Friday, September 2, 2011

The silver charts for various timeframes give us numerous bullish price targets on the eve of the NFP report.  The pivot at 43.060 which we discussed earlier this week remains active, and several others are identified in the attached chart.  An energetically bullish reaction to the employment data should get through the 42.430 midpoint easily enough, but the pivots at 43.060 and 43.540 might reward a short-sale.  Above there, the futures would take aim at the important prior high of 44.295.  In the event of an initial sell-off, the same advice as was given in today's gold tout applies to silver.  (Posted by Doug "harry" McLagan) _______ UPDATE (11:50am EDT): Like the gold market, silver was energetically bullish both before and after the employment report. The 42.430 pivot turned out to be scalpable, and the futures peaked in between the 43.060 and 43.540 levels that we mentioned last night.

Monday is Labor Day in the U.S., so the next updates and commentary will be Tuesday's.  Have a great holiday!

Volatile action has negated a downside target at 134^09.  Although this hasn't canceled the downtrend itself, a midpoint rally target at 141^17 is also in play now and can serve as a minimum upside target if buyers catch fire after Labor Day.

The futures sputtered out well shy of a 1241.00 rally target after topping three ticks above a lesser target at 1227.75.  The selloff was strongly impulsive, breaching two internal and two external lows on the daily chart.  The move could be shortable, especially by night owls, since the tail end was developing into a small abc pattern with a midpoint yet to occur. Beware of a possible bounce when that happens, however, since that will probably be the futures' best opportunity to finish the week on an upstroke.  _______ UPDATE (1179.50): The pattern worked very closely to the way I'd drawn it, triggering a 1200.00 short-entry 'x' at around 3:15 after single-bar coordinates had been formed at points b and c.  Half the position would have been covered at 1199.00 (aka 'p';) and half of whatever remained at 1196.75 (the 'd' target of our small camouflage pattern).  For your further guidance, I am establishing a tracking position that leaves us  short one contract with a 2004.25 basis that has been adjusted for theoretical profit-taking at the price points given above.  Since the futures left no 'external' peaks on the wild opening bars that we could use for placing a stop-loss, and because seasonality will have turned very bearish when Wall Street's brainless trading algorithms return to work on Tuesday, we'll swing for the fences and let the single-contract position ride with a stop-loss at 2001.25.

Gold's quiet trading on Thursday left our patterns and price targets intact ahead of the employment report and strengthened the sense that a strong move is imminent.  The monthly Friday morning employment data usually sets the futures markets whirling.  It could send gold quickly to one or more of our upside targets, but it could just as easily cancel two of them in the event of a print at 1813.60 or lower.  Those two targets, at 1872.50 and 1880.60, remain active, and we provided specific shorting ideas for them yesterday.  But gold is now in position to impulse powerfully through a group of prior highs ranging from 1842.70 to 1856.80.  Traders should not have orders working at 8:30 EDT when the report comes out, but after it does, the one-minute chart will be a good place to look for opportunities.  A bullish reversal pattern that emerges after a selloff, especially if it comes with camouflage, would be ideal.  (Posted by Doug "harry" McLagan) _______ UPDATE (11:42am EDT): Gold impulsed well above 1856.80 during the early morning hours and then surpassed the two highlighted targets shortly after the employment report came out.  Here's hoping that some of our readers simply decided to get long (or add to their existing longs) before about 2 o'clock in the morning, COMEX time.

[In the guest commentary below, Rick's Picks forum regular John Skerencak (aka 'John Jay') sounds a note of deep despair as we wait for the other shoe to drop, economically speaking. There are no white knights about to ride to the rescue, nor could our corrupt, entrenched political system even implement a good idea if one were up for discussion.  The best we can do, says John, is to hope that Japan and Europe flame out before we do.  RA] Resolved:  Nothing is going to change, so let’s pray that Europe and Japan crash before we do. Will the existing political system change things? No, it will not.  The entire process is corrupt beyond redemption.  Just look at the slate of cartoon-like characters offered by the Republicans -- excepting Ron Paul, who is already invisible to the mainstream media. Will the States rise up and confront the Federal Government? No, they won’t.  Various state governors have their pet complaints -- immigration, gun control, national IDs, etcetera -- but they all want the Federal money. As much of it as they can get. Even Texas Rick Perry seems to have balanced his budget with Federal stimulus money. Will outraged citizens call a Constitutional convention? No, they won’t.  Anyone who has read Kurt Vonnegut’s Slaughterhouse Five knows why. Americans all want to be the boss and will criticize any potential leader to death. Remember Ross Perot and Pat Buchanan? Will Col. Kurtz stage a military coup? No, he will not.  Ah, my favorite dream:  Col. Kurtz and an elite force of heavily armed, outraged, active-duty military Patriots descend on the next State of the Union Address to bring the traitors to justice.  In reality anyone above the rank of captain has been thoroughly vetted and is only interested in promotions, outstanding performance