April 2009

The downside target I identified in today's commentary is shown in the chart, with an AB impulse leg that looks pretty kosher. The actual target lies at 809.75, and it sibling midpoint at 834.25 has already been breached. Even so, and as you can see, it wouldn't take much of a rally to negate the point 'C' high of the downtrend. Given Microsoft's short-squeeze reaction

We missed the turn yesterday in Silver Wheaton, but there may be a way to catch the rally without risking much.  The chart I've included with SLW can be interpolated by subscribers who are comfortable with the "camouflaged" entry technique that I have emphasized in recent webinars and weekly tutorial sessions.  Have fun!

Yesterday's trade recommendations scored two dead-center bullseyes, each calling a rally top within a single tick.  In Gold, we were looking for the June Comex contract to leap sharply to 910.30. When the dust had settled, the futures had traded as high as 910.40, the peak of an $18 rally. Although the high fell just shy of the 911.90 print needed to refresh the bullish trend, it seemed a foregone conclusion the futures would get there, and soon, since they were maintaining altitude in after-hours trading following a weak pullback from the intraday peak.  Comex Junes were an opportune short sale for day traders glued to the 910.30 target; now, however, if they continue rising to at least 911.90 as we expect, bears had better run for cover. A more detailed forecast appears in tonight's touts section, so check it out.  June Crude's rally proved equally felicitous, since it peaked just a penny below a Hidden Pivot target we'd flagged at 49.93. The analysis had included a detailed trading strategy, given as follows: "June Crude appears to be making a turn from a so-far low at 46.72. The rally projects to 49.93...  [so] you can get short at 49.91 with a stop-loss as tight as 11 cents. Switch to a 15-cent trailing stop on a pullback to 49.58, and use 49.30 as a minimum objective."  In the actual event, after hitting the 49.93 target, crude sold off sharply to 48.52, yielding a maximum theoretical profit on the trade of around $1,400 per contract. In practice, a single contract tied rigidly to a trailing stop would have produced a gain closer to around $300. Frankenstein's EEG Now, with Friday Follies coming up, we hesitate to second-guess the broad averages, since they have been describing the kind of price patterns this week

The trade in June Crude is working nicely, since the futures topped this morning at 49.92, a penny from my target. If you shorted 49.91 as suggested, you're in at an unbeatable price and proftable on paper, since the futures have pulled back more than 20 cents from their highs. You'll be on your own now, but I'd suggest a stop-loss that would preclude a loss, then a 15-cent trailing stop if and when 49.60 is hit on the retracement.

Silver Wheaton topped a list of precious-metal buy recommendations sent out a few days ago by George Carson, a New Zealand forecaster using a technical system that he says has produced no bad signals going back two years. The "buy" was generated on April 17, but so far SLW seems reluctant to oblige. Indeed, by my runes, the stock looks vulnerable over the near-term to a fall to ____, a Hidden Pivot that lies about nine percent below these levels. If this occurs, I'll recommend buying 200 shares, no stop.

Short-covering seems to be losing its urgency, shorts their nervousness, increasing the odds that any breakdown could be swift and punitive.  If the E-Mini S&P target for Thursday is borne out, the Dow would be down around 200 points.

We hold the Sep 84-May 84 calendar spread four times for 3.45. It is a conservative bullish play, but there is growing downside exposure that we should take steps to neutralize. Accordingly, I'll suggest bidding

At yesterday's close the futures looked poised for a thrust to at least ____, a Hidden Pivot, but they'll need to push just a tad higher, to _____, to revitalize the bull trend begun from 865 three days ago. That wouldn't negate an 845.20 target we've been using as a potentially important correction low, but it would alter the odds significantly in bulls' favor.

The bear rally has assumed the demeanor of Mr. Hyde at the moment, not so much unpredictable as too skittish to frame calmly in one's crosshairs. Even so, we should expect the death dive begun in the final hour of yesterday's session to reach _____ if it trashes that Hidden Pivot's midpoint sibling at 834.25 Wednesday night.