Thursday, July 7, 2011

Although I frequently call attention to rallies that have chickened out just shy of some external peak, in this case August Crude's ability to exceed just such a peak, even if by only a hair, is reason for a bullish bias, at least for the near term. The 99.68 target of the pattern shown looks like it's in-the-bag, since its 96.57 midpoint sibling has been handily exceeded. ______ UPDATE (12:55 p.m. EDT): The futures rallied sharply, peaking at 99.42.  Since this vehicle does not deliver the absolutely precise target-hits of, for one, the E-Mini S&Ps, the 26 cent shortfall should be regarded as insignificant and the target as having been achieved.  Typically, when we initiate trades in Crude against the swings, I advise allowing leeway of at least 21 cents.  Actually, that is the main reason we do not often trade this vehicle -- i.e., because it does not always perform perfectly in line with our expectations.

Silver and Gold were in promising, shallow corrections late Wednesday night, and so my projections do not take into account the possibility that their respective rallies will be derailed before reaching the station.  Ditto for the E-Mini S&Ps, which are looking quite feisty at the moment.

Silver looked like it was waiting for gold to catch up before taking on the June 22 high at 36.875. Wednesday night's mellow action seemed likely, for starters, to develop thrust enough for a push to the 36.990 target of the pattern shown.  Night owls looking for a safe spot to board should consider impulsive opportunities as subtle as the developing one that I've highlighted in the chart.  Please note that I've slightly doctored the chart. If you can determine how, you're well on your way toward discovering an opportune entry spot on your own.

Yesterday's surge will have rejuvenated bulls by blowing away the 1526.50 peak "along the wall" of late June's decline. Most immediately, the prospect of a short-term finishing stroke to at least 1544.20 looms, or perhaps to 1548.30 if any higher.  Astute Pivoteers may have noticed that the intraday high at 1534.90 fell precisely at the Hidden Pivot midpoint shown in the chart. What this implies is that any progress above it will all but ensure a precise hit at 1544.20. The higher, alternate target comes from making 'p' into a point 'B'.  Night owls should look on the five-minute chart for camouflage along the lengthening path of tonight's tiresome consolidation.  Remember: For the Hidden Pivot trader, tedium is opportunity. ______ UPDATE (10:27 a.m. EDT): The midpoint resistance noted above has contained the rally so far. However, the pullback from it has created a new point 'C' at 1524.20, and therefore a new midpoint and target, respectively, at 1536.50 and 1548.80.

Unlike the E-Mini S&P, this vehicle has decisively exceeded the intraday highs in night trading and is currently hovering above the 12588 Hidden Pivot midpoint associated with a 'D' target at 12639. That's my minimum upside projection for the very short-term, but it will be catch-as-catch-can boarding at these levels, since the bullish trend is by now well exposed.  Tightly stopped shorts from 12639 look like they'll enjoy great odds. _______ UPDATE (8:00 a.m. EDT): The futures ran up to 12631 overnight, topping eight ticks beneath the target and effectively completing the pattern shown in the chart. The slight shortfall hints of tired action today. The correction from the overnight high projects to 12570, and although I wouldn't suggest bottom-fishing there with the usual microtight stop-loss, the hidden support could prove useful analytically, since a breach, even slight, would portend still more weakness. _______ FURTHER UPDATE (8:29 a.m. EDT): The futures have exploded for who-knows-what-reason, giving DaBoyz the wherewithal this morning to squeeze shorts, yet again, to within an inch of their lives. This gambit points to a potentially tradable high at 12677 with a possible 'camo' buying opportunity on a pullback to its 12629 midpoint sibling. (Click here if you'd like to learn our proprietary trading tricks yourself -- for $50 off the regular price of the Hidden Pivot Webinar.)

Although the futures appeared to struggle yesterday, they ended the day with a slight gain, presumably ready to take on the 1342.50 peak noted here earlier. Once comfortably above it, the September contract will become an odds-on bet to reach an important Hidden Pivot at 1382.35 without too much strain.  Most immediately, there were no compelling opportunities beckoning night owls, since the futures have climbed in after-hours trading to within an inch of Wednesday's intraday high.

Gold and silver racked up another day of solid gains yesterday, providing some of the most encouraging technical signs we’ve seen in several months.  Most impressive was that numerous bullion-related issues that we track were able to generate fresh, bullish “impulse legs” on their hourly charts, much as we might expect from a rally with more than merely short-term potential. (Click here if you’d like to learn more about our proprietary Hidden Pivot Method.) This was true not only for Comex precious-metal contracts, but for such high-octane performers on the equity side as Silver Wheaton, a Rick’s Picks favorite that has been on a rampage, gaining nearly 22% in less than three weeks. Although we’re always eager to go-with-the-flow, it is our practice to closely monitor rallies like this one lest we be caught unawares by the sort of nasty downdrafts that are common in prolonged corrections. The purpose of such corrections is to shake loose all but the hardiest bulls, and that is why we are always guarding against the unpleasant surprise.  Technical analysis aside, we remain open to points of view that differ from our own, currently bullish, outlook for bullion.  To help readers keep an open mind, here is a bearish note that turned up yesterday in the Rick’s Picks forum. The author is Cam Fitzgerald, a frequent contributor. He argues that the looming 2012 election will put a lid on commodity prices. Cam begins his post by addressing the sunny outlook of “Charles,” who wrote that predicting a bullion rally “just ahead” is a no-brainer. ‘Sympathetic’ Decline “I am not with you, Charles. There is something else at play now that relates to elections next year. Commodities will decline and so will the commodity induced inflation threat. This is not bullish for metals. Gold and Silver,