MSFT spent yet another week hopscotching lower on voodoo numbers that point toward more tedium. The look of the chart should be no comfort to bulls, since it shows DaBoyz slathering on layers of supply since early 2024. Never underestimate their ability to goose this stock 30 points higher in a relative blink of an eye, however, since they've demonstrated great cunning at instigating short-covering gaps on the opening bar. Their pony may do just one trick, but the trick makes it much harder to get short and stay short as the stock edges toward the ledge of a $100 drop-off. More immediately, I expect the initial plunge to hit 373.39 before the stock can gain traction. A rally touching 435.47 first would offer an excellent opportunity to get short.
We've used 3040.90 as a minimum upside target for the bull cycle that began last summer, but let's be prepared for a possible top somewhat below it, at 2992.50. This Hidden Pivot resistance is derived from a pattern with a somewhat higher point of origin. Conjecture favors reaching the higher target, since the so-far 12-day consolidation off the recent high would seem sufficient to push the futures more than the 20 additional points needed to reach 2992.50. We needn't play defense, however, since it will be possible to attempt shorting there without risking more than relative pocket change. ______ UPDATE (Feb 25, 7:54): As noted above, there are outstanding rally targets for Comex April Gold at, respectively, 2992.50 and 3040.90 (an oldie). Despite gold’s stall, they remain viable, but I'll use February 12's 2886.50 low as a fail-safe point. Any slippage beneath this number would be warning that bullion prices are about to come down with the broad averages. _______ UPDATE (Feb 27, 12:58 p.m.): This morning’s breach of my ‘fail-safe’ number in gold (see my last update) portends more slippage in the April contract, currently quoted at 2894.25, to at least 2853.50. If that Hidden Pivot support fails, bet on 2813.50 as a worst-case target for the near term (i.e., 2-5 days). You can buy there aggressively with a tight stop-loss, but there are no guarantees the bounce will get legs.
We'll stay on high alert as March Silver ascends into thin air. Like gold's chart, the overall impression this one creates is of heavy distribution since last spring. A telling feature is the failure of the rally in early February to exceed mid-December's 'external' peak. That would have created a robust impulse leg, but it ultimately took another pullback and a running start to get it done. The short-term picture turned somewhat bearish with Friday's close beneath a midpoint Hidden Pivot support at 32.895 that had previously contained the downtrend from the Feb 14 high. Accordingly, you should look for more slippage to at least 32.450, or to 32.005 if any lower.
GDXJ's easy thrust through 48.39, a midpoint Hidden Pivot resistance, implies a strong likelihood that the rally will reach 54.92, a bull-market target of middling importance. The pattern also suggests that a pullback to 48.39 should be bought with a stop-loss at 46.21. If you know how, you should use a 'camouflage' trigger to cut the initial risk by as much as 95%. That would entail creating an entry trigger with an ABCD pattern extrapolated from the 15-minute chart or less.
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. ______ UPDATE (Mar 1): Rates have slipped beneath my initial target at 4.242%, closing last week at 4.231% off a 4.214% low. This implies that the downtrend is taking hold and could accelerate to fulfill the second target at 3.959%. It has also made achieving that target more likely. ______ UPDATE (Mar 7, 6:31 p.m.): Yields on the 10-Year Note took a strong bounce last week, but it wasn't sufficient to power through the gap created by Feb 25's downdraft. This will add to the downward weight of the chart, but I'd like to see a two-day close beneath the red line before I infer that more slippage to 3.959 has begun.
The chart shown provides little basis for determining with confidence whether long-term rates have peaked. We'll know better once we've seen the downtrend that began a week ago from 4.81% interact with midpoint Hidden Pivot support at 4.24% (p, shown as a red line). It would take a decisive penetration of the line on first contact to imply not only that Ten-Year rates have put in an important high near 5%, but that they are headed under 4%, possibly to as low as 3.67%, in 2025. If so, it is likely the U.S. economy will be deep in recession by that time.
Bulls and bears have been in a tug-of-war since November that has looked more like accumulation than distribution. However, the failure of the S&Ps to break out to new record highs last week when exuberance over Trump's election was feverish implies stocks may need to sell off hard to get running room for the next big upthrust, assuming one is coming. I expect the implied correction to bring the March contract down to at least 5863.75 (daily, a=6107.50 on 12/26) before the futures find good traction..
The last time Bitcoin consolidated for a big leap, it took nearly eight months. The current consolidation is just entering its fourth month, so we shouldn't necessarily expect a significant move any time soon. Gratuitous swings will be tradable in the meantime, but not without diligent attention to the intraday charts. BTCUSD is on a buy signal at the moment that was triggered on Friday by a low that fell within a millimeter of a 96,673 Hidden Pivot 'p' support (60-min, a= 98,500 on 2/11). It can reach 100,393, especially if the uptrend penetrates a midpoint Hidden Pivot resistance at 98,558 first. (60m, A=95,220 on 2/13). Please note that there are still two outstanding targets well above at, respectively, 116,807 and 144,586
April Gold stalled last week en route to an important rally target at 3040.90 that will remain viable if the futures don't slip beneath 2586. You should be prepared to bid or bottom-fish aggressively at the midpoint Hidden Pivot, 2838,60, with a tight stop-loss or a small reverse-pattern trigger. If the expected pullback crushes the support, that would open a path down to as low as d=2708.60, equivalent to a correction of 8.7%. The futures would still have a chance to turn around at 2773.60, the pattern's 'secondary Hidden Pivot support'.
Silver quotes came down hard after an exhilarating run-up last week, trapping bulls and bears alike. I expect the selloff to hit 32.148 at least, but if that Hidden Pivot midpoint support is penetrated decisively on first contact, it would imply more slippage to 31.101, or possibly as low as 30.055. The chart shown displays an in-your-face head-and-shoulders pattern, a bearish formation that is too ubiquitous and popular to be considered reliable. However, it does describe a distribution that has been occurring since June that will have created significant supply between here and new highs above October's 35.530 peak.
