I'm going to interpret this vehicle's immediate prospects as conservatively as Hidden Pivot rules will allow, paying close attention not to the big picture, but to the small one as defined by impulse legs on the daily and hourly charts. Right now, on the daily, the futures are in the process of forming an impulse leg that could eventually generate a follow-through C-D leg of as much as 26 points. It could be far more powerful, however, if buyers vault 1208 today, since that would open a path to a 40-point rally after this one has corrected. The accompanying chart shows the narrow segment of price bars that are relevant at the moment. By applying the rules rigorously, I aim to avoid getting fooled at this very crucial threshold, and to never be "wrong" about the trend for more than an hour or two. The accompanying chart shows subtleties that can only be explained with a very lengthy text that would bore you to tears. I have reproduced it nonetheless so that experienced Pivoteers can get immersed in the logic of it. I warned here earlier that bears had better prepare to hibernate if 1196.50 is exceeded, as has occurred. However, I am unwilling to give bulls the benefit of the doubt unless they earn it, and even though QEII may turn out to be a catalyst for Dow 20,000, however implausible that may seem.
Thursday, November 4, 2010
Crazy, not scary
– Posted in: Rick's PicksYesterday's wild ups and downs may have frightened the horses, but they should not have rattled long-term bullion bulls one bit. I've provided a chart in Silver that may come in handy for camo-savvy night owls, but Gold appears not to have left any such useful handholds.
SIZ10 – December Silver (Last:26.220)
– Posted in: Current Touts Free Rick's PicksYesterday's whirling-Dervish-of-a-ride left intact the pattern I'd used to project a minimum upside target at 25.440, or possibly 26.225 if any higher. The action was so violent that it will likely have left bulls and bears alike pretty frazzled. In theory, this suggests that we might benefit from a little more boldness than usual in searching out 'camo' entry opportunities. Unlike in gold, the futures have created numerous look-to-the-left peaks that you can use for a handhold on, for one, the three-minute chart (see inset). _____ UPDATE (4:03 p.m. EDT): Silver's carnivorous rampage today has exceeded my wildly bullish forecast, pushing the December contract up by $1.84 to beat the 26.225 projection by a nickel.
GCZ10 – December Gold (Last:1348.00)
– Posted in: Current Touts Free Rick's PicksFor all of the opaque tedium we experienced yesterday in the broad averages, bullion went transparently nuts -- ostensibly over the m-o-m-e-n-t-o-u-s and life-saving announcement of $800B (give or take) worth of QEII in the offing. The final bull's-rush at the end of the session recouped about half of the day's big loss, but fans of the yellow metal will be pleased to hear that all of the hysteria changed nothing in the immediate forecast, which remains bullish. A midpoint resistance at 1371.60 is still the number to beat, and a close above it would portend more upside to at least 1406.70. Night owls will not be able to bottom-fish the midpoint of yesterdays high-low-recovery high 'abc', since the pattern is just too gnarly. Nor will the lesser patterns work for boarding a 'camo' uptrend, since the one in progress as of around 7 p.m. Eastern has already used up the supply of 'look-to-the-left' peaks that conduce impulse legs.
