I've set a bullish tripwire at 510.50, somewhat above current levels, to tell us whether MSFT is about to embark on a major leg up. If so, the stock market would likely follow, since Microsoft remains a key bellwether. This does not negate a 493.67 correction target where I'd intended to bottom-fish aggressively. But I'm not married to either scenario and would prefer to simply let the stock tell us how it's feeling rather than pretend we have a crystal ball. If MSFT climbs toward new highs, don't expect the ascent to be smooth. That's because the slimeballs who manipulate the stock trapped too many bulls (and short-covering bears) with July 31's lunatic leap to 555.
It was nearly three years ago that TLT tripped a sell signal tied to a Hidden Pivot target at 80.84. This ETF proxy for T-Bonds was trading just above 102 at the time, and few could have imagined then that such a grim outlook was justified. The thumbnail chart shows an even darker possibility based on a long-term bottom at 74.38. But the graph also allows for a possible turn from p2=81.20, somewhat above our longstanding target at 80.84. This is what I believe will occur, since a further fall to 74.38, implying correspondingly higher long-term rates, would choke off expansionary pressures long before TLT could plunge to such depths. For now, though, you can use 81.20 as a minimum downside objective.
In the chat room just now, a subscriber queried me about Silver's chances of reaching $50 an ounce. I responded as follows: The long-term pattern is too obvious to deliver precision, but even lousy patterns can work in two ways: 1) generating profitable 'mechanical' entries; and 2) revealing trend strength at the midpoint. In this case, the monthly chart has provided no pullbacks sufficient to trigger a 'mechanical' bid, and that is bullish. But the year-long struggle at p=32.350 is a somewhat bearish offset. On balance, I'd say the odds of reaching the 53.06 target are about 60%. If the bull trend is going to fail, however, p2=42.705 would be a logical place for it to happen
MSFT edged slightly closer to the 493.67 midpoint support featured here last week. It is my minimum downside objective, but also an excellent spot to attempt tightly scripted bottom-fishing. I've redacted the full pattern, since I'm getting tired of seeing appealing rABCs get front-run. Others are bound to discover this one, since it is hardly obscure. But it is sufficiently compelling to work, so stay with it.
Bitcoin has been a reliable indicator for the manic, speculative energy of this never-ending bull market, so its unusual weakness recently should be a concern on Wall Street. The pattern shown strongly implies that the selloff is headed down to at least 104,733. On this chart, price action already tripped a winning 'mechanical' short at 111, 293, which suggests the odds of a similarly tradable low occurring at the 104,733 target will be favorable. Please note that an alternative Hidden Pivot target at 105,548 could also engender a tradable bounce. You can try bottom-fishing in either place with a tight stop-loss fashioned from a small-chart trigger, or via your own method.
Bulls blew past a longstanding rally target at 78.28 last week with such brio that I've shifted my sights to a new objective at 86.41. GDXJ looks all but certain to get there, given that its ascent impaled p=75.16 on first contact. The pattern is somewhat unusual because of the subdivided A-B leg, but the midpoint Hidden Pivot (p) should prove reliable nonetheless for projecting an easy move to the corresponding 'D target. Once the rally hits p2=80.78, a relapse to the red line, however unlikely in a move this strong, would trigger a 'mechanical' buy at p=75.16. The stop-loss would be at 71.41.
The struggle to surpass a stubborn midpoint Hidden Pivot at 6494.25 has consumed bulls for more than two weeks and made a follow-through to D=6749.00 less than the usual sure thing. However, we are obliged to give the uptrend the benefit of the doubt, since it has routinely swept aside every technical resistance it has encountered over the last 16 years. This particular pattern has already rewarded 'mechanical' buyers at the green line (x=6366.88) with a quick, fat profit of nearly $15,00o per contract. It would be no detriment to the chart's bullish look if that were to happen again, yielding what I would ordinarily call 'sloppy seconds'. Alternatively, a breakdown below C=6239.50 would probably signal the beginning of the end. However, the sideways hesitation at these heights does not look sufficiently dramatic to cap the most spectacular bull market in history. Wouldn't you agree?
Gold futures are ascending for the umpteenth time into a zone of multiple peaks that resemble the Denver airport. Are they finally breaking out? It would seem that way, but we should be cautious nonetheless, since every rally since last May has ended in disappointment. Gold hasn’t exactly fallen apart on the pullbacks, which added to our confidence in bullion’s long-term prospects. However, if this is a breakout we’ve been waiting for, we should be careful what we wish for, since it very likely means the 16-year-old bull market in stocks is over and that the Trumpster is in for some rough sledding. Looking just ahead, the futures should be presumed bound for at least p2=3584.30 if they poke decisively above the 3503.70 top recorded on August 8. _______ UPDATE (Aug 31, 1:40 p.m.): No change in my outlook, although it is interesting that gold is threatening to break out just as the stock market turned unusually sickly last week. My hunch is that the global economic crisis that has been brewing for decades will give bullion's bull market dramatic force. The first evidence of this we would see on the chart is a breakout above 3503.70, as noted above. If decisive, that would put the October contract on a path to 3719.70 We should know by the end of the week whether gold is just screwing with our heads yet again.
I have outstanding targets on the monthly chart as high as 7499, but this truncated view is the one we should focus on for now, since it is growing clearer and more compelling by the day. It has produced three winning trades so far: a conventional 'buy' at the green line; a short from the red line, and a 'mechanical' buy on the pullback to the green line. This suggests that p2=6621 and D=6749 will also be usable and reliable for producing profits. However, because buyers did not exactly impale p=6494 on first contact, or even on the second, there can be no guarantees the target will be reached. The secondary pivot (p2=6621) ) is another matter, however, and its attainment will become a lock-up if the futures end the coming week resting above it. In the meantime, yet another relapse to the green line, however unlikely, should be treated as an attractive 'mechanical' buying opportunity.
My outlook is still bullish, with a 593.73 target in play that was introduced here last week. This chart offers a different view, however -- one that suggests the stock would become an opportune buy when the correction comes down to p=493.67, the midpoint Hidden Pivot of a pattern I've cloaked for proprietary reasons. You should use a trigger interval taken from the hourly to initiate the trade, but it cannot be calculated accurately until the stock is close to p. As of now, it looks like $2.08 TI should do the trick, but a more timely calculation could help to reduce that number. As always, a decisive breach of the midpoint support would shorten the odds of more slippage to the 'd' target -- in this case 431.89.
