Wednesday, June 6, 2012

Silver Wheaton's rally since mid-May is of less than, er, sterling pedigree, since the most visually obvious ABCD piece of it has a point B high that is pure sausage.  The good news is that Tuesday's thrust created a legitimate and very robust impulse leg, along with an uptrend that has room for a little more immediate upside, since the target of our 'bad' pattern, 27.69, lies six cents above the so-far high.  From a trading standpoint, the rally will be difficult to enter at the moment, since it has been developing for three weeks.  My suggestion to camouflageurs and Pivoteers is to buy the low of an abcd retracement from 27.69, although it is impossible to say whether it will turn from p, or perhaps d. _______ UPDATE (June 7, 9:55 a.m. EDT): SLW blew past the target before pulling back, leaving bulls well in command. Traders looking to stake out a long at theses levels should reference May 4's 29.13 peak for camouflage. _______ UPDATE (June 7, 7:16 p.m. EDT): The stock looks feistier than most gold stocks at the moment, having pulled back just enough to be considered re-energized for a C-D leg to complete the bullish cycle begun last Wednesday from 25.12.  To get off the launching pad, the stock would need an 86-cent booster rally from a low above the point 'A' shown in the (new) chart.  If and when that trigger is hit, camouflageurs will have their cue to attempt getting long. _______ UPDATE (June 12, 9 p.m. EDT): Based on the pattern shown in the chart, the stock has tripped a 'buy' signal at 27.32.  If I hear from at least two traders in the chat room on got on board following my instructions, I'll establish a tracking position for your further guidance.

A tradable pattern in Gold that I sketched here yesterday is playing out as hypothesized, although it was close to getting stopped out.  If this happens, there could be an even better opportunity following the creation of a second C low.  Night owls looking for a way to get on board should check out Wednesday tout for August Gold.

July Silver has gone bullishly impulsive in much the same way that Gold has on the intraday charts. The pattern shown projects to 29.465, a Hidden Pivot target that appears likely to be reached now that the futures have shredded its sibling midpoint at 28.710.  In the meantime, because the three peaks I've highlighted (see inset) are potentially usable for a camouflage entry, night owls should monitor this chart for the b-c pullback that would set up the opportunity.

There is short-term upside potential to 1653.30, the midpoint pivot of the rally pattern begun last Friday from 1545.50.  In the meantime, a promising camouflage pattern mentioned here yesterday is playing out as hypothesized with a point B high that has surpassed a prior peak at 1629.70 without getting past the more obvious one at 1632.00 (see inset).  Entry would have come at 1629.10, presumably via a pattern of lesser degree.  If the position survives the night and I hear from at least two traders who got long using the tactic advised, I'll establish a tracking position for your further guidance.  I will also do so if anyone gets aboard following the creation a second point 'C'  (i.e., one lower than 1625.50, which is close to being breached).

Tonight's most recent stab on the lesser charts has created a bullish impulse leg and also exceeded a minor 'D' target. This means short-term traders should position from the long side, even as we suspend our disbelief concerning the ostensible reason for the rally:  Spain's worsening plight and the stimulus this supposedly will coax forth.  Night owls have one more peak to work with at 1296.50 (see inset) to leverage the next 'camo' abc pattern.

Index futures were wafting higher Tuesday night, presumably made buoyant by the absence of volume and an apparent dearth of sellers. For DaBoyz who run this nightly carny game, such rallies present an opportunity to induce a short-covering panic -- just the thing to distribute shares to widows and pensioners who still don’t suspect stocks may have entered a bear market. At the moment, however, the missing ingredient to produce the wished-for buying panic is some mote of news that might support Wall Street’s cherished mirage of a world in which troubles melt like lemon drops. Not in Europe, though, and not tonight. Usually, when we see the Mini-S&Ps up more than 10 points late at night, as is currently the case, it means that delusions about Europe getting its financial act together are waxing rather than waning. This evening, however, we are seeing a bizarre inversion of the usual dynamic:  Stocks are rising in Asia not on speculation that Europe has resolved some aspect of its dilemma, but because it can’t, and won’t. Specifically, it is Spain that is getting pummeled today, shunned by the credit markets and worried that it won’t be able to meet payroll if it doesn’t receive a fresh infusion of credit, pronto. Years of Claptrap In a financial world not run by crooks, sociopaths and imbeciles, this would be taken for bad news. But the markets are in fact controlled by such types and worse, and so we see shares rallying tonight on hopes that Spain’s increasingly dire plight will call forth yet new and vast sums of stimulus money – and not just for Spain, but for all of Europe. It is an affront to civilization itself that this kind of thinking should rule global markets and therefore, in some fashion, our daily