The Dollar Index has broken down with last week's penetration of a key low at 99.58 that was recorded in July 2023. Expect more weakness down to the green line (x=96.03), at least, before the greenback can turn around. A dip to the line would trigger a 'mechanical' buy predicated on a climactic run-up to the 119.37 target. That seems farfetched at the moment, but there is nothing in the chart to suggest the long-term uptrend is over. At the green line, the correction will amount to about 16% from the September 2022 high at 114.78.
Despite the hellacious dive over the last ten days, TLT is on a double buy signal. The more important of the two is shown in the weekly chart (inset). An 88.47 bid would require a stop-loss at 84.88, just beneath the pattern's point 'c' low. You can see how close the low came to stopping out the position, but it held nonetheless -- by 12 cents. T-Bonds were bound to turn around sooner or later, and the chart says this would be a logical place for it to happen. Odds that a major low is in place would shorten if this so-far modest bounce can push past D=88.39 of this minor pattern. _______ UPDATE (Apr 17): The tout above sniffed out a strong bounce, but not quite strong enough to lift TLT from the danger zone. That would require a thrust exceeding the 88.91 'external' peak shown in this chart. My hunch is that bulls lack the gusto for this task, but we'll give them the benefit of the doubt when trading gets under way after a long Easter holiday weekend.
Although the futures have rallied nearly 700 points from last Monday's Hidden Pivot low, their failure to surpass the small external peak shown in the inset was timid behavior. It also set up a theoretical 'mechanical' short at 5406.25 (stop 5529.00) that we'll ignore. Instead, let's give bulls the benefit of the doubt for now, meaning we should expect a thrust above the 5528.75 recovery high shortly. Alternatively, a relapse could send the futures down to as low as d=5038.75 in search of traction (60m, a=5322.00 on 4/4). You could bottom-fish there aggressively with a stop-loss as tight as 2-3 points.
Last week's violent swings paused at the 389.29 midpoint Hidden Pivot shown in the inset. The shallow pullback from this resistance implies bulls had plenty of energy for a follow-through to the pattern's 'D' target at 410.78. If the stock pulls back to the green line from near the 395 'sweet spot', that would generate an appealing 'mechanical' buy signal. So would a pullback to the red line (p=389.29) once p2=400.04 has been touched. Your bid should be tied to a 382.12 stop-loss, but you could substitute naked-short puts for shares..
Ten-Year rates have taken a Whoopee Cushion bounce en route to a presumptive bottom at 3.67%. It reportedly was caused by the wholesale dumping of T-Bonds by European banksters intent on disrupting U.S. financial markets. Powell's tightening regimen is making it difficult for them to open up the credit spigot, and so they have desperately tried to force his hand. The survival of some large American hedge funds could be at stake, since they were leveraged up to the eyeballs with a spread that required a bullish position in bonds. With Powell standing his ground, my gut feeling is that the panic will subside shortly and that rates will not break out above January's 4.81% high.
I've drawn a cautionary pattern because gold is long overdue for a full abcd correction, and because Friday's high occurred almost precisely at a 3261.40 target I'd posted in the chat room around 10:00 a.m. Assuming the high endures, the rABC pattern implies a pullback to the 2868.60 'd' target is likely. (Note: You'll need to shift 'c' upward if gold continues to rise.) The years-old 'a-b' segment remains viable because no pullback since this leg was completed in 2021 has reached 'd'. If it does now, that would amount to a 12% correction. You can bottom-fish with a tight stop at p, but be aware that its decisive breach, wherever it occurs, would warn of more slippage to 'd' or lower. _______ UPDATE (Apr 14, 1:25 p.m.): The correction predicted for gold using the weekly chart (see ‘above) would be quite painful, but there is a milder scenario suggested by the hourly chart reproduced here. June Gold, playing coy, has not yet tripped a theoretical sell signal by touching the green line (x=3205.20), but if and when it does, it should be presumed bound for the midpoint Hidden Pivot support (p) at 3147.40. We’ll be better able to judge the strength of the downtrend after we’ve seen sellers interact with p. A decisive penetration on first contact would imply more weakness, as would a subsequent overshoot of d=3031.80. Both levels can be bottom-fished with a tight stop-loss. (Note: So much for weakness! The futures still haven't tripped a sell signal, never mind sold off. The chart has been updated and slightly revised, since the original ‘c’ coordinate was slightly off.)
The May contract got a strong push last week to the 'secondary' Hidden Pivot (p2) of a pattern with the potential to deliver more upside over the near term to d=33.635. The initial penetration of p=30.590 was hesitant, but once the futures got past the resistance they never looked back. Assuming silver plays hard-to-get, be ready to buy a pullback to p=30.590 'mechanically'. Your bid at that price would take a stop-loss at 29.575, so a 'camouflage' trigger of lesser degree is suggested. An easy and decisive move through d would portend more upside to 36,769, or even 39.844.
GDXJ struggled for eight months to push decisively past midpoint resistance at 49.02, so there are no guarantees that it will easily reach the 72.23 target, especially straightaway. More likely is a ratcheting move to the target that requires 6-8 weeks to complete. Gains from one peak to the next will likely be smaller than theoretical losses incurred from holding shares from trough to trough, but that also means positions can be 'worked' with covered writes on the way up to squeeze additional yield from your position.
The failure of sellers to push this air ball down to the 70,417 target is mildly bullish, but it will take an upthrust exceeding the two 'external' peaks recorded on March 24 and April 2 to put bulls back in charge. The peaks lie, respectively, at 88,530 and 88,805, close enough to form a double resistance that will require short-covering to penetrate. Once that happens, the 94,850 point 'C' will magnetically draw this vehicle higher. There is a theoretical path to as high as 133,759 (weekly chart, A=49,050 on 8/10/24), but we'll put that out of mind until such time as p=104,090, just beneath the record 108,388, is achieved.
Quotes for crude have turned up from an odd place, well shy of a 'secondary' Hidden Pivot support at 49.25. Odds of a relapse will depend on how bulls fare pushing past a minor Hidden Pivot resistance at 62.22, and another at 65.68 (60-min, A=56.42 on 4/9). If both of these numbers are exceeded, especially decisively, then last week's low at 55.12 may prove to have been an important one. For now, set screen alerts at 62.22 and 65.68 to determine whether the bounce is likely to get legs.
