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COMMENTARY for Monday
TODAY'S ACTION for Monday
Rick's Picks for Monday
Shortly before 8 p.m. Sunday, the futures looked like they were struggling to go lower — which is as it should be if the dominant trend is robustly bullish. The minor correction so far has bounced precisely from a hidden pivot midpoint at 977. 70 (actually, a moment later, when I took a snapshot of the chart, it finally broke the support) , but I wouldn’t recommend buying there on a re-rest. Less risky would be to bid 975.60 overnight, stop 975.30. If the futures take off without deferring to our bid below the market, you can try entering on a “camouflaged” impulse leg that tops somewhere between the two minor peaks that I’ve labeled in the chart. _______ UPDATE (7:08 a.m. EDT): The 1066.40 target drum-rolled in today’s commentary is very much in play now that its sibling midpoint at 985.20 has been eclipsed by nearly five points. A two-day close above the latter number would all but clinch it.
Friday’s nasty short-squeeze in the final minutes of the session handily exceeded a Hidden Pivot resistance at 922.00, paving the way for more of the same Sunday night/Monday morning. The futures were up moderately around 10 p.m., presumably developing thrust for a leap to as high as 940.75 The midpoint resistance associated with that number lies at 928.75, but it’s not worth much for trading purposes because a print there would be a breakout above Friday’s high. From a big-picture perspective, the two peaks to beat lie at 938.25 and 1002.75. Both are shown on the accompanying chart, and if they are exceeded impulsively (i.e., by a rally with no b-c pullback), even the most ardent bears will have to rethink their case — or get out of the way.
We shorted four June 10 calls on Friday’s opening for 0.80 (off a 0.70 limit!), effectively legging into the September 10-June 10 calendar spread for a 0.10 credit. Although we cannot lose money on this position, it has the potential to produce a gain of as much as $520 or so if SLW is trading close to the $10 strike when the June calls expire on the 19th. Now let’s see if we can build in a little more edge, bidding 0.25 for four July 12.5 calls (SLWGV), day order.
A Hidden Pivot at 68.05 identified here earlier is still my minimum upside objective, but it is also a potential swing high that can be shorted with a stop-loss as tight as 21 cents. Please note that there is an alternative target at 67.67, but a short at that price looks somewhat riskier to me than one initiated at the higher number. I’ve included a chart that shows how both targets were derived. _____ UPDATE (6:11 a.m. EDT): The stop-loss proved too tight by three cents — an error in judgment that you should make a mental note of, since your instincts are probably better than mine when it comes to calculating a stop-loss for this vehicle.
July Silver has backed off just a tad shy of the 15.975 target shown in the chart. It’s an important one, and well-defined, so a decisive breach over the next day or two would be very bullish for the near term.
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Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
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Gold Set to Ram $1000 Barrier Again
by Rick Ackerman on June 1, 2009 12:01 am GMT · 10 comments
The dollar’s bounce last week from a Hidden Pivot support that we’d drum-rolled here lasted all of four days, suggesting that more weakness is on its way. If so, we should look for gold quotes to blow past $1,000 by no later than mid-week. Our immediate target for the August Comex contract is 1066.40, subject to a “hidden” resistance just above at 985.80. » Read the full article