Monday, January 23, 2012

There's an interesting divergence between Gold and index futures Sunday night, although the differential is not yet sufficient for us to infer that business-as-usual won't have them re-synched by sunrise. The E-Mini S&P opened on a smallish gap down, but there has been little movement since.

Silver's curiously steep trajectory on Friday pushed it past a few minor Hidden Pivots, but even if the forces driving the move were anomalous  -- a short-covering liquidation, for example -- they seemed powerful enough to get the March contract to December 2's key high at 33.740.  The bad guys would have no place to hide if that number is surpassed, but even before they panic, camouflageurs should prepare to leverage a B-C pullback from above the secondary peak at 33.300 shown in the chart. Any entry opportunities thereof would come, not from subtleties that only we understand, but from trading reflexes quick enough to catch a fleeting buy-stop at X.  Want to learn how to forecast and trade like a pro?  Click here for a free trial subscription to Rick’s Picks.

A 1681.50 target may be growing stale, but that does not invalidate it.  Late Sunday night, DaBoyz were attempting to develop thrust sufficient to push the February contract above Thursday's 1670.60 high. Camouflage entry opportunities were exhausted earlier this evening, however, when the futures pulled back after breaching an external peak at 1668.80 also recorded on Thursday. Bulls take note: a breakout above 1670.60 could be a trap, since there's an additional Hidden Pivot resistance at 1673.70 (see inset) with potential stopping power. _______ UPDATE (3:36 p.m. EST): The longstanding target at 1681.50 nailed the apex of today's $18 rally within three ticks.  Because it was so long in coming, we should treat the high as a potentially important one.  However, if bulls should blow past it today or tomorrow, the next logical stop would be 1690.50, a Hidden Pivot.

Late Sunday night, the (very) minor trend was bearish, although it would take but a few ticks of upside to change that by creating 'dueling' impulse legs on the lesser charts.  An appropriate response is to ignore this vehicle for the time being, saving our attention and energy for better opportunities.