Thursday, October 6, 2011

There was little to excite early Tuesday evening, although night owls with a deft touch may be able to exploit a small, bullish pattern that was developing in the E-Mini S&Ps.  There were subtleties in Silver that might also yield opportunity, although I haven't explicitly advised a trade.

December Silver has hypothetically stopped out point 'X' longs on the pattern shown no fewer than four times, but it remains valid nonetheless -- if not immiedately for trading purposes, then for analysis. Attempting the latter yields a 34.000 'D' target and a 31.215 midpoint. It also legitimizes any entry you can find that is based on a subtle impulsive thrust from within the forest of otherwise undifferentiated bars that have sprouted since September 28. A bigger picture, also accessible in the chart shown, makes the look-to-the-left peak at 35.510 a key number for us, since any impulsive thrust that clears it will be a sign that bulls are ready to go marauding.

There was unfinished business at the end of yesterday's pit session, the December contract having performed reasonably well when measured against our benchmarks. However, we should like to see a blast to 1705.00, and soon, before we break out the bubbly. That's a tick above a look-to-the-left peak along the wall of a recent, steep decline, and its breach to the upside would turn the intraday charts, although not quite the hourly, impulsively bullish. (It is short-term neutral at the moment.)  More immediately, night owls may be able to leverage the small ABC uptrend at the right-hand edge of the chart. It projects to 1673.20, subject to the interference of a midpoint pivot at 1653.40.  Notice as well that an external peak at 1658.40 may prove usable for a 'camo' entry. The larger, bullish pattern justifying such action begins with the 1585.00 low notched on September 28.

The rally was blithely on its way to 1153.75, a Hidden Pivot, when the bell rang ending Wednesday's regular session. The pattern yielding that target, along with an 1130.25 midpoint resistance, is shown in the chart. As you can see, buyers had little trouble chomping through the midpoint, and so far this evening a presumptive consolidation has not even come down to it. Night owls might want to notice that the last seven bars yield a potentially tradable pattern -- an uptrending ABC that has yet to put in a true 'C'.  An entry at 'X' would entail too much risk, but you may be able to find a small pattern if and when the still undetermined 'X' of the pattern shown materializes. Looking at a bigger picture, any rally would start to look interesting with a print at 1204.00, a tick above a peak recorded September 21 on the way down.  The peak is most unlikely to be reached within a day or two, even on a strong rally, but you should keep it in mind as an important bullish trigger threshold.

When will our political leaders get real?  The Wall Street Journal’s peerless Peggy Noonan asked that question last weekend in a column that was circulated widely, and it is probably high on the list of everyone else who cares about the state of the union For the time being, unfortunately, far from facing up to The Great Recession, our President has obsessed over “shaping a story” for the American people, presumably to soften us up for whatever it is that Big Government would purport to do next in our behalf. Mr. Obama went as far as telling an interviewer, Confidence Men author Ron Suskind, that dealing with the nation’s high unemployment had thus far failed because of the complexity of the problem, but also because “we didn’t have a clean story that we wanted to tell against which we could measure various actions.”  Come again?  It wasn’t “clean,” he explained, because “what was required to save the economy might not always match up with what would make for a good story.”  Nothing like a good yarn to help get the jobless back to work. Later in the interview, he amplified the point while inadvertently underscoring the smallness of his presidency: “The irony is, the reason I was in this office is because I told a story to the American people.”  Ahhh, so that’s what the hope and change thing was all about! This fixation on what Noonan refers to as The Narrative has got to stop, she says, since there really is no story: “At the end of the day,” she writes, “there is only reality. Things work or they don’t. When they work, people notice, and say it.”  Unfortunately, political leaders on both sides of the aisle, unchallenged by a news media that is either too stupid or too