Thursday, November 17, 2011

Traders who followed my advice would have gotten long at exactly 10:11 p.m. EST Wednesday night, since the futures bottomed at 1225.75, a single tick from the entry point I'd advised. (It would have been a tick or two higher than the original number, since we were using a rising trendline to position our bid. It was also noted in the chat room that a conventional ABCD pattern caught the 1225.75 low to the exact tick.)  Assuming four contracts were acquired, cash out half of them now with the futures trading at 1232.75.  That would give the remaining two contracts a profit-adjusted cost basis of 1219.00.  Set a 1230.00 stop-loss, but plan on exiting one of the two contracts at 1234.50 if it's reached.  We'll swing for the fence on that last contract, letting it run with no stop-loss. _______ UPDATE (1:56 a.m. EST):  We exited the third contract at around 10:33 p.m. That leaves us with a single contract (or 25% of the original position if you did more than four contracts) and a paper-profit-adjusted cost basis of 1210.25.  To eliminate the open-ended risk of loss, I'll recommend using an impulsive stop-loss, meaning we'll exit the last contract if a bearish impulse leg is generated on the hourly chart. At the moment, with the futures trading 1236.25, it would take an uncorrected plunge to 1224.25 on the hourly chart to stop us out.  That would breach two prior lows -- an internal as 1225.75 recorded tonight at around 8:30; and a second  at 1224.50 recorded on November 10. _______ UPDATE (10:59 a.m. EST): We exited on the stop at 1224.00 for a theoretical gain of slightly less than $700 per contract.  Because the downdraft exceeded the 1225.75 Hidden Pivot midpoint of a pattern begun Wednesday from 1257.75, the rally

Although Silver has lagged Gold on recent rallies, its immediate downside potential doesn't look quite as precarious.  A Hidden Pivot support at 32.795 is where the December contract seems likely to find traction if it falls, and that's where I'd suggest bidding -- tightly stopped -- if the opportunity should arise. I'm not even featuring an upside target today because the rallies have looked so punk, but if bulls should come to life, they'd be in good shape hovering just beneath last week's 35.350 high at the bell.

Set the snooze alarm to go off if the futures hit 1788.00 to the upside or 1744.90 to the downside, since anything between those two numbers is just noise. My short-term bias is bearish, since the futures have looked as though they couldn't impulse to save their life. My downside target is 1733.10, a Hidden Pivot support that you could bottom-fish with camouflage or, more adventurously, a small stop-loss.

Traders could have caught a nice ride yesterday from an interim low at 3.387, since it fell within 0.003 points of a Hidden Pivot support flagged in the chat room by 'Pivoteer' and amplified in my tout. The subsequent bounce would have been worth as much as $500 per contract if you'd exited before the futures relapsed down to a so-far low of 3.325 Wednesday night. That's a penny beneath my worst-case bottom, but I still expect a major rally from very near these levels, so camouflageurs are advised to remain diligent. I'll suggest using the 5-minute chart, since the bars are very thin if you go any lower.  If you'd prefer to use UNG, the NatGas ETF, the 7.32 pivot given here yesterday is still the place to look for a tradable turn. ______ UPDATE (11:35 a.m. EST): A 'camo' pattern launched at 4:50 a.m. from 3.341 would have triggered a long from 3.386. Half of a four-contract position would have been exited at the 'p' midpoint of the pattern, 3.401, and a third contract at 3.430, the 'D' target.  The remaining contract, adjusted for theoretical gains thus far of 7.50 cents, has an effective cost basis of 3.311. Let it ride for now with a fixed stop at 3.345.

Although U.S. stocks eventually did the right thing, plummeting to end the day, they were down only slightly for most of the session – a surreal performance, considering the hellish new tack of Europe’s financial crisis. If investors were already jittery about bailout-mania on the Continent, Wall Street bankers should be incontinent with fear over the rise in interest rates that has started to spread outside the high-contagion PIIGs zone. Even ostensibly top-tier borrowers like Holland, Finland and Austria have been getting socked with higher borrowing costs lately as investors have dumped triple-A paper issued by those countries. As for the deadbeats, Italy’s bonds pushed above 7% while yields on Spanish debt surged as high as 6.358%. Imagine a country trying to grow its way out of debt when it’s paying those kinds of rates on a Matterhorn of existing debts. The allegedly good news is that the technocrats who have replaced top elected leaders in Greece and Italy will come up with a plan to save the day. Yeah, sure. You can bet that Ben Bernanke’s got one they can try. Germany would veto it, for sure, and not because Germans remember the 1920s hyperinflation as though it were yesterday.  No, it is plain common sense that has prevented Germany from acceding to the populist solution of revving up the printing presses. Although Merkel seems eager to patch things up for perhaps another month or two by any means, there is resistance among German bankers to Belgium’s Plan A, which would entail selling bonds issued in the name of a federated Europe. This might sound like a great idea to the village idiot, or to Nobel economist Paul Krugman, but to anyone with common sense and no ideological allegiance to Karl Marx, it is simply a hair-brained scheme to