Wednesday, July 13, 2011

Wafting higher early Tuesday night, Gold is within an inch of overtaking the May 1 high whence the not-so scary correction began.  Check out touts for bullion, since they give breakout targets that could prove useful in the days ahead.

Was yesterday's spike top the dying lunge of a bear rally begun in early May?  It's possible, since the intraday high came within 0.46 points of an important target at 77.18 shown in the chart.  However, the bullish case deserves deference here, since the peak, even though it failed to hit the target, generated a bullish impulse leg of significant degree when it exceeded a 76.61 high from early April. We'll know more once we've seen whether buyers are feisty enough to take on some small "external" peaks going back to mid-March.  (Tired of having to blindly follow some guru? Click here to learn how to forecast like a pro.)

The weekly chart shows how swings of as much as 130 points -- that's about 1000 Dow points! -- could amount to little more than noise as the summer grinds on. More immediately, the hourly chart is working on a bullish impulse leg that has short-term follow-through potential to as high as 1328.70. Key resistance lies at 1318.00, the sibling midpoint, but once it's breached, the rest of the trip could be a romp.  Both targets are predicated on the survival of a so-far point 'C' low at at 1307.25 recorded on the hourly chart at 7:30 p.m. EDT.

Last Friday's token breach of a significant peak recorded two weeks earlier was the most encouraging sign Silver has generated in more than a month. It created a bullish impulse leg on charts of higher degree, setting the stage for a push this week to as high as 38.290. That Hidden Pivot target is shown in the chart, and the likelihood it will be achieved soon will grow if and when its sibling midpoint, a midpoint resistance at 36.550 that lies ten cents above yesterday's peak, is exceeded.

Traders should pay close heed at 1576.50, a Hidden Pivot resistance with potential stopping power that went overlooked and unmentioned in yesterday's tout.  Since it closely coincides with early May's all-time high at 1577.70, there's apt to be daunting resistance at that level. Once above it, however, the futures will become and odds-on bet to reach a minimum 1595.60 without a struggle.  The origin of that Hidden Pivot is shown in the 240-minute chart (inset). _______ UPDATE (10:39 a.m. EDT): The futures stalled for three hours a few ticks beneath 1576.90, then ratcheted higher. The overnight price action has created a secondary target at 1597.60 with a 1581.10 midpoint. That fact that this last number has been easily exceeded bodes well for both of the unachieved, short-term rally targets remaining.

Rick’s Picks subscribers were in on the fun in real time yesterday when gold quotes went ballistic around mid-session. The strong rally may have come out of the blue for some traders, but not for us, since we’d prepared subscribers with a bullish trading “tout” the night before.  We noted at the time that gold futures had looked “unintimidated” at the closing bell that day, and that they appeared ready to blast off.  The best part was that we were able to watch – and trade – the anticipated surge as it occurred because we held ringside seats at an impromptu online “webinar.”  Rick’s Picks frequently holds such sessions, alerting subscribers via e-mail when they are about to begin. Their purpose is to identify actual trading opportunities in real time, rather than merely talking about what the Hidden Pivot Method “might” have accomplished if only we’d used it. This time, our preparations paid off when gold behaved exactly as expected.  The bullish target we’d identified Monday night was 1574.40, about $23 above where August Gold was then trading. In the actual event, buyers pushed the futures to an intraday high at 1574.70 -- exactly three ticks from where we’d anticipated a short-term top. They then entered a shallow correction that was still going on as we went to press early Tuesday evening.  However, if and when the ‘Auggies’ regain traction, we’ll be looking for a second-wind push over the near-term to as high as 1589.40.  That target was included in the tout sent out Monday night and still looks like a good bet. Most gratifying of all yesterday was the e-mail we received from a subscriber, John F., who jumped into a gold trade while the webinar was in progress. “As a piano tuner on vacation in Lake Placid, I