Gone Fishin’…

In my last weekly commentary, I drum-rolled a 128.19 target that seemed to grow increasingly remote as the futures descended last week to an apparent low at 88.66. However, a potentially robust turnaround was signaled the next day when the June contract bounced, triggering a theoretical ‘buy’ at 96.65. It is tied to a ‘D’ target at 120.62, but we’ll need to see how bulls interact with the midpoint Hidden Pivot resistance at 104.64 before we can judge confidently whether the target is likely to be reached. The pattern is compelling enough to expect an accurate and reliable assessment of the uptrend’s strength.

The two-month-long ascent of rates on the Ten-Year Note did an apparent death rattle last week with a run-up to 4.46%. That fell slightly shy of the 4.48% peak recorded at the end of March. I still think the peak will endure, at least for the foreseeable future. This outlook remains to be confirmed, however, by a downtrend that generates an impulse leg on the daily chart. At the moment, that would imply a decline touching 4.22%. I should note that someone who thinks rates will fall is considered bearish on rates. Because this can be confusing, we tend to say that the person is bullish on bonds, since bond prices rise as rates fall.

With strong back-to-back rallies on Wednesday and Thursday, the futures made significant progress last week toward the 93.995 target shown. Although we were able to get long in Gold using a similar pattern, July Silver’s recent dip did not quite reach the green line (x=69.744) to signal a ‘mechanical’ buy. It left the station without us, but that only shortened the odds of a move-to-target. A relapse to the green line (x=69.74), however unlikely, can be used to get long using a 61.65 stop-loss.