Wednesday, November 9, 2011

The futures played toe-sies yesterday with a Hidden Pivot resistance at 35.010, presumably marking time while Gold recovers its footing. The gratuitous chop did nothing to alter the short-term picture, although the intraday peak brought the futures a little closer to late October's challenging peaks.  Note that one of them, at 35.450, is the kind that we thrive on, since a thrust exceeding it slightly, followed by a b-c pullback similar to the one shown, could provide an excellent opportunity to get long with relatively little risk.  My hunch is that such an opportunity would come and go quickly, and that is why I am recommending a timed buy-stop entry.  That means that if and when you are triggered long at an 'x' entry point similar to the one shown, you need only stick with the position for perhaps 60 seconds to determine whether it is going to go quickly your way.

Yesterday's volatile price action broke the momentum to a presumptive 1830.50 target, but that Hidden Pivot still serves as our minimum upside objective for the near term. The dive from an intraday high at 1004.40 created a clean, sharp impulse leg, and with it the prospect of a spot to try bottom-fishing at a 'p' midpoint of whatever follow-through c-d leg impends.  For the guidance of traders, I have sketched out an ideal scenario in the accompanying chart. _______ UPDATE (2:16 a.m. EST): As of this moment, the midpoint support lies at 1783.00.

We're still expecting this rally to reach a minimum 1278.25, but expect 1305.25 if it goes any higher. If you're planning on trading the move from either side of the market, I'll recommend that you check out the chart archived with yesterday's tout for this vehicle.  My preference is for a 'camo' long from somewhere near 1278.25, but that number can also be shorted with camouflage if you know what you're doing.  That would be a risky play, though, since a print at 1278.25 would refresh the bullish energy of the hourly chart by exceeding a look-to-the-left peak from Halloween. ________ UPDATE (10:38 a.m. EDT): The daisy petals evidently have decreed today that Europe must die, although, as we know, the grim prognosis could change overnight, bringing headlines of some new bailout "plan" to "save" Greece, Italy, et al.  However, the fact that the E-mini's have created a bearish impulse leg on the hourly chart without having achieved a 1278.25 rally target that looked like a lay-up implies the selloff will be more than a one-day wonder. If so, the futures have a further 43 points to fall, to the 1194.50 Hidden Pivot 'D' of the daily-chart pattern begun on 10/27 from A=1289.25. Moments ago, the selloff breached a third 'external' low at 1236.50, amplifying the bearishness of today's refreshing slide.

Since today's guest commentary from Chuck Cohen talks about an impending boom in junior mining stocks, it might be a good time to look at the chart of Premium Exploration, an Idaho firm whose gold mine I visited in the summer of 2010. Everything about the company impressed me at the time, but Premium's considerable strengths, including excellent management and promising core samples, have evidently been lost on investors since at least last April, when the stock peaked around 81 cents a share. It has fallen by 75% since, and, to speak bluntly, there is nothing especially encouraging in the technical picture at the moment.  Under the circumstances, you could say that Premium is a good company whose stock has been unjustly pounded nearly to death -- and therefore an excellent mine canary to tell us when the junior explorers are really and truly ready to move. In Premium's case, it would take a pop above 0.3245, the second of two peaks whose breach to the upside would create a bullish impulse leg of  daily chart degree.  Accordingly, I've set a screen alert and will signal you in turn when there are signs of life. More immediately, with the recent breach of a minor midpoint support at 0.2673, the nearest logical place for a bullish turn would be from its 'D' sibling, 0.2143.  Failing that, the next technically logical stop on the way down would be at 0.1991, the Hidden Pivot midpoint of the larger pattern.  Stay tuned, since I'll be monitoring this stock's vital signs very closely.  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 November 16-17 and a $50 discount.