will remain a safe "hold" for portfolio managers. As much could be said of some
TLT has taken three big leaps since bottoming in mid-January, but only one of them exceeded an 'external' peak. Still more dispiriting is that the last sputtered out almost precisely at an upward correction target, well shy of an important 'external' high at 90.99 recorded on December 17. The rally appears to have been a garden-variety correction in an ongoing bear market, although we'll give bulls the benefit of the doubt until such time as the pullback starts exceeding prior lows. The rally corresponds to a drop in Ten Year interest rates that appears to have bottomed synchronously near a Hidden Pivot support at 4.43%. The downward move in rates began in mid-January from 4.81%.
Rates on the Ten-Year Note have fallen to 4.41% since peaking in mid-January at 4.81%. The low was slightly beneath my target at 4.43%, an overshoot that mildly implies rates will continue lower. However, Friday's bounce to 4.51% was significant enough to suggest the downtrend may have ended. I've given bulls the benefit of the don't in TLT, which is equivalent to saying interest-rate bears -- i.e., those expecting lower rates -- deserve the same benefit of the doubt. However, if this bounce should exceed the 4.60% peak from February 2, that would be a reason to infer that rates bottomed with the recent low.
Our favorite little wack-a-doodle spent the week out on the ledge, unable to decide whether to splatter the sidewalk or leap up into the old wazoo of impatient bears. Any forthcoming decision could be moot, since I've got an outstanding rally target at 116,807 that could pull Bitcoin out of a funk any time things start looking ugly. Even so, I've reversed the polarity of my recent outlook with a chart that favors a corrective slide to at least 91,119, or 87,293 if any lower. This is mildly speculative, since BTCUSD never even tested the midpoint Hidden Pivot support at 94,946, much less penetrate it. If penetration happens decisively over the weekend or on Monday, consider the corrective scenario a done deal. Regardless, you could attempt to bottom-fish at the red line, provided you've got the 'camouflage' chops to cut the entry risk down to small change.
