Wednesday, April 6, 2011

An important target at 41.275 remains my minimum upside objective for the near term, but you should look for a possible stall at 39.790, the Hidden Pivot target of a lesser pattern. Its sibling midpoint lies at 38.930, so any swoon to that number or somewhere near it should be viewed as a possible buying opportunity.  _______ UPDATE: The forecast came within a single tick of nailing the day's high, 39.785. If you got a ride to the top -- or shorted it -- treat yourself to a Havana.

Now that's more like it.  June Gold yesterday obliterated all resistance points I'd noted previously, leaving only a Hidden Pivot at 1473.10 to challenge buyers over the near term. This target would appear to be a lock, but with the rally in near-vertical mode it won't be easy to hitch a ride, even with the subtlest attention to camouflage opportunities.

Shortly after 3 a.m., the futures were in their umpteenth feint toward a 1336.50 target that I've drumrolled to death. The short I'd recommended from a lesser pivot at 1335.25, stop 1336.25,  is still valid, although I am not expecting it to do anything magical.  DaBoyz are clearly looking for some piece of news, any piece, to put the squeeze on shorts. If a shutdown of the government is not sufficient to trigger the requisite exuberance, then perhaps buyers really are running out of steam.  _______ UPDATE:  The futures topped at precisely 1336.50 then sold off moderately, falling so far to 1326.75.  While it would be nice to think that we have caught the exact top of the Mother of All Bear Rallies, we'll just have to wait and see.

The trajectory of Silver's bull run is so much steeper than Gold's that something's got to give. My hunch is that the divergence will be corrected more gently than some might expect, via moderate weakness in silver and a corresponding, moderate steepening of gold's bull market. Even so, the divergence could widen over the near-to-intermediate term, and I'm not going to worry about a possible correction until such time as these vehicles hit Hidden Pivot rally targets or significant C-D midpoints.  For GDX, the two such numbers lie, respectively, at 61.37 and 70.28.  Since GDX is currently probing the lower number, we should turn cautious at these levels. I expect it to be exceeded shortly, but we should verify with hourly readings nonetheless.  With respect to SLV, on the weekly chart shown, it's approaching a muddy 'D' at 39.04, but more upside to at least 42.10 is indicated if the lower number is decisively exceeded.

An inquiry in the chat room yesterday concerning the outlook for this vehicle sent me to the weekly chart, which shows two patterns projecting, respectively, to 661.07 and 720.13. Notice in the chart (inset) that the "sausage" peak recorded in December at 516 necessitates the use of the one-off 'A'.   The larger pattern yields a 541.69 midpoint; the smaller, a resistance at 576.55.  Both numbers should be held in mind as possible buying opportunities on a pullback.  I've set a screen alert, but so should you -- and I'd also be grateful for a nudge in the chat room, since I don't track this vehicle very closely.

Today's touts include a comparison of long-term charts for SLV and GDX, tied to a prediction that the steep divergence between them cause by Silver's rampage will be corrected more gently than some might expect. There are also some specific pivots noted, along with a cautionary note in SLV, which on Tuesday hovered at an important midpoint resistance.