Friday, November 4, 2011

Silver refreshed the bullish energy of the intraday charts yesterday by surpassing a recent peak, but the effect was not quite so strong as the one we saw in December Gold. assuming the latter drags the former higher today, look for the rally to continue to at least 36.450, the Hidden Pivot target of the pattern shown.  A close above that number would portend more progress when the new week begins to as high as 37.870, the target of the larger pattern shown.

The December futures did all we asked of them yesterday, punching through an 'external' peak at 1757.90 with enough force to threaten the bad guys. If bulls have indeed recovered their mojo, expect the rally to continue today to at least 1785.60, the Hidden Pivot target of the pattern shown.  Even more bullish would be a close above that number, since it would make the 1830.50 target of a larger pattern, also shown, an even-odds bet for the near term.

By reversing without having achieved a downside target at 1201.25, the futures are hinting that bears should not try to impede this rally too aggressively. We can always short it fearlessly using camouflage, of course, and even come away with a profit if we're wrong. But it will probably be easier to go with the bullish flow for now, for the reasons stated above.  Most immediately, that would imply leveraging the 1305.25 target of the pattern shown.  The futures have already slightly exceeded its 'p' sibling at 1257.00, so the rally looks like a 'go'.

[Back in July, Cam Fitzgerald asserted here in a guest editorial that policymakers would eventually succeed in stabilizing the global financial system, triggering a huge bull market in stocks. He also asserted that commodities and precious metals would not participate in the rally. In the essay below, Cam shouts “I told you so!”  Readers may find themselves disagreeing, however, especially since precious metals have shown signs of life in recent days. RA] “Remember you read this. I am right, and I know it.” Those haughty words were my parting shot when I responded to comments about a guest essay I’d written here in July, “Commodity Bear Says 2012 Election Holds Key.” I had gone out on a limb, expressing my honest opinions that day and the next without a shred of doubt showing under my wrinkled shirt. It was my vision of the future. Commodities were going to fall along with gold, while stocks, particularly blue chips and defensives, would rise sharply in the months ahead. Not satisfied with that prediction, I dug a deeper hole for myself. There would be no QE3, I stated. Commodity speculation had already brought us to the brink of a new recession. Ben Bernanke would not make the mistake of trying that approach again. Instead, I asserted, policy tools would be employed to jump-start the recovery we needed, and this time it would not cost billions to achieve. At the heart of these efforts were the odds that some strategic efforts would pay dividends in improving the electoral chances of the president. I wondered at the time whether I’d regret my boldness. The responses that followed overwhelmingly rejected my theory. The local crowd dumped on me with glee. Mob rules. “Who are you going to position yourself with, Jim Rogers or Cam Fitzgerald?” one