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From the monthly archives:
November 2010
Let’s spare ourselves any ambitions in this vehicle today, since the minor-cycle ABCD rally begun yesterday left a gap that no bull could have traded. The presumptive finishing stroke projects to 1204.25, but that Hidden Pivot resistance holds little promise for shorting because it lies so close to a 1205.75 peak from November 15 – peak that seems likely to tempt breakout traders.
Silver did everything bulls might have hoped for yesterday — did those things so well, in fact, that gold may find silver’s upward pull magnetic over the near term. While gold narrowly missed creating a bullish impulse leg on the hourly chart, silver created a robust one with the potential to reach 27.780 over the near term. Please note as well that there is an important midpoint resistance between here and there at 27.685, and if it’s easily brushed aside, bulls should take strong encouragement. A close above it would put in play the 30.385 target of the large pattern shown in the chart.
For all of the exhilaration bulls may have felt yesterday, it must be noted that the rally failed by a potentially crucial point-and-a-half to surpass a key external peak at 1364.30. We’ll give the bulls another chance today, however, since they were in the process of creating a 1366.00 target early Friday morning. If it’s reached, more upside to at least 1378.40 would become a safe bet. That is the Hidden Pivot midpoint of the large pattern shown in the chart.
Technically speaking, Copper has taken a much harder hit recently than Gold and Silver. Is this where they finally part company? We could know soon, since the December contract is tracing out a downtrending abc with the potential to produce an analytically telling Hidden Pivot midpoint support. I’ve drawn a few hypothetical price bars to illustrate this in the accompanying chart. You should stay tuned in any event, since the pattern looks likely to develop in a way that could yield a low-risk entry point for bottom-fishing traders.
Readers of these commentaries will already know that I don’t like to go too terribly far out on a limb when forecasting bullion’s next leap. I’ve always preferred to forecast long-term trends one predictable step at a time – a cautious but reliable way of seeing things that has attracted many like-minded subscribers over the years. There have been times when this approach contrasted sharply with my dire outlook for the economy. In the late 1990s, for instance, the column that I freelanced to the Sunday San Francisco Examiner was probably the most bearish rant published regularly in a big-circulation newspaper. Examiner readers would not likely have imagined that, on the guru side of my life, I was getting things consistently right in a stock-and-commodities letter that went out each day to professional option traders. I got it right because, rather than follow my » Read the full article
A recent graduate of the Hidden Pivot course, Paul Hoffman, has developed a regimen of exercises that he has found useful in honing his trading skills. Here it is:
I think it would be useful to the newbie and also to more experienced traders to design a series of exercises to get used to the Hidden Pivot Method. Some of them you have already suggested and I am sure there are better ones than mine. For most traders, and I include myself, the problem is not finding entry spots, but rather, trade management and follow-through with judicious, pre-planned stops and exit points.
Here are some of the training exercises I’ve been using:
Day 1: Go thru all the charts, determining what opportunities, if any, each has to offer. This can be done by putting them in a directory, setting the display as images, and then using Windows to display them one at a time as a slide show.
Day 2: Review the charts again looking for ”big picture” ABCs
Day 3: Review at least two weekly tutorials in the recorded archive
Day 4: Using a tick chart or other low-level time frame:
— Determine the current impulse and C-D legs.
– Hypothetically initiate several trades at ’X’
— Determine a stop-loss
– Practice “time” stops, counting down 15 seconds from entry before re-setting the stop to avoid even a nominal loss
– Allow yourself to be stopped out or to exit at ‘P’
When I did this on a five-minute chart I netted $10 profit after commissions. The basic stop was a three ticks on the E-Mini
Day 5: Repeat Day 3, but use only second signaled point ‘x’ entry prices after ‘C’ has been stopped out
Day 6 : Repeat, except that instead of exiting at ’P', use a trailing stop from point ‘P’ and above
Day 7: Repeat, using a dynamic trailing stop as the target is approached
Day 8: Repeat, using a higher time frame to identify the opportunity and a lower time to initiate on ’camouflage’
The futures were wafting higher Wednesday night, up eight points at the moment, but the gain was attributable more to a lack of supply than to any apparent buying enthusiasm. Under the circumstances, we should ask no less than 1195.00 before we take the rally seriously, since that’s what it would take to create an unambiguous impulse leg on the hourly chart. Because the current impulse is bearish, we might consider shorts seriously for the first time in a long, long while.
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First, the ‘Good’ News…
by Rick Ackerman on November 22, 2010 12:01 am GMT · 25 comments
Last week’s financial headlines offered a study in contrasts. On the ostensibly sunny side of the news was the explosive evacuation coaxed forth by General Motors’ IPO. Economic optimists must have rejoiced at this spectacle, oversubscribed and charged with hubris as it was. Just like in the good old days, speculators and Wall Street bunko artists couldn’t get enough of a bad thing. Or are we perhaps being unfair to GM? At best, we’d say the jury is still out, given that it has taken $50 billion worth of Federal largesse to elevate the once-mighty automaker from basket case to dubious recovery story. Nowhere in the torrent of stories about the IPO was there even a word about the actual cars that GM builds. Not that this would be a concern on Wall Street, with its idiot savant focus on the deal itself. For the record, we’ll mention that the latest Consumer Reports is not exactly gung-ho on GM’s, um, product. Although the company has made strides in engineering and » Read the full article