October 2011

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Caterwauling its way to nowhere, December Silver was mildly impulsive at the bell yesterday, then fully corrected by midnight. From the so-far overnight low at 31.760, it would take a 50-cent thrust to create the theoretical entry point for a pattern with the potential to reach 33.745. Night owls should continue to monitor the corrective b-c, and zoom down to the 5-minute chart for 'camouflage' if it gives way to an upthrust that engenders an 'x' entry point. I've sketched this out for your further guidance in the accompanying chart.

Apple has a bit more headroom before it bumps up against a 447.41 Hidden Pivot target. Note that Friday's gap opening created a powerfully bullish island reversal (see inset), amputating the October swoon and the dead weight it might otherwise have added to this thrust.  Camouflage will be hard to come so belated for purposes of getting long, but if and when the stock closely approaches the target, we'll look to buy some way-out-of-the-money puts that would figure into an eventual, potentially riskless, butterfly spread.

We've set screen alerts above and below, respectively at 1704.90 and 1585.30. Yesterday's fright-mask dive altered a minor upside target at 1720.60 so that we are now looking at 1697.40 instead. That 'D' Hidden Pivot is sown in the chart, as its 1662.80 midpoint. That last number has been exceeded intraday by $4, but the futures were having trouble with it Tuesday night, so we should require a close above it before we infer that 1697.40 is in play.

Bears shouldn't get their hopes too high, since the December contract is still under the sway of a bullish impulse leg created Sunday night, just before stocks went into yet another apparently meaningless swoon.  It didn't take out the point 'C' low of a pattern that projects to 1256.50, although the graphical picture was rendered visually unappealing by the large trough formation of the last two days.  Night owls should look elsewhere for easy opportunities, since there were no subtle footholds here as of around 10:35 p.m. EDT.

Today's commentary concerns raw milk and the depredations of the USDA because I couldn't bring myself to pretend that there is anything worth saying about the markets. Their tiresome holding pattern is now in its third month, too boring to watch if not (fortunately) to trade.

The March contract, ever so coy, is playing our least favorite song: 'I'll Be C-ing You'. The first pullback 'C' generated a false entry signal at 654.75; the second, an entry at 647.75 that has not yet been stopped out. Still, it is having plenty of trouble getting airborne, since it's been two days since the point 'x' entry was tagged.  We have no trade on at this time,  nor do I see any likelihood of a subtle opportunity to get long developing soon. That's because the nearest unburned 'external' peak is the very unsubtle one at 679.50 recorded on September 27. Unfortunately, if and when the futures pop above it, the bullish secret will be out.

It would take just a modest rally to get past two 'external' peaks on the hourly chart. If it happens today, take it as a sign that yesterday's sharp thrust will not prove to have been a one-day wonder. Your screen alert should be set at 140^19, since that's where the move would turn impulsive on the intraday charts.

Yesterday's rally looks promising because each of its two discrete thrusts created a bullish impulse leg on the hourly chart.  Meanwhile, the pullback from the intraday high at 77.25 is working on a second thrust without having gone impulsive as of around 12:35 a.m. EDT. This tends to corroborate a mildly bullish picture, at least for the moment. It would become more bullish still today if bulls can follow through with a push exceeding the 77.29 secondary peak from October 13.