Comex December Silver

I drew a trendline a while back that showed a fearsome chasm opening up on the weekly chart, but it’s probably safe to draw a steeper line that will afford bulls an additional cushion if buyers should go derelict between now and year’s end. From a Hidden Pivot perspective, the outlook is heartening for the near term – tradable, even, by night owls, since a spear up to 18.675 has created a nice, but not too, impulse leg on the lowly five-minute chart.  Points A and B are, respectively, 18.535 amd 18.675, but I’d suggest letting the first ‘X’ entry get stopped out before attempting entry.

From a Hidden Pivot perspective, Silver’s vital signs remain weaker than Gold’s. Even so, bottom-fishing at 18.275 can be tried if 18.540 (aka point ‘C’) has not been exceeded to the upside first.  That’s a Hidden Pivot midpoint, and if it’s breached it would open a path down to as low as 18.015.

We’ve been using a Hidden Pivot at 18.560 as a minimum upside projection, but another at 18.535 looks just as likely to impede  the rally.  A close above it would all but clinch a follow-through to at least 18.560, but a close above that last number would open up a path to as high as 20.765 over the near term.

The intraday high yesterday fell 11 cents shy of the compelling target at 18.560 shown in the chart. This would have bearish implications only if the current retracement exceeds 16.855 to the downside without the target having been achieved. Alternatively, if buyers take the futures higher today, exceeding 18.560 intraday — or better yet, closing above it — that would be quite bullish for the near term.

The futures looked bound for a minimum 17.965 when the closing bell rang yesterday, but if that Hidden Pivot fails to slow them down discernibly we could expect more upside to at least 18.375 over the near term. Action near that last number’s sibling midpoint at 17.250 tends to validate the pattern.

Lacking the steadfast support of such sovereign buyers of gold as India and China, silver remains on the disabled list, unable again yesterday to push past a 17.970 peak from October 23 peak that December Gold shredded last week in mere minutes.  In fact, Silver’s current rally, such as it  is, failed to pierce even a secondary peak at 17.800 recorded on October 26 that should have been a piece of cake.  If it continues to barrel higher, gold will eventually drag silver higher. However, I doubt this effect will be seen if December Gold hits 1034.50 and takes a rest, as seems likely. What silver bulls can hope for at the moment is that October’s supply zone, which ranges from 17.210 to  19.175, gets eaten away over the next 2-3 weeks. Even better would be a gold blowout above 1034.50, since that would exert an irresistible pull on silver.

Silver is struggling hard to reach a modest target at 18.375, and it was hard not to notice that yesterday’s thrust failed to get past a look-to-the-left peak at 17.800 recorded on October 26. This would seem to suggest the futures may need another 4-7 days of consolidation before they try and push past a supply zone formed in mid-October that ranges up to the 18.175 peak recorded on October 14.

With yesterday’s close above 17.250, Silver has shortened the odds of a follow-through to 18.375, a Hidden Pivot. The futures evidently will need to be dragged higher by gold, however, since, on their own, they have been unable thus far to push through a thick supply zone created last month that December Gold effortlessly speared yesterday.

The ease with which yesterday’s thrust took on some recent peaks on the intraday charts suggests buyers will be  back again today. The rally has already popped above a key midpoint resistance at 17.250, but Silver is still lagging gold, and the futures will need to close above that midpoint to show they can reach its ‘D’ sibling, 18.375.