Wednesday, April 13, 2011

Early Wednesday morning, the bad guys were having trouble promoting follow-through to Monday's selloff. It would take a pop today to at least 41.315 to put them on the run, but if the futures ease lower without having exceeded 40.565 overnight, try bottom-fishing at 39.665, stop 39.650. The provenance of this Hidden Pivot support is shown in the chart (inset).

Just a smidgen more and the futures will have recouped half of the $33 selloff from Sunday night's $1478 high. My hunch is if they can close above the 50% retracement level, which lies at exactly 1461.50, bulls will have the bad guys on the run come Thursday. In the meantime, you can plan on bottom-fishing at the correction's 'p' midpoint if it comes to resemble the one shown in the chart.  _______ UPDATE (3:23 p.m. EDT):  Anyone who used the chart as instructed could have caught the exact low of the day, a 'p' midpoint at 1452.00, based on the following coordinates:  A=1468.40, B=1445.00 and C=1463.70.  If you bought multiple contracts at the low, take profits on half the position now.  Set a fixed stop at 1454.80 for the rest, switching to a $6 trailing stop  once 1464.90 is reached.

The 1.4496 target aired here yesterday came within 0.0004 points of nailing the intraday high.  Where to now? The chart shows that the next thrust will be to 1.4556, subject to a possible stall at the 1.4487 midpoint. If you're looking for a place to board belatedly, a short pullback from a tick or two above the 1.4492 peak would be ideal. _______ UPDATE: The easy entry we'd sought was not to be, since price action near the 1.4500 high got pretty wild.  We'll back away for now, since bulls and bears may skirmish for the next day or two.

Steady but mild weakness obtained yesterday, but so far tonight the action has been all about half-hearted short-covering.  This has yet to produce an impulse leg on the 15 minute chart, let alone the hourly, suggesting that the better opportunity on Wednesday may lie in selling the rallies rather than buying the dips. As of around 2 a.m. EDT, however, there were no compelling targets to attempt it.

Bullion buyers were giving the bad guys a rough time early Wednesday morning. Touts for both Gold and Silver contain specific buying strategies, so night owls should check them out if things perk up in the wee hours.

Now that I’ve got your attention, let me announce that, after tomorrow, I'll be exiting the Deflation vs. Hyperinflation debate for a while. I’ve concluded there is little to gain arguing on the one hand with a guy who turns rabid whenever someone contradicts him, even in a friendly way; and on the other, with a preening narcissist who comes to argumentation in the same state of sexual arousal that Jeffrey Dahmer must have experienced hovering over the fresh corpses of teenage boys.  These guys are bad news, as lacking in civility and manners as buzzards in a scrum, and you'd do well to avoid them both.  You might try tuning instead to the hyperinflation arguments of Steve Saville, Peter Schiff and a few others who seem less concerned with trouncing, slicing and dicing opponents than with presenting facts that might better prepare you for the financial crisis ahead. The very best of them, in my opinion, is FOFOA blogspot, where the essays are erudite, the discussion elevated and the arguments as knowledgeable as any you will find on the web. ZeroHedge can be pretty informative too, provided the hairy-knuckled provocateurs who hang out there have been fed red meat within the last 24 hours. Not that FOFOA -- or anyone else, for that matter -- has won me over; for I remain convinced that deflation, not hyperinflation, will do in the economy. To understand why, I’d suggest following the mile-deep discussion thread that my commentary on the topic generated last week at Rick’s Picks. You’ll discover that there is no point on either side of the argument that is airtight.  Hyperinflationists can make you doubt most anything I might say, just as I can stir doubts about anything they might say.  That said, my biggest doubt concerning their side