Although buyers did not quite impale the midpoint Hidden Pivot at 79.37 on first contact, they broke free of its gravitational pull with sufficient force on Friday to all but ensure more upside to at least p2=85.53, or more likely to the d target at 91.69. Traders, and even the hacks who invent 'the news,' have learned by now to tune out any suggestion emanating from on high that crude oil markets will return to normal any time soon. The August contract will offer an enticing short at the target, but it should be traded from the long side until the target is reached. Does that imply some breakthrough in the war is at hand? We may have an answer before August.
The bull is taking its time consolidating for an upthrust to the 4.82% target shown in the chart. The process could include a dip to x=4.48% that would trigger a theoretical buy signal. Although we do not actually trade this vehicle, such a signal could be easily leveraged using TLT or T-Bond futures. But it is more the implications that interest us, since higher rates will tend to make nearly every economic challenge each of us faces more difficult to cope with. Gold will remain under pressure, and many tens of trillions of dollars of debt reckoned in dollars will grow more costly for borrowers to service. Imports would be cheaper, but the relief that would bring to beleaguered consumers would be negligible compared to so many other factors that have been making life increasingly expensive. Our new Fed chairman thinks inflation might be moderating, but he knows a good deal less about this than a housewife tending to the needs of a family with children.
The futures ended the week on a tempting buy signal that was best ignored, since it is impossible to predict on a Friday what fresh hell Sunday's news might bring. The headlines were decidedly bearish in producing Thursday's overnight cascade: crude prices were up nearly 4%, Xi Jinping was boasting of China's supposed answer to Anthropic, and a SpaceX rocket ship failed to get airborne. Stocks did not so much shrug off this news as leverage it to spring a weak bear trap. The short-covering Whoopee Cushion that resulted culminated in the buying temptation noted above. Now, the futures will either leap to the 7573.50 target, or at least to p=7523.25; or more likely in my view, stop out the trade and continue down to late-June's lows near 7350. Stay tuned to the chat room for ringside commentary as events reveal the nature and purpose of Mister Market's deceptions.
MSFT's erratic ascent over the past three weeks seems sustainable because there is no exuberance in it, let alone hubris. The stock remains a key bellwether, and that is why its continuing rise toward the 458.69 target would support a bullish waft for the stock market as a whole. This is notwithstanding my dour analysis of the E-Mini S&Ps (see above). In any event, a pullback to the green line (x=376.57) should be bought 'mechanically' with a stop-loss at 349.19.
The simmering geopolitical crisis has been insufficient to prop up gold against relentless selling ever since prices hit a record 5700 last February. Now the February contract lies within an inch of a 'secondary' Hidden Pivot support that has resisted the downtrend for several weeks. The mildly encouraging news is that a 3822.70 target $200 below could provide support. It comes from a pattern much too obvious to work precisely, but it will work nonetheless, possibly repelling bears with enough vigor to jump-start the bull market. However, there is a more compelling target beneath it at 3630.70 that you should fix in your minds. It is more closely congruent with the 82.46 target we've been using in GDXJ (see below). So as not to leave things too glum, my best-case alternative would be a rally surpassing June 21's 4238.10 'external' peak. That would probably end the bear market, but I don't consider it likely.
With last week's breach of a key 'p2' support at 56.75, the futures look primed to fall to D=43.155. The target would be even lower had I used the marquee 'A' high, but the one I've improvised should be good enough for analytical purposes. Notice that the target is significantly more bearish than the one I've flagged in August Gold (see above). I expect this discrepancy to be resolved via Silver's bullish reversal from a low somewhere above the 43.155 target. The number to watch is 47.720, the D target of A=72.18. If a rally from that price, or from any price above it, achieves 7.11 points, take it as a sign that the bear market is probably over.
Last week began with a doomed two-day rally that left our 82.46 target unchanged. It has now been five months since shorting an upthrust proved to be a bad bet, and that will probably hold true at least until GDXJ finds a bottom at or near our target. It is a Hidden Pivot support too compelling to simply give way. It is also commensurate with a 3630 target I've provided for August Gold where a significant bullish reversal seems most likely to occur. Alternatively, we'll set the bar at 120.06, just above an external peak recorded on May 29, to alert us to the possible ending of the bloodletting.
A two-day surge pushed rates on the Ten-Year past three prior peaks, two of them daunting 'externals'. This amounts to a quite powerful impulse leg, presumably with enough power to challenge the 4.69% high recorded in mid-May. The usual gallimaufry of 'scholars' will debate how many Fed governors can dance on a cow pie, but that won't alter the fact the market forces are putting significant upward pressure on Treasury yields. The short-term technical picture suggests they will reach a minimum 4.73% over the next 2-3 weeks, but 4.82% is possible,
The week ended with a ratcheting, brain-dead rally inspired by a relative dearth of "news". The Wall Street Journal led with this grabber: Fears Over New Luxury Jet Forced Trump Back to an Old Air Force One After Israeli Warning. The stock market's excruciatingly modest gains didn't quite reach the 7682.25 target shown, but we should expect it to be achieved early in Monday's session. The target is worth shorting with a tight stop, especially if you can do it with a 'camo' trigger to limit risk. If this somewhat obvious Hidden Pivot gives way easily, don't assume that the new record highs that follow will leave the market's shills and cheerleaders groping for superlatives. In fact, we'll turn extra-cautious, since this would be a great opportunity for Mr Market to spring a bull trap worth remembering.
The stock, still a sensible bellwether for the bull market, has bounced 12.5% since bottoming two weeks ago at 349. The low fell somewhat shy of a 339.27 target, but I expect it to be achieved nonetheless before the stock can put in a solid low. That's because sellers made such short work of the 402.80 midpoint Hidden Pivot support the first time they encountered it on the way down. Alternatively, if the stock comes bolting out of the gate when the new week begins and then closes above 402.80 for two consecutive days, take it as a sign that it's headed for a minimum 434.56 (x, the green line).
