Thursday, March 21, 2013

Back by (inexplicable) request today is Comex Silver. It has been in a really tedious dirge for a month (see chart), and so you can probably understand why I haven't had much to say about it. (Tracking gold's seemingly endless wallow has been taxing enough.) That said, I'll mention a 27.815 target that can be used a minimum downside objective for the near term.  Alternatively, if bulls are going to regain their mojo, it'll take a pop above the external peak at 29.280.  A 'b-c' pullback from 2-3 ticks above this number could yield the best buying opportunity we've seen in this vehicle in a while. _______ UPDATE (7:56 p.m. EDT):  Yesterday's blast easily vaulted 29.280, setting up an appealing camouflage opportunity.  Traders should use the pattern shown to get aboard once a point C is in.  _______ UPDATE (March 25): As we might have expected, Silver has settled back into the shallow rut that has asphxiated price movement for more than a month. I am dropping coverage of this dog until it either break down or impulses above the 29.670 'external' peak recorded on February 19.

It's been ages since we messed with this stock, but there could be opportunity if it falls just a bit further to the 28.32 target shown -- a Hidden Pivot midpoint. We can skip the camouflage and simply bid 28.36 for 400 shares, stop 28.19.  This play is speculative, since the stock looks like it will want to fall all the way to D=24.59 if it breaches the midpoint by more than a few cents.

The markets were so slow on this particular morning that our goal was to force a trade come hell or high water. Neither condition obtained, just a lazy drift sideways in most stocks following a 90-second spurt hours before the NYSE opened. If you’ve ever sat at a trading monitor desperate for action, this lesson could help you make the most of boredom next time.

[The following guest editorial was written by a regular contributor to the Rick’s Picks forum who goes by the handle 'Ragnar'.  His past essays here have generated a tidal response.  RA] Most start-up companies are founded on an idea, unbounded enthusiasm, hard work, and luck.  Without luck or exceptionally deep financial wells, most of them fail. There is a bon vivant spirit within the workplace, like everyone is contributing to the establishment of something great; and everyone participates in the flair and the excitement in the air.  Huge sale-commissions are part of the mix; expert managerial techniques usually are not.  The name of the game is market share, market share, market share for companies based in new fields or on new ideas, particularly in high tech fields. I knew that the housing market was going to fall hard after 2003, and that it should have hit a wall that early, and I told everyone who would listen. But I am not a billionaire like John Paulson.  He found a way to reap billions from this calamity.  I did invest in gold at $300 per ounce but did not find a way to reap billions.  The principal players in the private equity and hedge fund companies (often the same people) have become billionaires in this field of activity, which started burgeoning in the ‘90s.  Of course, anyone at this time in financial history who had the contacts and the chutzpah to borrow, leverage to the hilt, or convince investors (primarily pension, university, and other foundation funds with large amounts of capital) that they were the best choices to handle their funds had odds that highly favored success.  Were many of them brilliant?  Undoubtedly.  Was luck a more important ingredient to their success? To answer that question, let’s ask some more questions. 

References in the chat room to targets for the S&P cash index are well worth addressing. The 1551 target I was using was not exactly chopped liver, since on the daily chart, it took the S&P 500 nearly ten months to get there. The target was touched for the first time on March 8, and there's no getting around the inference that price action since then looks like a shallow consolidation. This means we need to move to a chart of higher degree, and so I've used the monthly chart to project a target at 1637.00 that is good enough for government work. (A=605.88 on 7/31/96; B=1576.09 on 10/31/07; and C=666.79 on 3/31/09) This is not a high-quality pattern, to be sure, since there was a massive correction to a second point C in 2007-09. Also, the tiny point A is sketch, analytically speaking. However, the pattern will suffice for purposes of relying on 1637.00 as a minimum upside target. We should also expect this Hidden Pivot to show a little stopping power. Shifting 'A' back to a small but important low at 605.88 recorded on 12/30/94 yields a D target at 1800.00. That's the number I would suggest that you keep most clearly in mind if bulls continue to rampage. This prospect seems astounding to me, given the powerful economic headwinds from Obamacare, stagnant real incomes and a government-employee pension/healthcare catastrophe that no longer lies 'down the road' -- that has in fact arrived. Under the circumstances, I'll be watching closely for signs of bearish impulsiveness on the charts. On the daily chart at the moment, it would take a print at 1501.47 to bring this about. Nevertheless, I've designated this tout as 'Actionable' ($) because there is plenty of room to trade the rally, perhaps via a possible