Rick’s Picks

Bitcoin's wild histrionics never stop demonstrating that the most crazed trading vehicles are the easiest to forecast. Friday's bounce following a cliff-dive splash occurred precisely at a 'voodoo' support that I was too busy to notice at the time. If you want to play catch-up, jump on this lamb chop on a fall to 81,023, the green line.  The trade would require a 78,166 stop-loss. You can also get short at 89,589, provided you have a way to cut the theoretical risk down to relative pocket change.  My earlier comments anticipated further slippage into the 60s, but first let's see if the headless chickens who animate this vehicle can pop it through my Hidden Pivot resistance at 89,589. _______ UPDATE (Feb 7, 9:57 a.m.): Bitcoin has been preparing for the next plunge to 70,000 or lower with gratuitously violent swings. They are engineered to help the so-called smart money distribute inventory to the rubes and crazed young people. if a rally gets close to 96,430.27, an interesting Hidden Pivot resistance, I’ll recommend shorting there with a stop-loss no wider than 96,976.01.

Gold had a brush with serious injury on Friday when it touched a 2844.10 midpoint Hidden Pivot support associated with a worst-case 'd' target at 2714.10.  The April contract took a robust bounce to end the week, but a retest of the support is likely. It would require two consecutive weekly closes below p=2844.10, however, to imply that more downside to D awaits. Regardless, the futures were a good bet for bottom-fishing near Friday's lows. Immediate potential was to 2876.60 (30m, a= 2903.30 on 2/26), or 2889.10 if any higher. If an upthrust decisively penetrates that last Hidden Pivot resistance, it would imply that bulls have regained control of gold. Alternatively, a crushing fall through 2844.10 would portend more slippage to at least 2779.10.

May Silver's cinder-block fall through p = 32.508, a midpoint Hidden Pivot support shown in the chart, leaves no doubt that further slippage to at least d = 30.455 awaits. Expect a tradable bounce from that number or very close to it, but don't bet the farm that the rally will achieve new highs above mid-February's 34.560 peak, let alone above October's at 35.800.  I've published a corresponding target for April Gold, so we're likely to have a verdict soon on whether the long-term bull market in bullion has stalled, or died.  I doubt the latter will occur, but we should be prepared, nonetheless, for a potentially painful correction into the high 20s.

GDXJ's chart is in good shape -- good enough, actually, to hint that the upcoming test of support in gold and silver futures will favor bulls.  The likelihood of this will increase if this vehicle hits the green line just as its Comex-contract cousins are touching their respective 'D' correction targets.  Regardless, if GDXJ falls to x=45.12, shown in that inset chart as a green line, that would signal a 'mechanical'  buy, stop 41.84. Presumably, it would be good for an easy ride back up to at least p = 48.39.

I've updated the marquee only because April is now the active month. My outlook for the near and intermediate term, however, remains virtually unchanged: Zzzzzzzzzzzzzzzzzz. What an ill-behaved bore crude is, even though it is the largest, most heavily rigged commodity market on Earth -- in the Milky Way galaxy, for all we know.  The April futures are currently trading just beneath the middle of a gratuitous $15 range that has obtained for more than three years, fixing to do...whatever. Remember: I'm always available in real-time to vet your oil-trading ideas, even if this tout is just a placeholder.

Bitcoin’s success as a pure speculative vehicle benefits more from tight supplies than any other factor. Its deep-pocketed sponsors don’t bolt for the exits whenever the going gets tough, even if they rely on crazy young people (‘verrückte verdammte junge leute’, colloquially) to provide the manic buying power that alone can rocket Bitcoin to stupid heights. Today’s decisive breakdown (see inset chart) implies DaBoyz have decided to let the value of their precious virtual hoard plunge into white space that is unlikely to evince much support until $65,000 or so is reached (see chart inset). That would amount to a 25% haircut, or 40% from the record $108k achieved in December. This is a bold gamble but necessary if the Masters of the Universe are to avoid having to suck up untold Satoshi tonnage dumped by the hoi-polloi in a global bear market. Has the bear arrived? It's certainly possible, and we will, therefore, continue to check Bitcoin's pulse regularly to get an accurate ‘read’ on a speculative mania that has pushed shares steeply higher since 2009. Stay tuned!

Time for a tone change. This is a tough call, since I've been a hard-core deflationist since the mid-1970s after reading a persuasive book by the late C.V. Myers, and later another, The Great Reckoning, by James Dale Davidson and Lord William Rees-Mogg. Myers' thesis was that the endgame for the epic credit blowout of the last 40 years would feature a dollar so strong that all who owed them would be crushed by imploding debt. The implied tsunami of bankruptcies would be even more devastating than the 1930s experience, wiping a dozen zeroes from the global balance sheet. The resulting shortage of dollars would become the catalyst for a Second Great Depression from which it would take a generation or longer to emerge. I still believe this is how things must end. But not now. Trump, who is verging on political omnipotence, clearly favors a weak dollar, and this will hold the coming bust at bay for a while. But the chart suggests the dollar is tough enough to stand up to such moderate debasement as Trump's patriotism and nationalistic pride can abide. I have adjusted my outlook for the dollar accordingly: Look for weakness down to the range 95-100; then, an explosive rally that will end inflation for 60 years. _______ UPDATE (March 14): The Dollar Index has come down hard to the 102.99 'd' support of this pattern.  It is sufficiently clear and compelling that we 'should' see a tradable bounce. If there is none, that would darken my outlook significantly. _______ UPDATE (Mar 21): DXY has bounced 2% from within 20 cents of the 102.99 'hidden' support furnished above. The rally would be more persuasive, however,  if it exceeds several 'external' peaks ranging from 104.32 to 104.67 recorded in the first week of March. Here's the chart. 

Ten-Year yields have been pounding on a 'hidden' support at 4.430% for more than two weeks, presumably getting ready for a drop to exactly 4.242%. A tradable rally from that Hidden Pivot support looks like an 80% bet, but if it eventually gives way, look for a further fall to 3.959% or even 3.675%.  By all means, jot these numbers down if you care about where long-term interest rates are headed, since charts can predict them far more accurately than the dartboard guesses you'll get from Bloomberg's talking heads, The Economist, The Wall Street Journal, the punditry, Fox Business News, MSNBC et al.

Friday's mildly refreshing death dive failed to develop sufficient momentum to reach the 'd' correction target at 5965.25.  All that sellers could muster was a close a few points above the intraday low at 6024.50. Why were bears unable to finish the job? Probably because they're worried about colliding with buy-the-dips maniacs hellbent on running stocks back up the old wazoo, is why. They are all but certain to achieve the target on Monday, however, given the way they sliced through the midpoint Hidden Pivot support at 6065.88 like a torch through styrofoam. You can bottom-fish the target 'counterintuitively' if you know how to fashion a reverse-pattern trigger borrowed from the 5-minute chart.  If you don't, just ask. _______ UPDATE (Feb 25, 5:14 p.m. EST): Despite the usual idiots and psychotics buying today's dip, the weakness did heavy technical damage when it crushed my 5965.25 minimum downside target (which I reaffirmed on Friday, even as the little hoax opened with a 35-point overnight gain). The next opportunity ES will have to turn around lies at 5872.25. If this voodoo number, unknown outside of Rick's Picks, provides no bounce, bulls will have one more reason to worry.