Still Fishin’…

One might think manipulating yields on the Ten-Year Note would be beyond the reach, even, of Donald Trump and those who serve him in the shadowy corridors of financial power. And yet, each time the interest rate moves in earnest toward the psychologically hazardous 5% level, it swiftly retreats as though blocked by some unseen force. With the national debt creeping up on $40 trillion and the financialized, high-leverage economy going gangbusters, there is no logical reason why long-term rates should not continue to waft higher instead of stumbling and tumbling as they continue to do. A crucial test is not far off in any case, since a breach of the 4.58% ‘p’ support shown in the chart that was narrowly avoided last week is still an imminent possibility. If it happens, that would signal downforce capable of pushing rates to the 4.42% target shown. It would provide a breather for a badly overheated economy in which borrowers are in desperate need of respite. _______ UPDATE (Aug 15): Rates on the Ten Year Note ended the week marginally higher after aborting a downtrend that might have offered borrowers, including the U.S. Government, a hint of relief. They were ascending toward the 47.13 Hidden Pivot resistance shown here, but it will take an energetic push past it to suggest there’s power enough to get to 5%.  

Friday’s muted rally stalled just a penny from the 78.78 midpoint Hidden Pivot resistance shown in the chart. This could hardly have surprised, since none of the wack-os who trade crude could conceivably know what kind of fake rabbit Trump will pull out of his hat over the weekend. By saying the ink was nearly dry on a supposed deal with Iran to open Hormuz shipping lanes, Trump has further eroded his credibility in matters of international diplomacy almost to the vanishing point.  Saturday’s headlines note an Iranian missile attack on a U.A.E. tanker, news that hardly squares with Trump’s bullshit and blather last week about an imminent cease-fire. For my part, I will not even hazard a guess as to whether crude oil traders will greet the new week with a push past 78.78. If they do, it will clear the way to at least 83.33, with a corresponding, economically destructive upsurge in prices at the pump, and, eventually, in the price of virtually everything.

Did gold’s bear market end with the 4016 low recorded a month ago? We’ll likely have a definitive answer next week if the powerful upthrust of the last two days continues, exceeding the 4465.90 peak shown. That would mean the futures had exceeded two ‘external’ peaks on the weekly chart without a pullback, indicating that an exceptionally powerful impulse leg is in progress. It would presumably be strong enough to break the back of a bear market begun from a record 5782 last January. The minimum upside target thereupon would be 4819.30, still well shy of the old peak but a good start on it. Check the chat room for precise guidance if the futures should swoon, since that could set up an excellent buying opportunity down near 4200.

I gave GDXJ the benefit of the doubt when last week ended, but all it did was add to the disappointment we’ve felt waiting and waiting…and waiting for gold to show a pulse. I set a low bar, and GDXJ didn’t have to do much to turn the intraday charts short-term bullish. Alas, two falsely-signaled rallies sevened out, and so I’ve switched to a bearish pattern that projects more downside to 86.60.  I’ve aired another that implies even lower depths will be plumbed, down to 82.46 over the next 6-8 days. For now, though, let’s take the bad news one target at a time. A 105.95 print would bull things up a bit, but let’s not get excited until it happens. ______ UPDATE (Aug 8): Last week’s effortless stab through adamantine resistance at 106.67 all but guarantees the 123.50 target will be reached. My hunch is that there is enough power in this move to push GDXJ easily past that target. However, buyers would still need to exceed the circled ‘external’ peak at 136.55 to reactivate the larger bullish pattern (A= 87.35 on 11-7-25) and its 159.97 ‘D’ target.