Still Fishin’…

Switching to the September contract, the futures were on their way up to at least 7570 .75 when the closing bell ended a do-nothing week. This is all but guaranteed, given the way buyers fist-pumped through the midpoint Hidden Pivot on Thursday. The futures were little changed from the previous Friday’s close, although a gratuitous feint south on Wednesday made this vehicle worth trading.  Friday’s action featured one ‘mechanical’ buy signal at the red line, although we typically do them only at the green line (i.e., at x=7351.75). When the new week begins on Sunday afternoon, I recommend getting short for a scalp-trade at 7570.75, but only to subscribers who know how to reduce the entry risk to relative pocket change by using a ‘camouflage’ trigger. The technique is spelled out in detail in the $2500 Hidden Pivot course that I’ve made available free to subscribers. _______ UPDATE (Jun 14, 10:50 p.m.):  The prospect of Whirled Peas goosed stocks hard when they resumed trading this afternoon. The E-minis came within an inch of the 7570.75 target on the opening bar, then leaped above it after a shallow pullback. A second pullback from the new top at 7574.75 would have triggered a tight ‘camo’ short with (visual) TI= 5.25 points; the resulting loss would have been a relatively modest $260 per contract.  At the moment, the futures are in a runaway short-squeeze that has hit 7583.75 so far. It can be shorted nonetheless using a larger reverse trigger of 15.75 points. That is too wide and risky for my taste, although I would rate the trade no worse than an even bet to make money. Based on the so-far high at 7583.25, the short would come at 7567.25, with 50% to be covered at 7551.25. With index futures in an apparent wilding spree and Trump setting up for the Nobel Peace Prize, it’ll probably be easier and less risky at the moment to go with the flow rather than attempt to short a blowoff top being energized by the geopolitical equivalent of a cure for cancer. ______ UPDATE (June 16, 9:18 a.m.):  Buyers had no trouble surmounting the 7807 midpoint resistance of the pattern shown. This implies that the rally is all but certain to continue to at least D=8262.25 and that a ‘mechanical’ buy at the green line would be warranted if the futures pull back to it, however unlikely. Keep in mind that this is a continuous chart and that its target does not precisely match that of the September contract. Also, I have used a technically dubious one-off-low, although I still expect it to create tradeable stopping power near 8262.25. Any higher and we would need to shift ‘A’ down to the marquee low at 4832. That would produce an 8557.50 target.  

Gold caught a favorable breeze on Friday for a change, but if you’re a long-term investor, I’d suggest enjoying the countertrend while it lasts. The initial breach of the 4372 midpoint Hidden Pivot support was sufficiently clear to imply that the 3800.60 target will be reached. It could turn out even worse, actually, since a bear-market low at 3606.40 is technically possible if you slide the pattern’s point ‘A’ high up to the record (one-off) at 5493, recorded on March 2. And don’t get too excited if this bounce continues all the way up to the green line (x=4617.00), since that would trigger an appealing short (stop 4954.00).

Sellers struggled harder in GDXJ to break down the midpoint support (p=110.36)  than in either Silver or Gold futures. That makes its chart more bullish, but not much. We should therefore infer that the bear market will resume, and that GDXJ will eventually fall to D=84.17 once this bounce is over. Of  course, let’s also allow for the possibility that the rally is for real by stipulating that a move exceeding May 29’s peak of 120.05 would put bulls solidly back in charge after spending more than three months in purgatory.

Yields on the Ten-Year Note have fallen sharply since getting within pitching wedge distance of the 4.75% target shown. It’s too early to say with confidence whether this is the beginning of a significant downtrend or just a correction that will eventually give way to a new upward surge. My strong gut feeling is the latter, but we may soon get to test that prediction if TNX continues down the green line (X=48.18. That would trigger a ‘mechanical’ buy signal with subsequent potential to reach p=44.90 or higher, an event that cannot but give us a definitive picture of trend strength.

I’ve flagged Hidden Pivot targets as low as 51.60, which would become no worse than an even bet following two consecutive monthly closes below 85.54 (basis the NYMEX August contract). This picture shows how an interim low near 75 hardly seems far-fetched, even for someone not adept at reading charts. Although I usually tune out head-and-shoulder patterns because they are nearly everywhere one chooses to see them, this one is so pretty that it literally points the way down to a basing target near the April 17 low where the pattern began.  This implies that any rally should be shorted, presumably at a midpoint Hidden Pivot resistance. That actually occurred  Friday morning at an 85.22 pivot whose provenance is proprietary.  The theoretical trade ended the day significantly in the black, but it would be validated if the end-of-day weakness we saw continues down to 77.60, the ‘D’ target of a minor pattern on the hourly chart.