Gold and Silver have slogged higher in holiday-weekend trading, with the former making better headway toward minor targets. I’ve provided charts for both, along with a hidden support that could provide a buying opportunity if August Gold swoons overnight.
From the monthly archives:
May 2011
July Silver is working on a 40.720 target, and it has looked like work every inch of the way (see inset) so far. The midpoint resistance associated with that Hidden Pivot is 38.470, about 8 cents above the highest peak achieved in holiday weekend trading, but it’ll have to be bulldozed to clear a path more upside to 40+.
As a result of Friday’s opening trade, initiated a single tick off the intraday high, we are short two contracts with a blended cost basis of 1347.00. Use a 1336.25 stop for now — and take consolation in knowing we can short this little sonofabitch whenever we please without getting hurt, just as we’ve been doing repeatedly for many months in anticipation of a perhaps inevitable market crash. FYI, although the 1336.25 print that would take us out of the position would fall just shy of creating a new, bullish impulse leg on the hourly chart, because it would do so on lesser chart, I’m using it as a hair-trigger exit signal. If my hunch is correct, any rally that gets past 1336.25 will get past the more obvious one at 1440.25 too. If you don’t subscribe to Rick’s Picks but would like to know how we identify price targets and attempt to profit even when we are “wrong” about the trend, click here for information about the Hidden Pivot Webinar in late June. You could also take a free week’s trial subscription that will give you access not only to detailed trading recommendations each day, but to a 24/7 chat room that draws experienced traders from all over the world. _______ UPDATE (2:21 a.m. EDT): We exited the trade on the stop, booking a theoretical gain of $500 on the trade. It would appear that DaBoyz have shorts — though not us — on the ropes early Tuesday morning, but if they can push this hoax a bit higher — above 1346.00 on a closing basis, to be specific — we can look forward to shorting again at 1387.50, a Hidden Pivot that would become an even-odds bet at that point. More immediately, night owls proficient at using ‘camouflage’ can attempt to get long on a b-c pullback from just above 1340.25. If the trade materializes, it looks like an opportunity you should not pass up.
August Gold’s steady rally is pushing past minor Hidden Pivots, albeit without much power, Sunday afternoon at around 4:45 p.m. EDT. My minimum upside target as of this moment is 1544.40 (see inset), and any breach of that resistance by more than four or so ticks would portend more upside over the near term. A close above it would be even more bullish, corroborating and affirming the 1594.90 target of a larger pattern noted here earlier. A swoon at any time to 1530.00 would be normal, healthy — and, perforce, buyable via camouflage — since that is the midpoint pivot associated with the 1543.40 target.
Just a little more downside, to 74.39, would create the first bearish impulse leg of daily degree in more than a month, but failing that, the Dollar Index looks like a good bet to chop sideways this week. This can be inferred from the “dueling impulse legs” that I have identified, respectively, using green and red arrows.
A 56.02 downside target remains valid, so continue to bid for four June 56 calls if our number is closely approached. A 55.87 stop-loss is appropriate. _______ UPDATE (June 6): Cancel the trade, since a new downside target at 55.54 looks more promising. I’ll recommend buying four July 57 calls if and when that number is closely approached. The new stop-loss should be at 55.38. Note: The turn could also come from 59.64, a secondary Hidden Pivot. _______ FURTHER UPDATE (10:08 a.m. EDT): Off a so-far low this morning of 55.45, we bought four calls @ 0.57. Maintain the stop-loss as given, since DaScumballs who sold us the calls have tipped us to their possible further weakness by opening them on a rapacious high. _______ FINAL UPDATE: We ditched the calls for a small loss when this little brick fell back to earth after rallying 30 cents from our entry point. The breach of the Hidden Pivot support, slight though it was, portends more weakness ahead. Bulls could reclaim the advantage, however, with a push on Thursday exceeding 55.77.
Like June Gold, July Silver’s bounce from a key midpoint support (at 32.300) is precisely what we should have expected if the long-term bull is about to regain momentum. However, the bounce so far has yet to create a bullish impulse leg on the hourly chart, raising the threat of a relapse with each new day spent noodling around. The picture would change significantly with a thrust that exceeds the three peaks shown, but until that happens we’ll need to remain cautious.
June Gold has been struggling too hard to inspire much confidence in the short-term picture. For one, it has so far failed to reach a 1536.30 rally target that should have been a piece of cake. And for two, most of this week’s gyrations have been just south of a 1528.70 midpoint (see chart) that is crucial to the short-term outlook. A close above it would likely send the futures on their way to the 1594.90 target broached here earlier, but if the heaviness of the last few days persists into week’s end, traders could take the path of least resistance and drive this vehicle lower come Monday. Meanwhile, the most bullish thing that could be said of this week’s rally is that it exceeded the 1526.80 peak from May 11, creating a solid impulse leg on the hourly chart. However, the next thrust will need to clear another, mentioned earlier, at 1543.50 to reinvigorate buyers.
I’m recommending that the short from 1358.25 be covered if DaBoyz kick off a pre-holiday short-squeeze today, as is their wont. Much as I wanted bragging rights for a mini-position that produced a profit of $5000 per contract, I’d rather not see all of the paper gains we’ve made so far go up in smoke for reasons of my stubbornness.
We remain short, effectively, from 1363.00, and are shooting for a gain of at least $5000 per contract. I am going to suggest covering the short, however, if the futures poke above 1334.25 today. That is where I would place a stop-loss on a scalp-short at a lesser Hidden Pivot resistance at 1333.50. This was a tough decision, since I still think there’s a good chance the 1358.25 pivot where we initiated the position will survive. However, because holiday seasonality will give DaScumballs a great opportunity to ream bears a new orifice, I’d rather come away from the trade with a $700 or so gain per contract than see all our gains get taken away. If I had it to do over again, I’d have covered at the 1303.25 target — which was all but certain to produce a big bounce — and re-shorted the rally. If you want to hang tough for a few more points, I’ll suggest covering the short on a print above 1340.25, an important peak recorded May 20 on the way down. That’s where trouble for shorts would really begin. _______ UPDATE (12:27 pm. EDT): Half of any shorts from 1333.50 should have been covered, since the so-far 3.50-point pullback from our entry price is more than three times the 0.75 points we risked on the initial stop-loss. Keep a fixed stop for now at 1334.25. My strong gut feeling is that DaBoyz are not going to waste a pre-Memorial-Weekend-Friday opportunity to squeeze shorts. _______ UPDATE (1:05 p.m. EDT): With about an hour to go, the three-tick stop-loss is holding (!), so we are now short one contract from (effectively) 1363.00, and another (effectively) from 1335.75. For now, raise the 1334.25 stop-loss on both to 1340.50. Don’t be surprised if DaScumballs, abetted by a million Nervous Nellies, shoot for a new top before the bell.
