Silver should run into resistance at 33.675, just below last week's high, but if the bulls can dispatch both of those levels, $35 comes into play with a "D" target at 34.985. With the silver market, we go three-for-three in using last Wednesday's low as the A point for our pattern. It must be said that silver has not recovered as convincingly as has gold from the deep lows of late September, and as in the other two markets covered today, we will have to watch for a decline that challenges our "C" point, in this case 32.365. Friday's selloff in silver was powerful and can be seen as a bearish impulse wave. Pivoteers should identify the slender coordinates of that pattern, do the math, and be aware of those downside targets along with the bullish ones described here. (Posted by Doug "harry" McLagan) _______ UPDATE (2:37p.m. EST): Traders who did the math had the opportunity to catch a bounce off of the bearish midpoint alluded to at the end of the tout. The prominent A point was Friday's high of 33.740, and the midpoint of the pattern came in at 32.400 or 32.395, depending on how you chose to round the half-tick value. After a low of 32.385, the futures rallied to a high of 32.565, a nice multiple of the risk that would have been involved in the trade. The sibling "D" target of the pattern is at 31.710. [Note: Due to a technical problem, charts are not included in today's touts, but they can be viewed via links in the chat room. See the first posts in the Monday log.]
Monday, December 5, 2011
GCG12 – February Gold (Last:1749.50)
– Posted in: Current Touts Free Rick's PicksWe hold a single contract with an effective cost basis of 1708.00. A trailing stop would have gone into effect on a rally to 1770.00, but because the last upthrust fell $3 shy of that target, we've taken a $45 ride south on a fixed stop. This was unpleasant but consistent with our intention of holding the position come hell or high water. Even so, I'll now suggest using a fixed stop at 1716.10, since it would be a crime to take an actual loss on a position that at one point had shown a paper profit of nearly $6000 per contract. If we're stopped out, we can continue to get long whenever it suits us, risking little or nothing in theory each time, until we finally catch the Big Ride we've been waiting for. FYI, today's carnage targets 1716.40, $5 beneath the so-far low.
ESZ11 – December Mini S&P (Last:1253.50)
– Posted in: Current Touts Rick's PicksWe will watch a 1281.75 hidden pivot in the S&P futures, with an eye to shorting the market. Last week's strong rally has not retraced deeply, but a one-off A from Wednesday (1183.00) and Friday's decline give us something to work with. The 1281.75 midpoint is less than eight points below the three-month high of 1289.25 made in late October. Absent a larger retracement which forces us to recalculate our targets, traders should use a stop not below 1282.75 in shorting this midpoint. (Posted by Doug "harry" McLagan)
900-Point Rally Has Fattened Dow for the Kill
– Posted in: Commentary for the Week of March 8 FreeLast week’s 900-point Dow rally may have stirred up some bullish excitement on the Street and at CNBC, but it looked to us like a fat pitch for anyone who’s been waiting patiently to get short. We’ll be looking to do so ourselves next week -- with as little risk and stress as possible, using index futures and or equity put options – so click here if you want a free pass to Rick’s Picks as we attempt this. You’ll have access not only to detailed trading recommendations that are updated around-the-clock, but also to a 24/7 chat room that draws experienced traders from all over the world. We hold no open positions in index futures at the moment, incidentally, although we established a bullish tracking position in gold last week just as Comex futures were starting to take flight. With regard to the broad averages going bonkers last week, we were merely bemused spectators as Wall Street’s pros squeezed bears within an inch of their sorry lives. Abetting the short-covering stampede was ostensibly “good” news from Europe, some encouraging retail sales data at the outset of the holiday shopping season, and, for good measure, some ginned-up unemployment figures that took hypothetical joblessness down to “8.2%”. We were surprised that stocks failed to hold onto their gains after the news came out, and that’s one reason why we’re especially eager to establish a short position against the recent trend. ‘Real Damage’ Another, more technical, reason is that the ups and downs of the broad averages since mid-October have created what we call “dueling impulse legs” on the daily chart. This term is specific to our proprietary Hidden Pivot Method, and it implies that each encouraging rally has been followed by an equally discouraging decline. In general, we should expect healthy
