Silver Wheaton will remain vulnerable unless it pops above 40.39 over the next couple of days. Otherwise, a corrective pattern projecting to as low as 33.90 should be regarded a worst-case possibility for the near term. The downtrend has not yet gotten close to the 36.50 midpoint linked to that target, but if and when it does, it will make an opportune spot to try bottom-fishing with a tight stop-loss. For now, we’ll let our position ride: long 800 shares with a cost basis of 14.27 against eight January 34 puts we acquired for 0.77
From the monthly archives:
December 2010
DaBoyz were unable to squeeze much out of Sunday night’s opening bar, which peaked just a couple of points above Friday’s manipulated, rosy-looking high. However, They have allowed only a shallow pullback since, and we should therefore expect Them to keep trying as the night wears on. They’ll have a ‘D’ Hidden Pivot at 1250.25 to shoot at — 7.50 points above the so-far peak at 1242.75. As of around 10:20 p.m., camouflage opportunities appeared limited, since even on the two-minute chart the last of them had been used up.
A modest, 40-cent thrust today to 29.295 would knock the bad guys for a loop, since that would turn all of the intraday charts bullish. The rally presumably would be a downpayment on a larger pattern projecting to 32.21. The midpoint resistance associated with that ‘D’ target is 30.01, and the higher number would be well in play if 30.01 were to be exceeded on a closing basis for two consecutive days.
Friday’s low occurred at 1372.70, just above where we’d sought to bottom-fish, and although the target itself remains theoretically valid, we’ll put it aside because it is no longer fresh. Starting the new week, the burden of proof still lies with the bulls, and they’ll need to push above 1401.50 to generate an encouraging impulse leg on the intraday charts. Even more constructive would be a two-day close above 1410.25, a midpoint resistance associated with a short-term rally target at 1448.00.
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I’ve drilled down to the 15-minute chart to display a nubbin of resistance (a.k.a. look-to-the-left-peak) along the otherwise cragless wall of Tuesday’s decline. It lies at 29.380, and we should ask that a rally exceed it before sounding the all-clear (better make that the “somewhat clear,” since we’re using a quite subtle directional indicator here). Notice that there are a few peaks from Thursday’s session to allow night owls to test the water, bottom-fishing with relatively little risk.
The futures lunged three times yesterday on the hourly chart, but none of the thrusts was sufficient to clear even a single external peak. They’ll have another chance to get out of trouble today, but it will take no less than 1396.90 to put the bad guys on the run. If, instead, yesterday’s 1395.60 peak endures, you can try bottom-fishing at 1366.20, stop 1365.90, my worst-case target for the next 2-3 days. (A second pivot that is shown in the chart could turn the futures higher from 1370.90, but bottom-fishing there would be somewhat riskier.)
Although Rick’s Picks is designed to look like a horse player’s tout sheet, subscribers will know that I don’t often feature hot tips. I made an exception for Phil Calderone’s hot tip on Kodak because Phil has produced some timely winners in the past, and because the stock had been working on a bullish flag for a month. This tip will have paid off well for anyone who took it to heart. Pivoteers may have noticed that the stock’s impressive leap yesterday stalled precisely at a ‘D’ target (shown). EK looks to be consolidating, and so I will pass on to you Phil’s latest update — and caveat emptor. He sees the stock as having entered the second of three stages that will take it to around $8 sometime in the first quarter of 2011. More immediately, and from a Hidden Pivot perspective, EK looked especially impressive yesterday because the thrust breached two “external” peaks on the weekly chart. That doesn’t necessarily mean it’s going to the moon, but it does strongly imply that any weakness in the offing should be viewed as corrective.
Slithering higher on zero volume Thursday night, the futures were doing what they do best: achieving gains that might have been denied them in the light of day. Pivoteers might notice that the shallow correction from Tuesday’s peak was actually sufficient to have recharged the futures for yet another flight of fancy. The implied rally looks too steep to believe — more correcting seems needed, visually speaking — but if Friday Follies produces a short squeeze nonetheless, you should use a Hidden Pivot at 1245.50 as a minimum objective. Its provenance and pedigree are shown in the accompanying chart, and it’s shortable with a three-tick stop-loss.
