Monday, April 4, 2011

A longstanding Hidden Pivot target at 108.53 was achieved on Friday, but because the futures closed above it we should infer that an even more ambitious target at 114.44 is now in play.  We'll use it as a minimum upside objective for the near term. On the hourly chart, it can be found by using as a point 'A' the 91.97 low recorded on February 17.

Just inches to go for the futures to poke above a key peak at 38.180 recorded on March 24.  That would refresh the bullish impulse on both the daily and intraday charts while lending authority to a 41.275 target broached here last week for the first time. More immediately, a push above the March 24 high would telegraph upside over the near term to at least 38.855, the Hidden Pivot target of a lesser trend (30-minute, A=35.760 on 3/22).

The futures are having difficulty getting past the 1442.30 midpoint resistance associated with a  1473.10 'D' target, but the target will remain valid nonetheless as long as 1411.50 (aka point 'C') has not been exceeded to the downside.  A two-day close above 1442.30 is needed make the move to 1473.10 an odds-on shot.  In the meantime, we should use a lesser pattern with a 1427.50 midpoint (already exceeded) and a 1441.40 'D' to gauge buyers' mettle.

Friday's nasty head-fake sputtered out two ticks beneath the 76.63 Hidden Pivot I'd flagged as a rally target last week. The thrust conspicuously failed to get by a look to-the-left peak recorded several weeks earlier on the way down, furthering the suspicion that buyers are lacking in guts, enthusiasm or perhaps both.  In any case, the burden of proof will remain with the bulls.

The futures appear too aware of mid-February's 1337.75 peak to yield a by-the-numbers short at either of two Hidden Pivots lying slightly below it.  I wouldn't mind attempting the short with camouflage if buyers pop this vehicle above that peak, but it'll be a game of cat-and-mouse otherwise, particularly if we are intent, as we should be, on holding theoretical risk to an absolute minimum.  One way we could attempt to wade into the trade would be to try and get long for the last-gasp rally that is possible here.  Most immediately, that would imply bidding down near the 1321.50 'd' correction target shown in the chart.  This is a so-so opportunity because of the too-obvious structural lows etched into the pattern on Friday, but if you're game, use a 1321.75 bid with a 1.00-point stop-loss.

Shortly before 3 a.m. EDT, bullion quotes were moderately higher while index futures were unchanged.  In neither case was price action sufficient to allow a confident prediction about Monday's opening.