September 2011

Don’t let this nasty shakedown in bullion scare you. For the record, we are quite confident that gold and silver will be back on track soon, bounding toward new record highs. But both may have a little farther to fall if forecasts disseminated earlier to Rick’s Picks subscribers prove correct. Specifically, we’ve been drum-rolling a possible 1709.20 bottom for Comex December Gold, and a 35.70 low for December Silver.  As of yesterday, the latter had overshot its target by 17 cents, hitting a 34.53 low that in a single day shaved 10 percent off the value of the world’s store of silver.  Gold, for its part, didn’t quite reach the 1709.20 target, instead turning higher from 1723.20. We think the December contract’s so-far $29 bounce from that number will prove short-lived and that the futures will make an important low at or very near 1709.20 today or Monday. If so, this is likely to put pressure on Silver, perhaps pushing quotes below $35 for a day or two. In any event, if the selloff in bullion is not over already, it will be soon. Those who follow Rick’s Picks closely would not have been surprised by yesterday’s across-the-board avalanche in commodities and currencies.  The night before, a commentary bearing the headline “Strong Dollar Predicting Europe’s Breakdown” went out to subscribers and readers. Our actual target for the Dollar Index lay well above, at 79.86, but yesterday’s explosive move came within 1.06 of hitting it. We remain confident the target will be achieved, albeit earlier than we might have expected.  If so, and the dollar's rally has further to go, yesterday’s dramatic unwinding of the so-called “risk trade” will continue apace. How much farther?  We’ve provided subscribers with a precise target for the December E-Mini S&P futures, and although the carnage could conceivably

The headline from Auerbach & Grayson's latest report says it all.  For a full report on what is shaping up to be The Perfect Storm, click here.  We are grateful to charter subscriber Jon Auerbach for making it available to Rick's Picks subscribers.

Is that peak internal -- or is it external? The answer is not always perfectly clear, but the good news is that you shouldn’t worry about it too much. It is the big picture that counts, and this session focuses quite intensively on Google charts to show you exactly how to relax. Our hour together concludes with an analysis of the Dollar Index that shows why the greenback is all but certain to head higher in the weeks and perhaps months ahead.

Single-bar coordinates all around make the pattern shown in the chart an enticing one for finding a low-risk place to get long. Of the two possibilities shown, I prefer the higher Hidden Pivot support at 671.50. However, if it gives way easy, rebid (or re-camo) using the 664.50 target of the alternative pattern. _______  UPDATE (12:09 p.m. EDT):  With commodities in a free fall today, March Corn has taken a 13-cent Whoopee Cushion bounce this morning from a low at 673.75.  It has since returned to Earth and is about to crash-land, so we'll cancel the trade. ______ FURTHER UPDATE (12:47 p.m. EDT):  A chat-roomer has convinced me that there's still a trade to be tried here, since the point 'C' of the original pattern was not disturbed by today's mindless violence.  However, if you look at the 60-minute chart, taking the mindless violence in at a glance, the eye naturally shifts north to  higher points 'A'  -- i.e., 762 (9/12) or 756.75 (9/13).  Under the circumstances, the safest trade I can recommend at the moment is to bid or camo-enter near 644.50. The risk is that the futures will turn from a low somewhere above this Hidden Pivot, but if you want to be certain not to miss the trade, you'll need to try a camouflage entry at 664.50 first.  That is the lower of the two numbers given above.  You could also test the water at 671.50, as noted above, and although I would expect a nominally tradable bounce from that number, I doubt any rally would get very far.

Silver Wheaton's ability to mildly buck the trend in recent days has generated some buzz in the chat room. Before you bulls give your heart to the stock, though, I'd suggest taking a look at the chart that accompanies today's SLW tout.

Silver Wheaton has managed to swim upstream in recent days, but let's see it push above the 42.89 'external' peak shown in the chart today or tomorrow before we become true believers. The same chart shows that the 42.50 top of yesterday's spike came with 32 cents of a Hidden Pivot target going back to June 20's 29.80 bottom (aka point 'A'). _______ UPDATE (11:51 a.m. EDT):  The stock has collapsed today, opening on a 6.2% gap lower, at 38.10. Subsequent weaknesss has brought it down to as low as 36.66, representing a loss of 9.8%.  The move is strongly impulsive on the hourly chart, though not yet on the daily.

Although the significance of a 1750.10 correction target has diminished somewhat with the elongated tedium of these last few days, it can still serve as a minimum downside objective for the near term as well as a place to try bottom-fishing with a very tight stop-loss. Camouflageurs should look for leverageable subtleties on the 15-minute chart or less, but keep in mind that a decisive breach of 1750.10 would be warning of more slippage to as low as 1709.20. Once again, an 1840.10 print to the upside would be where I'd sound the all-clear for bulls. _______ UPDATE (11:38 a.m. EDT):  The futures are getting crushed, having traded as low as 1723.20 so far today.  The 1709.20 target seems assured, although 'camo' traders could have profited from getting long briefly near the 1750.10 midpoint referenced above.  A bullish pattern that met all our requirements began at exactly 7:19 a.m. EDT from 1750.40. In this instance, B=1757.10 (7:26 a.m.) and C=1755.00, yielding an 'X' entry trigger at 1756.70; a 'p' midpoint at 1758.40 where profits on half the position could have been booked; and a 'D' target at 1761.70 that was missed by the actual top of this retracement at 1760.00.

Are the futures finally fixing to drop out of the tedious distribution pattern that has been under construction for the last six weeks?   If so, they'll fall all the way to  1088.75 before bears have a chance to reverse the tide. That is a Hidden Pivot midpoint associated with the very bearish target at 954.00 drum-rolled here earlier.  A plunge to the lower number seems like a lock-up to me at this point, although we must always allow for the seemingly impossible to occur. In this case, that would mean an unpaused upthrust exceeding 1258.00, an external peak recorded in early August when the futures  were in a free fall.  Most immediately, I'd suggest avoiding this vehicle, since its preternaturally tight price range tonight suggests it is being tightly controlled by the usual bunch of arse bandits.  Want to learn how to nail swing highs and lows precisely, and to manage trade risk yourself? Click here for information about the upcoming Hidden Pivot Webinar on October 5-6 and a $50 discount.

Today's commentary concerns the apparent breakout of the dollar, but I'd like to elaborate just a bit more in this tout, addressing my comments to subscribers rather than to a general audience.  Specifically, the ambitious rally target at 79.86 that was flagged in the essay comes from the hourly-chart pattern shown. Although a move above the 'p' midpoint would confirm this, my gut feeling is that it will be a pushover.  Also mentioned in the commentary, but not shown explicitly, are several 'external' peaks on the daily chart that were recorded  in January and February. They lie, respectively, at  78.87, 79.17 and 79.60, and so any move that hits the 79.86 Hidden Pivot flagged above would infuse quite a bit of new strength into the bullish trend. _______ UPDATE (11:55 a.m. EDT):  The dollar is in the throes of one of the most single-day rallies in recent memory, hitting a so-far high today of 78.80.  The 79.86 target noted above remains my minimum upside objective for the near term, although I hadn't expected it to be reached so soon.