Monday, January 3, 2011

There is such graceful power in the pattern shown in the chart that we should have little doubt that our 32.285 target is going to be reached over the near term.  However, we'll want to monitor price action there closely, since the failure of that Hidden Pivot to contain bulls, at least for a while, would lend weight to arguments that significantly higher prices lie in store for Silver. At the very least, it would portend more upside to 33.710, a target that comes from starting the impulse leg from the lower point 'A' shown.

With 2010's robust finishing stroke, the futures pulled away from the 1401.90 midpoint resistance associated with our short-term rally target at 1442.10.  However, because Friday's peak merely equaled a look-to-the-left peak recorded December 7 on the way down, there were no camouflage opportunities to get long Sunday night, at least not on the hourly chart.  The pattern shown can serve for analytical purposes, however, and so we should infer that the breach of its 1419.70 midpoint resistance implies more upside overnight to at least 1424.90.

Over the 19-month course of this epically mindless, corrupt Mother of All Bear Rallies, I've tried to discourage permabears from feeling such debilitating emotions as fear, anxiety, remorse or, heaven forbid,  h-o-p-e, and that's why I've hung out a bracing monthly chart of the Dow today.  It shows how little would need to happen to leave bulls decisively in charge for yet more weeks or even months.  Coldly mechanical detachment is what is called for right now, not opinion, so buck up and face the simple, stupid facts if things don't quite go our way in the days ahead.

The accompanying chart shows why the picture will turn ugly for permabears if the Indoos should touch 11868 -- a tad less than 300 points from here --  within the next day or two. That would refresh the bullish impulse on the monthly chart, presumably lending buoyancy -- and authority! -- to the 21-month uptrend for weeks or even months to come.

In yet another burst of psychotic exuberance, the futures are up nearly eight points late Sunday night. We can still try shorting 1262.75 and/or 1265.00 with very tight stops, but these trades are now recommended for night owls only, since I'd rather not risk getting in the way of an opening-bell stampede if that is how Wall Street's crooks, clowns and child molesters intend to kick things off in 2011.  If both of those Hidden Pivots are swept aside, expect the silliness to continue to at least 1273.75 (also shortable, stop 1274.25), at which point the Dow Industrials will be up about 150 points.

(Fearful of spooking readers and angering advertisers, mainstream news sources have been reluctant to tell it like it is when reporting on the economy. Because they remain steadfastly in denial four years into the Great Recession, touting a recovery that has touched relatively few American lives, it could be a long time before we hit bottom, says Gregg White, a regular contributor to the Rick’s Picks forum who goes by the handle “3 Lions”.  In the essay below, Gregg says the news media will have its hands full trying to put a happy face on things when America’s economic troubles deepen and spill out onto the street, as has already occurred in Europe. RA) The mainstream press and TV business news channels are “paid to be happy” by advertisers and politicians. In some respects they are no different from the official ratings agencies like Fitch, which are also paid to “rate happy.” Having been proven to be worthless over the last several years, the ratings agencies are just beginning to get a bit more realistic – a glimmer of realism, no more. They now know that if they are seriously caught with their pants down again their whole raison d’être will be called into question. The appointment of Ron Paul as the official “hammer” of the FED is another glimmer of hope. At the moment, it is just a small snowball rolling down a mountain, but it is gathering more snow as it rolls. The ratings agencies must have noticed that complacency and deceit are gradually becoming unacceptable. As for the mainstream press, which by and large is bankrupt, a publication’s survival is less likely than a ratings agency’s. Pick up any regional or local newspaper, scan all of the positive editorials over the first three pages, and then turn