Tuesday, April 1, 2014

Gold has remained weak in line with my forecast and on Monday came within spitting distance of a 1280.10 Hidden Pivot target we've been using as a minimum downside objective for the May contract.  Shifting now to the June futures, I see further, very likely downside to 1272.00 before bulls get traction.  If you are a Pivoteer, I do not have to tell you how pretty and precise the price action has been at the 1307.00 midpoint pivot. This not only corroborates the target itself, it also suggests that there will be an opportunity to do some very tightly stopped bottom-fishing there.  If there are any fills reported in the chat room that have survived the low, I will establish a tracking position for your further guidance. Since odds of a fall to the target are high, traders should position from the short side until it is reached. If you are able to do so and then to reverse the position and go long, you should apply a portion of your gains to cushioning the stop-loss on a multi-lot position.  _______ UPDATE (April 1, 9:02 p.m. ET):  Yesterday's stab down to 1277.40 brought the futures still closer to my target.  The analysis and advice given above still hold. _______ UPDATE (April 2, 1:11 p.m.): I was VERY surprised (i.e., flabbergasted) to see that the futures turned higher this morning without having achieved my correction target at 1272.00. This holds bullish implications, but only after the upward reversal has gone 'bullishly impulsive' on the hourly chart. A print at 1295.60 would accomplish this. However, it is in Mr Market's nature that the so far intraday high would have fallen a vexatious 0.70 shy of meeting that criterion. Even so, and all things considered, my gut feeling here is: cautiously bullish. We

Silver's histrionics over the last three days have nearly worn me out. That said, although the May futures are in a duel between bulls and bears on the lesser charts, there was a potential buying opportunity setting up on the 15-minute chart. Specifically, you could try bottom-fishing at the 19.658 target shown, using a stop-loss as tight as 3-4 ticks for a single contract. If you use 'camouflage to get aboard, it's okay to step up the size. _______ UPDATE (April 1, 10:16 p.m. ET): The actual low was four ticks beneath the target and was followed by a 28-cent rally.  However, since no one in the chat room reported a fill, I'll assume this opportunity went unexploited. _______ UPDATE (April 2, 4:26 p.m.): With today's spike, the futures have now rallied 51 cents from the forecast low at 19.655. ______ UPDATE (April 6, 4:02 p.m.): A spike on the opening bar showed promise, since it was bullishly impulsive on the hourly chart. However, the subsequent relapse reversed the effect, creating a duel between bears and bulls. On balance, my bias will be mildly positive when the futures begin a new week Sunday night. _______ UPDATE (April 7, 11:56 p.m. ET): The tedium of the last few days is bullishly impulsive nonetheless (unlike June Gold), so look for the futures to achieve a minimum 20.060, and thence 20.345 (see inset, a new chart), if buyers can surmount the persistent weakness of the broad averages. _______UPDATE (April 11, 1:07 a.m. ET): Silver's recent thrust has bettered the higher of the two targets given above by 5.5 cents (see inset), implying that still higher prices impend once this correction has run its course.  For trading and positioning purposes, I'd suggest using the pattern shown, with a 20.615 target. Camouflageurs take note: a

The weekly chart shows Silver Wheaton to have done little more than screw the pooch during the past twelve months. Despite this, there were undoubtedly times when you and I got all het up over the stock's retrospectively gratuitous ups and downs, which mostly stayed within the range $20-$30. SLW is working on a bullish impulse leg at the moment, but it must be said that if the buyers had any guts, they'd have taken out the 27.25 peak recorded back in September. The fact that they did not suggests the stock is in no great hurry to blast off; and neither should we be in a hurry to acquire shares or options pronto.  Since the very big picture suggests the bullish consolidation of a stock capable of very powerful rallies, it is not inconceivable that we should try to lay in an inventory of way-out-of-the-money call options at some point. Just not now. We'll want to do so when the stock looks strong enough to allow us to spread those calls off so that we hold essentially riskless vertical or calendar spreads, as we have done so often in the past. Since we should always keep an open mind, we must acknowledge the possibility that SLW is imminently about to trash my outlook with a blast into outer space. You can prepare for this by monitoring the 15-minute chart, since a 'b c'-type pullback from above the 22.81 'external' peak made yesterday at 1:45 p.m. EDT would offer the sort of camouflage entry opportunity that we thrive on.  Please report any fills in the chat room so that I can establish a tracking position for your further guidance. _____ UPDATE (April 1, 10:22 p.m. ET):  The stock triggered a false entry signal 30 minutes into the session then flopped

The corrective rally went a tad higher than expected, but now, with the stock relapsing, the bearish target at 34.00 disseminated here earlier still obtains. The chart shown corrects it slightly, to 33.96, but the so-far 8-cent breach of the midpoint support at 36.13 is not sufficient to infer that the implied further slide of $2, or about 6%, is a done deal. In fact, as long as the stock is within a dime or so of the midpoint pivot, traders can position from the long or the short side.  If using the camouflage technique, I'd suggest looking for your entry opportunity on the 1-minute chart, where the day's final bar was impulsively bullish.