The carnage has been worst in silver, down 43 percent from high to low since peaking on St. Patrick's Day. Platinum has fallen nearly as much, 40 percent, trailed by gold, off 26%. We wish we could assure readers that the worst is over for this correction ' and it's possible that it is, given that September Gold on Friday bottomed within a dollar of the 778.80 target sent out to subscribers the night before. But Silver looks like it has farther to fall, and September Crude at Friday's lows was still hovering 9 percent above an interim, bearish target at 101.12 that we gave a while back. Under the circumstances, the best we might hope for when the new week begins is a final washout in Silver that brings it down to our target, with Gold resisting Silver's pull and merely retesting last week's low, 777.70. Even if this scenario doesn't pan out, however, we needn't guess about whether the downtrend has exhausted itself and is about to reverse. The Hidden Pivot rule we use to keep from getting fooled is simple and straightforward: Trend reversals always begin with an 'impulse leg' that exceeds at least two prior highs or lows. There are some subtler shadings of the rule that allow us to predict the strength and longevity of the new trend based on whether the highs/lows that have been exceeded are 'internal' or 'external.' But even when applied in slapdash fashion, the two-peaks rule cannot fail to tell us when the trend of a particular time frame has changed. Applying it to the current picture in gold, bulls would be back in the driver's seat, at least for the near term, if, without taking a corrective breather, they are able to push the December contract past the two peaks
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