Rick’s Picks

DaBoyz spent most of the week screwing the pooch, waiting for more Hormuz twaddle from Trump to help them jack the markets, or for a headline speculating that the Fed might be less inclined to tighten for whatever reason. The latter helped foment a middling, 60-point short-squeeze on Thursday, but by week's end stocks appeared to be settling back into their wonted state of constipation. Not that that will make them any less tradeable: Bottom-fish 7778.50 with a tight stop if you're around when it's hit. (Note: When I say "tight," I mean to imply that you should use a small pattern 'camo' trigger to initiate the trade, and that it risks no more than small change to get you on board.)  Concerning the bigger question of whether we are in a bear market, bull market, or a sideways correction, it can be answered much more easily than you might imagine, using the simple chart shown. If the September contract falls to the green line without having exceeded 7838.50 first, that would imply bulls are taking a long overdue rest. Expect the fall to hit p=7676.00 at least but watch out below if they impale it on first contact. An easy breach of d=7613.75 would be the most bearish sign the S&Ps have flashed in a long while. One final note: Consider my Microsoft tout (immediately below) alongside this one, since the stock remains a key bellwether for the long-term bull market.

The easy blast through p=449.09, the Midpoint Hidden pivot, leaves little doubt as to whether the stock will reach the 548.98 target shown. The bad news for bulls is that would fall just a tad shy of the record 555.45 achieved last August, and that implies this is 'just' a bear rally, albeit a very impressive one. It would be psychologically impressive as well, since permabulls would be licking their chops, and bears will already have thrown in the towel.  What a splendid trap that would be!  If a relapse to the green line intervenes, it would practically announce a bear market. And although we should be prepared to bottom-fish down there anyway, it should be with expectations of capturing only a one-level bounce to the 559.09 'p' midpoint.  We should also consider a 'mechanical' buy at the red line (p=449.09) if the opportunity develops.

We may soon know whether gold is back on the recovery path or even the warpath. It all depends on how bulls handle the 4530.10 midpoint resistance shown. Last week's timid rally was a step in the right direction.  Now, if they impale the Hidden Pivot, and especially if they close this erstwhile brick above it for two consecutive bars, that would be strong evidence of a resurgence capable of powering the futures not only to 5000 but also to a test of January's record 5781.

If the futures can break decisively above the 69.215 midpoint Hidden Pivot resistance shown, that would provide solid evidence of bulls' ability to keep pushing all the way up to the 83.43 target. This chart is not drawn exactly like the one in gold (see above) because silver has underperformed relative to gold since June. However, it does focus on resistance at 'p' as the key to determining trend strength with confidence. We should eventually hope to see enough strength to deny us any easy opportunities to belatedly buy this vehicle 'mechanically on a one-level pullback. Let's watch closely to see how things unfold, since a test of 'p' in the week ahead appears likely.

The 123,50 rally target is equivalent to the midpoint Hidden Pivot resistances I've spotlighted in the gold and silver touts above.  That means buyers are likely to push above 'd' if corresponding prices in the futures contracts are exceeded. Such a demonstration would be even more conclusive and would affirm strength in physical if GDXJ goes on to exceed mid-April's 136.55 peak without a visibly significant pullback in the interim. In the meantime, a correction to p=106.67, however unlikely, can be bought with a stop-loss at 101.06.

One might think manipulating yields on the Ten-Year Note would be beyond the reach, even, of Donald Trump and those who serve him in the shadowy corridors of financial power. And yet, each time the interest rate moves in earnest toward the psychologically hazardous 5% level, it swiftly retreats as though blocked by some unseen force. With the national debt creeping up on $40 trillion and the financialized, high-leverage economy going gangbusters, there is no logical reason why long-term rates should not continue to waft higher instead of stumbling and tumbling as they continue to do. A crucial test is not far off in any case, since a breach of the 4.58% 'p' support shown in the chart that was narrowly avoided last week is still an imminent possibility. If it happens, that would signal downforce capable of pushing rates to the 4.42% target shown. It would provide a breather for a badly overheated economy in which borrowers are in desperate need of respite. _______ UPDATE (Aug 15): Rates on the Ten Year Note ended the week marginally higher after aborting a downtrend that might have offered borrowers, including the U.S. Government, a hint of relief. They were ascending toward the 47.13 Hidden Pivot resistance shown here, but it will take an energetic push past it to suggest there's power enough to get to 5%.  

Last week's buying binge pushed this ETF through the midpoint Hidden Pivot resistance at 529.94 with such force that more upside to at least 595.80 is assured. The first thing to notice, however, is that a rally to that number would fall well shy of a new record high. It would also corroborate my suspicion that the bull market begun in 2009 is over, and that tech stocks are leading the implied sea change.  Regardless, a pullback to the green line (x=497.01) from last week's high at 547.90 can be bought aggressively using a 'camo' trigger. The technique is described in the six-hour Hidden Pivot Course I've made available in recorded form to all legacy subscribers and newbies who have signed up with Rick's Picks for a full year.

The short squeeze powering this bull market tacked on another week of mechanical buying, leaving little doubt that the 8263.35 target shown will be achieved. Adding to the evidence is that the futures have remained above p=7307.75, the midpoint Hidden Pivot resistance, since touching it for the first time three months ago. Now they've blasted free of it decisively by exceeding p2=7785.00 on Friday. Your trading bias should be bullish but consider it a gift if this vehicle should pull back to 7657.75 before launching anew, since that 'hidden' support can be bottom-fished with a tight 'camo' trigger.  The one-off low is not strictly kosher, but if the uptrend exceeds D=8262.25, you can assume it's bound for 8557.50, the target associated with the marquee low at 4832.00 recorded the second week in April.

Microsoft has blown past 'p' midpoint resistance at 449.09 with such force that there can be little doubt the stock will reach the D target at 548.98.  MSFT has been an excellent bellwether for the stock market as a whole, and so we should assume the broad averages will rise in its vortex, at least until it reaches the target. The pattern also looks likely to work well for bottom-fishing swoons either to the red line or the green.  The initial stop loss for a trade executed at the higher would be at 515.79; and for the lower, 349.19.