Thursday, February 10, 2011

A 96.88 rally target that I first proffered a while ago is still valid, even if we've grown tired of waiting for it to play out.  In the meantime, we shouldn't overlook the very compelling trendline shown in the chart. It puts support today at around 85.77 on a slope that is rising a rate of about 0.075 points per day.

Without really knowing why, the futures went all funny as The 'Nank's testimony dribbled out onto the Web yesterday. As soon as the Street's trading algorithms recover their composure today,  look for the rally to continue to at least 1330.00; or if any higher, to 1335.25.  Both targets were given here earlier.  They are subordinate to a more important one at 1356.00 that (according to my friend Doug) apparently "everyone" has been expecting.  We'll want to get short up there, of course, but we'll do it with camouflage, not by standing in front of The Little Engine That Could.

Bulls sashayed up to the threshold of Tuesday's high yesterday but had to pull back for a running start to clear it.  This strongly suggests that the Bonds are not fixing to make a meaningful turn here on the basis of some vague notion that QE3 was ruled out by Heli-Ben's testimony before Congress. More likely is that the March contract will continue lower, to the megabearish 112^28 target given here earlier (see chart), and that long-term rates will climb well above 5% in the process. In the meantime, don't be surprised to see feints, head-fakes, foot-fakes and all manner of hysteria in the vicinity of 117^18, the midpoint pivot associated with the target.

Silver looked to be correcting early Thursday morning to a Hidden Pivot below $30, and so, for night owls,  I've detailed instructions for bottom-fishing.

A by now well-advertised Hidden Pivot ar 1379.80 is still my minimum upside projection for the short term, but if it gives way easily we could be looking at 1393.80 shortly thereafter.  The price coordinates that yield the latter target are shown in the accompanying, hourly chart.