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COMMENTARY for Monday
TODAY'S ACTION for Monday
Rick's Picks for Monday
Friday’s run-up in the last 30 minutes is being mildly regretted and repudiated Sunday evening, but it’s still too early to tell whether the weakness will pr0ve to have been yet another ruse for DaBoyz to accumulate stocks ahead of the next short-squeeze. I wouldn’t turn outright bearish, however, unless the selling hits 978.00 today, since that’s what it would take to create a bearish impulse leg on the hourly chart. In that regard, Friday’s weakness perhaps reflected nothing more than DaBoyz’ reluctance to attempt to punch through to a new level without sufficient “good” news to goose shorts. Night owls can attempt bottom-fishing at 995.50 with a stop-loss as tight as three ticks. The basis for this recommendation is shown visually in the accompanying chart. _____ UPDATE (4:06 a.m. EDT): My imagination failed me when I put out the analysis above, since tonight’s selloff has brutally exceeded all Sunday night shakedowns of recent memory. Traders who followed my advice would have been stopped out for small change. Now, you should be looking for a further fall to at least 984.25, implying that last Wednesday’s low at 985.75 is unlikely to hold. If and when it is busted, that will be step one (of two) toward creating a fresh and very nasty bearish impulse leg on the hourly chart. The selling appears to be for real and could turn ugly. It seems like more than a mere shakedown.
We shouldn’t read too much into the feints, whoops, glissandos and diminuendos of late, since, let’s face it, the futures have been stuck in a range since January. That said, they are about to squander a bullish opportunity if they fall below 942.10, the point ‘C’ low that followed the creation of an impulse leg of daily-chart degree in early August. That would foreshadow, not some killer leg down, but, more likely, yet another period of lazy buoyancy at a somewhat lower level. More immediately, the December contract could fall to as low as 933.00 if it smashes the 941.80 midpoint associated with that Hidden Pivot. (Note to pivoteers: A=961.30 on the hourly chart, August 14 at 9 a.m.)
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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.
SIDE BETS for Monday
I don’t much trust this bounce, since it came off a whipsaw low on Friday that had exceeded the previous day’s low by a single tick. However, if short covering should push the rally above 79.66 today, we’d become raving bulls, at least for the short-term.
Shorts were mildly on the run when Friday’s session drew to a close, but a somewhat bigger picture suggests the prospect of dueling impulse legs this week, with little net loss or gain over the few days. The first sign of trouble on the hourly chart would come on a print below 157.02.
Even if Silver goes nowhere for the next couple of weeks — a good possibility, I’d say — we should take longer-term encouragement from the fact that last week’s high, 15.185, exceeded a midpoint resistance on the daily chart by a whopping 12.5 cents. If buyers should take charge, though, pushing past 15.575 this week, that would be enough to set bears’ fur ablaze. _______ UPDATE (2 p.m.): Regarding the drubbing the Silver is taking today, my thoughts concerning gold apply: It is not the beginning of some hellish decline, but rather a sudden easing toward buoyancy in a somewhat lower range. _______ FURTHER UPDATE (2:54 p.m.) At the moment, with Silver trading 14.020 off a 13.820 low, I am expecting a tradable bounce from a little lower: 13.805, a Hidden Pivot that comes from the hourly chart. An impulsive turn from above that number, however, would be bullish for the near term.
Hidden Pivot Webinar & Tutorials
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Is Cash for Clunkers Our Economic Destiny?
by Rick Ackerman on August 17, 2009 12:01 am GMT · 15 comments
Although we had vowed to let the by-now tiresome inflation vs. deflation debate simmer for a while, it came to an unexpected boil last week after some provocative comments were posted by “Senor Cuidado” in the Rick’s Picks forum. Like us, the Senor finds it difficult to imagine how all of those printing-press dollars the banks are currently sitting on will find their way into the consumer economy. So far, the banks have recoiled from the idea of lending out their digital funny-money, using it instead mostly to purchase U.S. Treasury » Read the full article