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=4382.40), however unlikely, can be used to get long using a 4128.00 stop-loss.

Last week’s impalement of the red line, a midpoint Hidden Pivot resistance at 103.58, is bad news for the geopolitical and economic world, since it implies June Crude will reach a minimum 128.19. Although the feeble point ‘A’ leaves a lot to be desired as a starting point for the pattern, it will do in a pinch.  A pullback to the green line (91.28) would undoubtedly be read as relief, but this chart says it would be an opportunity to buy aggressively for a blast to new highs.  A ‘camo’ trigger should be used to cut the approximately $12k entry risk by at least 95%. The tactic is detailed in a course I’ve made available free to subscribers.

Rates on the Ten-Year Note climbed to within inches of the 4.48% high recorded on March 27, but there is reason to doubt they are about to break out.  Specifically, the pullback from the high breached a Hidden Pivot midpoint support at 4.35%, implying more slippage to at least 4.28% is no worse than an even bet.  Using the futures contract, traders can get short at 4.39% (interpolated) with a stop-loss at 4.44%.