Wednesday, May 30, 2012

Bullion was getting a little boost in after-hours trading while index futures were refreshingly down a tad.  However, my touts for Wednesday imply that both trends will soon be reversed.  FYI, the weekly tutorial session will be held at 11 a.m. EDT as usual. It is open to those who have taken the Hidden Pivot course and who are registered, and also to everyone who is signed up for the June 6-7 webinar.  If you've been holding off, why not join us this time? You can do so by clicking here.

Silver fizzled on the launching pad yesterday, unable to muster the energy required to get it to a modest rally target at 29.245. Still worse is that the July contract ended the day below the 28.165 midpoint support associated with that number, turning it into resistance. We'd need to see a print at 29.005 today to infer that bulls are not in a coma, but barring that, the downside threat looks no worse than the obvious structural supports that I've highlighted in red.  As of around 6:40 p.m. EDT, I could discern no compelling trading opps, although the short-term trend was impulsively bearish on the hourly chart.

The 1333.25 rally target given here yesterday would have yielded a nice short, since the futures plunged a gratuitous 12 points after topping at exactly 1333.75. They subsequently shot up to 1334.25 to end the day, implying that this vehicle is firmly in the hands of madmen and thieves. Whether they know it or not, and barring some sort of black swan event, the cosmos have ordained further upside to a Hidden Pivot target at 1347.75. It is shown in the chart, but I'll leave it to deft camouflageurs to make proper use of it, long or short, since I will likely be away from my desk -- am in fabulous Pittsburgh, actually -- if DaBoyz should try to sneak one by us. _______ UPDATE (9:46 a.m.):  The futures turned unusually weak this morning -- so much so that two very wild pump-and-dump, pre-opening spikes engineered by the usual dirtballs achieved no better than 1331.00. Now, in the early minutes of the regular session, they've exceeded the 1316.00 downside target of an obvious pattern (60m, A=1334.25 on May 29 at 5 p.m.), implying that still more weakness impends. If so, the 1308.00 midpoint support of a larger pattern beckons as a logical minimum downside target for now. Calling the turns confidently and dramatically reducing the risk of trading are easier than you might think.  Want to learn how? Click here for information concerning the upcoming Hidden Pivot Webinar on June 6-7.

[We recently featured a guest commentary from Gary Leibowitz, a frequent contributor to the Rick’s Picks forum. In the essay below, he explains why, despite Europe’s financial troubles and signs of a global economic slowdown, a perfect storm of positive factors is likely to produce a final hurrah for stocks. Don’t hold onto them for too long, though, says Gary, because 2013 is going to bring disaster for most investors. RA] Whatever happened to all that money Helicopter Ben printed? Surprisingly not very much. Between late 2008 and the end of 2011, the Fed injected almost $2 trillion in the financial system. Most of it, however, is parked in banks as reserves. At the same time, the Fed announced it would pay interest on those reserves. They paid $2 billion in 2009 alone. Since the Fed created an incentive for banks to hold that cash, 88 percent of it was still being held as of December 31.  There goes the theory that we could inflate our way out of this mess!  In fact, the Fed has done exactly the opposite, creating a system that pumps banks full of interest-free money while keeping that money from circulating. How ingenious! M2 velocity, which measures the frequency with which a unit of money is used, then re-used, to buy goods and services, has been contracting since 1999.  In fact, it is near an all-time low. At least, it was up until a few months ago.  The recent announcement of a huge borrowing frenzy last month could  be an anomaly, or a breakout of all that zero-velocity cash.  But up until recently, the money has not been lent, or spent. It seems that high commodity prices may have been caused by the huge monetary spike.  Not that the money actually fed into the system