Friday, May 4, 2012

A couple days' worth of gratuitous jiggling and jaggling have slightly lowered the 'buy' trigger to 594.51, although entry would need to be via camouflage on the 5-minute chart or less. We don't care so much about getting long at the moment, however, but about whether AAPL is showing signs of renewed strength, since the stock in rally mode has the power to pull the whole market along with it.  The next crucial test of buyers' mettle would come at 610.26, the p midpoint of the pattern shown. A still larger pattern, with a midpoint at 615.38, is also shown.

Today's commentary references a worst-case target of 28.810, but you could attempt bottom-fishing at 29.860, the Hidden Pivot midpoint of the pattern shown.  If weakness pushes the futures below that support, though, they'd probably fall to at least 29.480 in search of traction.  That's the 'D' target of a larger pattern, nicely visible on the 5-minute chart, where A=31.365 on 5/1 and B= 30.410 on 5/2. Notice as well that there are numerous subtle handholds for catching a ride north via camouflage. Rather be a trader than a lurker? Click here and we'll show you  how.

I mentioned a 1571.30 correction target a while back that would correspond to the 28.810 target billboarded in July Silver. However, if you extend June Gold's downtrend in your mind's eye, you'll see symmetry proceeding not from the highest 'A', but from the one-off. It yields a 'D' target at 1574.30 that should be held as a minimum downside objective if Gold gets dragged down by a leaden Silver. The outcome could go the other way, of course, with Gold pulling Silver out of the hole. But it would take no less than 1685.50, creating a bullish impulse leg of daily chart degree, to sound the all-clear. The significance of this number is shown in the chart.

Crikey! Although we declaimed here the other day that gold appeared to be carving out an important bottom, getting airborne could be bumpy.  One reason we “feel” a bottom is near is that it has been relatively difficult to stay long in gold.  Getting aboard has been no problem, of course, since traders can attempt it at any time, albeit not always with confident expectations of success. And so it was early Thursday morning, when we put out a “buy’ recommendation in Comex June Gold in the dead of night, shortly before 5 a.m. Eastern.  The rationale was purely technical and involved placing a bid at the target of a corrective pattern we’d expected to reverse at exactly 1637.40 -- $7 below where the futures were trading at the time. However, our Hidden Pivot support evinced no discernible bounce as the futures made a violently choppy descent toward an intraday low of 1631.30.  In the Rick’s Picks chat room, a subscriber reported having made a few dollar trading from the wrong side of the move, but this feat – catching a falling piano, so to speak -- would not likely have been duplicated by any but the nimblest of traders. So how much lower might we expect gold to fall before a bottom is in? Our guess, worst case, is 1574.30 for the June contract. Using Thursday night’s price of around 1637.40, that would represent a fall of approximately 3.8 percent from current levels. We say that would be a “worst case” target because gold looks pretty feisty on the hourly chart and could come alive at any time. Bulls have not ceded ground easily, and it would take a rally to just 1648.00 today  -- $11 above current levels -- for the good guys to regain the offensive short-term.