The chart says last week's high at 93.14 is about as high as crude prices are going to rise over the near term. There is just a little more room to the upside, with a theoretical 'cap' at 94.04. Does this portend an end shortly to the Mideast war and an easing of energy prices? If the chart is right, it's difficult to imagine another outcome. However, I'll allow for one alternative scenario nonetheless: a head-fake to 99.34. That's a midpoint HP resistance culled from a continuous weekly chart, and although its resistance will not likely work out precisely to-the-penny, it is good enough for government work. If, heaven forbid, the futures were to break out above that number, it would open up a path to as high as 115.48, or even 131.63
Rates on the Ten-Year Note broke out on Friday to a multiyear high at 4.81%, presumably on their way up to the 5.09% target shown in the chart. The good news is that that's probably as high as they are likely to rise over the next few months. The bad news is that only a severe economic downturn could conceivably keep them from rising any further. The wild card would be a global outbreak of peace and good feelings amidst growing despair that Trump and Iran's mullahs can come to terms. Hormuz should become less of a concern in any case, since ample quantities of oil appear to be getting to buyers despite Iran's blockade. Also, it's possible that the increasingly stringent economic sanctions will finally bring Iran around.
Thursday's poke marginally above the green line was a signal to short this gas-bag -- although not too aggressively, as I warned in the chat room. I'll suggest paper-trading this opportunity just for the informational value, unless you are comfortable use a 'camouflage' trigger to drastically reduce entry risk. (The tactic is described in detail in the free source I've made available to legacy subscribers and new ones who have signed up for a full year.) Concerning the trading signal, we should expect it to bring the futures back down to the red line (p=7637.75), at least, where we would typically take a partial profit. Permabears looking for an October 'surprise' should take note, however, that the worst this pattern foresees over the near term is a 3.6% fall to d=7437,00
The futures turned lower without quite reaching the d target at 4819.30 shown in the inset. It remains viable and should be achieved within the next 4-7 trading days, provided the reversal from 4015 in early July is going to get legs. However, if the next move takes gold down to the green line (x=4216.50), although that would trigger a buy signal, we might expect only a one-level move back up to p=4417.50 before gold turns lower again.
Silver's steady March toward the 74.30 target turned into a struggle three weeks ago and is likely to resolve itself in either of two ways. It could kick off the holiday-shortened week with renewed vigor; or, alternatively, sink to the green line, x=60.275. The latter, like the one described immediately above for December gold, would trigger a theoretical buy signal (stop 55.59), but with the prospect of a weak follow-through only to the red line (p=64.95) before the next downturn.
Unlike Comex Gold's chart, GDXJ's is unambiguously bullish. Although the rally stalled last week at a voodoo resistance, it was not before buyers had succeeded in pushing past an external peak at 131.36 recorded on May 11. This refreshed the bullish impulsiveness of the daily chart, shortening the odds of a further push to the 159.17 target. Meanwhile, a pullback to the green line (x=107.37), however unlikely, would trigger a salacious buy signal, stop 89.82.
Although rates on the Ten Year Note ended the week slightly beneath the previous week's 4.74% high, the retracement was too shallow to infer that significant easing lies ahead. Further consolidation may be needed for a push to the 5.09% target, but don't expect the pullback to go much lower than 4.58%, the Hidden Pivot midpoint support of the pattern shown. However, rates could fall as low as d=4.42% without significantly affecting the chart's bullish look. It has been nearly two decades since T-Notes exceeded 5%, reaching 5.31% in June of 2007 at the start of the Great Financial Crash.
In the Trading Room Thursday night, I left a note for 'Nick the Greek', an erstwhile shipping tycoon who is able to trade when most of us are sleeping. He'd made a nice score earlier in the day by shorting ES at a 7755.50 target I'd advertised that caught the exact-to-the-tick top of a 32-point plunge. "If the nasty little sonofabitch breaks out again," I texted at 9:28 p.m., "it'll be going to 7769.25. That is a Hidden Pivot resistance that the clowns and algos will not likely know about. I know you prefer 25-point stops for shorting ES, but don't give this gambit more than 10 points." Well, ES did whipsaw higher after faking weakness on the opening, trampolining to what I'd reckoned would be a perfect place to get short, 7769.25. Except that it kept on going -- but only high enough to shame my 10-point stop-loss. The futures then continued higher, peaking minutes later at 7782.50, a measly 3.25 points above the implied stop I'd told Nick to use; then they fell 70 points so quickly that there was no chance to get aboard belatedly. Sorry about that, Nick. But as I keep telling you, you're on the right track shorting every rally in...whatever. That's what the sleazeballs who run this carny midway have been doing, distributing stock at every opportunity in preparation for the inevitable Big One. In the meantime, I will post a link in the chat room to an annotated version of the thumbnail chart, since it contains tradeable information I'd prefer not to divulge on this page.
MSFT's rally has been so steep that I was only half-joking when I speculated in the chat room that the company had found an AI cure for cancer. As powerful as the rally has been, it cannot go one forever. If this is borne out in practice, the 548.98 target shown is a logical place for the wilding spree to end. However, the ease with which buyers pushed past p=449.09 makes it all but certain that the target will be achieved. It's not far above and could be reached as soon as Labor Day, so caveat emptor! ______ UPDATE (Sep 5): The stock ended with week lower, but not much (2.7%). This suggests a consolidation capable of launching MSFT to the 548.98 target identified above. More backing and filling may be needed first, however, along with patience if you trade the stock.
December Gold got slapped down hard on Friday after climbing to within inches of the 4819.30 target (see inset). Price action at p=4417.50 suggests the target is likely to be reached, although penetration was not sufficiently decisive to guarantee this. Regardless, we can trade this situation with a 'mechanical' bid at the red line p=4417.50), stop 4283.50. But unless you know how to craft a 'camouflage' trigger to initiate the trade with relatively little risk, I am not recommending it. Merely paper-trading this one can tell us whether the bull trend begun from July's 4015 low is still intact. If so, the stop should hold; if not, we should be ready to attempt the same gambit at the green line, although predicated on a rally of just one level, from x to p.
