Wednesday, June 29, 2011

There are subtle signs of strength worth heeding in the chart that accompanies today's Silver tout. The chart is not for novices, but it should make sense to more advanced Pivoteers who take the time to study it closely.  And by the way, there may even be a trade in the pattern if it develops as shown.  (Click here for a free trial subscription and access to the 24/7 chat room if you are unable to access the chart.)

Shortly after 1 a.m., Silver has gone bullish on the 30-minute chart (although not on the hourly), having surpassed no fewer than two internal peaks and two externals.  The bigger picture remains too bearish to buy aggressively at these levels, but I've sketched out a camouflage possibility that would at least cut risk down to size.  In this case, there were two choices for the k-A segment, but I've used the longer one just to be certain the futures have gotten a good rest before they attempt a C-D follow-through. The minimum retracement is calculated at 33.975 -- still a tad below the so-far correction low at 34.050 as of around 1:15 a.m. EDT.

August Gold continues to flirt with an important midpoint Hidden Pivot support at 1503.10 whose decisive breach would portend more weakness down to at least 1446.90. As noted earlier, it would take a thrust exceeding the small peak at 1526.50 made last Thursday on the way down to stoke buyers and turn the hourly chart bullish again for the first time in weeks.

Shifting to the October contract, there are two patterns -- one big, the other bigger -- that on the weekly chart yield targets at 29.31 and 29.49 respectively.  Although these Hidden Pivots are likely to exert a magnetic pull on the futures, drawing them at least to that level, they are just as likely to show some stopping power that could initiate a serious correction.  Thereafter, an even bigger-picture target at 33.600 would be our minimum expectation for the bull market begun in May of 2010 from around 14 cents a pound.

On rare occasions, Rick’s Picks will offer a 30-to-1 horse to subscribers who want to take a flyer. This time, it is Kodak that is the object of our greed. The stock has been trading erratically on the prospect of a favorable settlement of a patent case brought against Apple and Research in Motion. Winning the lawsuit would be a big score for Kodak, since licensing fees worth as much as a billion dollars are at stake.  Not bad for a company that almost went out of business because it failed to foresee the digital revolution in photography. Because the Rochester, NY firm still holds 11,000 patents, more than a thousand of them in digital imaging, its very survival hinges on aggressive licensing of intellectual property. Although we have no strong feelings right now about EK shares, a longtime reader of ours who sometimes sends us hot tips thinks “EK to win” looks like a good bet. The tipster, Phil C., affirmed his enthusiasm yesterday in an e-mail that we duly conveyed to subscribers in the chat room. (Don’t subscribe? Click here for a free trial.) The breathless subject header read as follows: “Two-Minute Warning, Crunch Time. Ninth Inning”. As for the message itself, it was bursting with hopefulness, although understandably lacking in guarantees: “Whichever sport you choose, this is the crucial time to take maximum advantage of the opportunity in EK. Either a settlement gets announced at any moment, or the ITC rules after Thursday's close in the US. I believe the chart says the stock is going higher. The catalyst of the decision/settlement only determines how fast and to what level the stock rises? As indicated previously, $5 is the short term minimum target. I now believe that in the intermediate term $6 is possible with an eventual

The k-A segment – bane of the Hidden Pivot novice but ultimately of little concern in most trading or forecasting – gets a workout in this session, since we stumbled on several instances in which the “window calculation” was not only useful but necessary. There is also a segment delving into the failure of gold and silver to generate bullish impulse legs on the lesser charts since the correction began from early May’s highs.