Tuesday, March 8, 2011

It's a struggle to believe that this tedious, two-week hacking-cough-of-a-consolidation is going to produce anything resembling the moon shot we might expect after so lengthy a pause.  Assuming the futures go lower in the first place, my minimum expectation would be 11921, the 'D' target on the pattern shown. It can be bottom-fished with a stop-loss as tight as four ticks.  ______ UPDATE (2:11 a.m. EST): The futures have slithered up to a so-far high at 12141, but if they hit 12156, short there with a three-tick stop-loss -- better yet, short 12155, a tick below the Hidden Pivot, with a four-tick stop-loss.  Best bet: Start looking for a camouflaged downturn when 12151 is reached.  ______ UPDATE (9:15 a.m. EST):  The futures topped overnight at 12148 -- seven ticks from our offer -- before plummeting back to 12062, so officially we did nothing.

The correction off yesterday's highs was struggling to reach a 35.465 pivot around 10 p.m., and, as is the case with gold, the longer it takes to reach, the less compelling the target will become as a place to try bottom-fishing. That's assuming it will be reached at all;  but if  not and the futures thrust higher, the best place to look for a minor pullback and subsequent entry signal would come following a breach, by a tick or two, of the look-to-the-left peak shown. _____ UPDATE (3:29 p.m. EST):  Silver's pullback was a little milder than Gold's. Whereas the latter reached a 'd' correction target and then some, the former turned higher without having gotten to a corresponding target.  Now, a spirited recovery is under way following the day's $1 up-and-down seesaw, and it is bringing into focus a rally pattern with a midpoint resistance at 36.125 (5-min, A=35.51 at 1:20 a.m.) that has been breached as of this moment.  A close above it would augur a quick move to its 'D' sibling, 36.645.

The 1459.10 rally target given here yesterday remains valid even though the futures made little headway yesterday.  Meanwhile, the correction in progress as of around 11 p.m. EST pointed toward 1424.40, since the midpoint support at 1431.10 has been decisively broken. The target can be bottom-fished if the downtrend hits it within the next two hours or so, but any longer than that will suggest bears don't have the votes to take this vehicle down.  Night owls and camouflageurs should drop down to the five-minute chart to get long following any legitimately impulsive thrust (and of course, the subtler the better).  ______ UPDATE (3:24 p.m. EST):  Gold eventually bottomed at 1423.60, less than a dollar from our correction target, but it took so long to get there that I have assumed my advice went untraded. A rally since has gone as high as 1431.90.

The Gold Bugs Index is advancing on a 588.31 target that would have been a piece of cake were it not for a series of peaks just below the all-time high at 598.36.  Looking at a much big picture (see inset), there are two numbers we should jot down:   661.07, a 'D' target that could be described as "minor" only in the context of the monthly chart: and 634.64, the maximum high that can be inferred from the monthly chart.  They both look like high-probability bets, although it would imply a minor-trend extension of the major trend to reach the higher target.

A predicted fall to at least 1286.50 looks to be on-track, since yesterday's close was beneath the 1311.50 midpoint sibling of that Hidden Pivot.  Shortly before 10 p.m. EST, there was a smaller bearish pattern developing that projected to 1289.25.  Since just a small upward feint could destroy it, I'll suggest checking out the chart I've provided before you consider a camouflage short.  _______ UPDATE (1:59 a.m. EST): I couldn't find any news to explain how the night-shift dirtballs have been able to short-squeeze this gas-bag a laughable 8.25 points, but that's what working the night shift is all about -- i.e. picking up the scent of information that has not yet been widely disseminated.  So far,  this con game has gotten the futures to 1317.50, the exact Hidden Pivot target of the pattern (5-minute) A=1304.25, B=1313.75, C=1308.00; however, if they go any higher, a minimum 1319.00 would be indicated.  That is the end of the line on the five-minute chart, and, like 1317.50, it is short-able with a very tight stop-loss.  The short would not be a high-odds play, though, since the thrust would be impulsively bullish on the lesser intraday charts due to the 1317.75 look-to-the-lefter made yesterday morning around 10:30. _______ UPDATE (9:11 a.m. EST):  The laughs reached a crescendo when the futures topped overnight at...1318.50!  Officially, a miss is as good as a mile, so this miss left us officially two ticks shy of getting short at the top.

Last week's tips on how to prepare for a possible food shortage elicited many interesting responses, including one from "self sufficient prepper-survivalist" Mark Steel, a retired Navy veteran who describes himself as an "old-timer."  His heavily-trafficked web site is loaded with many fascinating and  insightful articles that he has written over the years.  For a look at www.Back2theLand.com, click here.