Silver’s rally into the close was unpersuasive, although bulls nonetheless held a slight edge at 9:30 p.m. EDT attributable to the creation of a tiny impulse leg yet to be negated. The still unachieved target of a somewhat larger pattern is 35.740, but as you can see in the chart, the futures will need to go one tick better to create a new impulse leg that would refresh the uptrend.
From the monthly archives:
June 2011
The futures are down slightly in night trading, presumably to give the boys running run to stick it to shorts again on Wednesday. Night owls can try bottom-fishing at 1279.00, the ‘D’ target of the retracement pattern shown. Its sibling midpoint may endure even though it has already been exceeded by two ticks, but any further slippage would likely send the futures groping for traction down to the 1279.00 target. Since there’s a coincidental structural low at 1279.50, camouflage is the preferred method for getting long here. Keep in mind that the futures need only hit 1290.25 today to be in a position to bully bears until week’s end or longer. _____ UPDATE (2:23 a.m. EDT): The futures took a feeble, 2-point bounce from the 1279.00 pivot and then relapsed to a so-far low three ticks beneath it. I’d suggest exiting now for a small profit, since the slight breach hints of further weakness ahead.
For proprietary reasons, I did not display in today’s commentary a weekly chart of Bank of America that shows so clearly why it is headed for the zero axis. The chart is included here, however, so that you can see for yourself how compelling the technical picture is. What is surprising is that we have heard so little about evidently grave problems at the bank as its shares have fallen by more than 80 percent. A silent crash? The chart speaks for itself.
There are some important structural supports near 490, but if they are breached on a closing basis, we should brace for more downside to as low as 469.94. The 513.32 midpoint support associated with that Hidden Pivot has already been crushed, warranting a bearish bias for now.
So far, the selloff from June 1’s 1342.50 high is uncorrected after exceeding three prior lows on the daily chart. This is plenty bearish, but it would grow even moreso if the downtrend were to breach the St. Paddy’s Day low at 1237.50 without any intervening rallies of at least two days. Skidding action such as we saw yesterday seems incapable of generating a strong rally, so we should look to get short on any feint higher. Camouflage is the best way in, and, as of around 10:09 p.m. Monday EDT, the five-minute chart looked like the ticket for a very low-risk play. Camouflage aside, a decisive push past a 1270.75 midpoint resistance could yield a shortable ‘D’ at 1276.75. _______ UPDATE (4:32 a.m. EDT): It’s hard to know exactly what is being celebrated tonight, but DaBoyz have trapped bears in a nasty short-squeeze that so far has exceeded my 1267.75 target by two points. The move is impulsive on the lesser charts, but it would take only a further 5 points, unpaused, for this spree to rack up two more external peaks, turning the trap into a boodbath. FYI, the hourly chart would turn decisively bullish today at 1290.25, setting the stage for a romp into week’s end.
Today’s tout for July Silver ponders the unthinkable with two very bearish targets that we had not hitherto imagined. If you don’t subscribe but would like to know nonetheless how bad things could get, click here for a free seven-day trial to Rick’s Picks that will also allow you to enter a 24/7 chat room that draws veteran traders from around the world.
My minimum downside objective for the near term is still 34.160, a Hidden Pivot that you could bottom-fish with a stop loss as tight as three ticks. However, given Silver’s recent failure to generate a fresh, bullish impulse leg on the daily chart, we should begin to think the unthinkable. Assuming no bullish turnaround is at hand — it would take a pop above May 11’s 39.470 peak to get one underway — the less painful of two bearish scenarios calls for a reversal rally from 31.205, a midpoint support of the pattern that uses the higher of two B-Cs shown in the chart. The next-worst-case low, using the lower B-C, yields a midpoint support at 30.215. Finally, as absolutely worst-case numbers, we have the ‘D’ targets of those two patterns at, respectively, 22.94 and 21.58. That last number would imply a 57% correction from the May 2 high near $50. My gut feeling is that we will not see the worst and that Silver’s resurrection will come at 30.215, the lower of the two midpoints. But even at that, the July contract would have a further $4.70 to fall, or about 13.5 percent.
Yesterday’s moderate selloff exceeded the respective ‘D’ targets of several minor patterns, leaving but one for Tuesday: 1507.00. Its somewhat obscure provenance is shown in the chart, but if this Hidden Pivot is exceeded today, our focus would shift to the 1498.80 midpoint of a larger pattern (A=1576.50 on May 2, hourly chart). That’s an important number, since a two-day close beneath it could spell more weakness in the days ahead to as low as 1442.60. Alternatively, it would take a print at 1538.10 to turn the hourly chart bullish again.
A recent appelate decision in New York is precisely in line with the trend, noted in today’s commentary, of the courts siding with homeowners who have challenged foreclosures. Click here for the full story.
Timid Rally Brings Little Joy to Mudville
by Rick Ackerman on June 15, 2011 2:21 am GMT · 10 comments
Stocks got a lift yesterday from retail numbers that supposedly weren’t as bad as economists had expected. Sales dropped “only” 0.2% last month versus economists’ dartboard expectation of a 0.6% decline. Because it was merely a bunch of economists who were doing the expecting, perhaps we shouldn’t be surprised that the numbers were so far off. No matter though, since the not-totally-disastrous stats were exactly what the doctor ordered to send shares into a bullish spasm that left the Dow sitting 123 points higher by day’s end. The sales data evidently had been leaked Sunday night, and DaBoyz lost no time using it to put the squeeze on bears. They effortlessly ran the index futures up the equivalent of more than a hundred Dow points in thin trading overnight, all but guaranteeing that the broad averages would have to play catch-up on the opening bell. This is exactly what they’ve been doing for more than two years as the Mother of All Bear Rallies has run its course, but in psychological terms, they don’t seem to be getting as much bang for the buck. There was little joy in Mudville, for one, where a trader quoted by the Wall Street Journal allowed only that stocks were due for a snapback rally. However, he added, “I don’t think one day makes a trend.” » Read the full article