Silver

As I've noted in the latest Gold tout (see above), Silver's chart looks significantly weaker in comparison. The correction from January's record 121.23 has breached the midpoint support (p=68.390) by a significant amount, setting up what can only be viewed as a 'textbook' mechanical' short on any rally that touches the green line (x=80.203).  That implies the futures could fall as far as D=44.765 after peaking at x or somewhat higher.  I prefer to analyze each chart on its own, rather than complicate the picture by tying it to another, even if they are close cousins. We'll have to see what the new week brings, but I've mentioned in the Gold tout that bulls would seem to hold the edge here. ________ UPDATE (Feb 9, 11:12 a.m.): See Monday night's chat room discussion for further guidance.

The chart is similar to the one I've drawn in Gold, with a 0.625 retracement serving as a target for Silver's breathtaking correction. It came off a record high on Thursday that missed a 122.215 Hidden Pivot target I'd drum-rolled by a millimeter.  Friday's bounce left the futures sitting nearly $3 above the 50% line, but if the correction is going to match Gold's, a retracement to 64.18 is needed.  Be prepared to bottom-fish there with a 'camo' trigger, since 64.18 is not going to be on the radar of most traders, derived as it is from a low recorded last April that is idiosyncratic, although not obscure. ______ UPDATE (Feb 2, 7:55 a.m.):  I've switched the view, since trying to synch the charts of gold and silver grew confusing. This picture affords 'safe passage' to at least d=91.285, a Hidden Pivot that lies  $6.80 above. If it shows little resistance, I will adjust by lowering point 'a' to produce a higher target.  In the meantime, a pullback to the green line (x=76.221) can be bought 'mechanically' with a 71.190 stop-loss.  That implies more than $5000 of entry risk per contract, so the trade is recommended only to subscribers able to craft a 'camouflage' trigger. _______ UPDATE (Feb 4, 10:59 p.m.): The suggested trade racked up a monster profit of $75,320 per contract for anyone who boarded at 76.221 and exited two days later at my target, 91.285.  What happened next should not have surprised subscribers: the futures wafted slightly (47 cents) higher, then fell moments later into a hellish dive that took them all the way back down to, so far, 73.415, a tad below the trade-entry price. 

The ballistic, $30 climb since December appears to have topped within spitting distance of my 103.215 target. That could be it, but I'm not counting on it, especially since I have higher targets outstanding in gold. The chart shows an alternative possibility at 122.305 that leaves room for a further rally of 18% above Friday's high.  The pattern itself is unusual, but I am comfortable using it to project yet another, potentially important, high because I've seen this one work before in a roughly matching time frame.  Be prepared for a stall or worse at 109.043, the secondary Hidden Pivot. ______ UPDATE (Jan 26, 5:30 p.m.):  Everyone's been telling themselves they'd buy this little monster on weakness. Well, here it is.  The 98.575 target shown in this chart is almost certain to be achieved, but it is tied to a pattern that every clown in the trading world sees and is planning to use.  If you plan to join them, make sure its with a 'camo' trigger that they wouldn't know from a barstool. Alternatively, shorting x=107.035 'mechanically', stop 109.860, will enjoy better odds.  I'll publish more correction targets if and when they become available. For now, though, there are only 'conventional' patterns to use for that purpose.  Because I'd rather not bump heads with a thousand clowns, you'll have to be patient until more rABCs develop, including the obscure ones I prefer.  _______  UPDATE (Jan 27, 8:29 a.m.): Silver picked up strength overnight and never looked back, never mind fulfill the 98.575 correction target identified above. The major Hidden Pivot at 122.305 will likely be achieved and still deserves caution, but I am not going to lay odds that it will cap the bull market.

The chart summarizes various scenarios for Silver that can be inferred from the Hidden Pivot Method. I've previously identified the 103.215 target, a major 'hidden' resistance that could conceivably cap the steep bull cycle begun from around $50 in late November.  But first, the current correction is likely to come down to at least 84.645, the 'd' target of the rABC pattern shown. If the slide continues, prepare for a further retracement to as low as 80.285, the 'd' target of a larger rABC pattern that goes back to the minor peak recorded at 82.76o on December 29. A renewed upthrust could ensue from either number, and its strength presumably would be easy to gauge based on price action at midpoint Hidden Pivots of varying degree. Two further possibilities are suggested: a runaway bull market, which is what the trend would become above 103.215; or a possible nascent bear market after a breakdown beneath d=80.285. The targets mentioned above should be considered as pre-empting any identified earlier. _______ UPDATE (Jan 19, 1:07 a.m.): Silver did its rude thing again Sunday night, blasting off to new highs while bulls and short-covering bears waited in vain for a smash to produce some bargains. Now it's on its way to at least 96.470, another downpayment on our ripening target at 103.215.

The futures punched through the 79.38 midpoint Hidden Pivot shown on Friday, but when they settled above it, that all but guaranteed the uptrend will continue to at least 85.235, the 'D' target of the pattern.  Because the point 'B' high is pure 'sausage', I've made certain to start the pattern with a distinctive one-off 'A' low.  For that reason, D=85.235 should show precise stopping power that can be shorted with a 'camo' trigger. Any further progress to the upside would likely encounter new resistance at 86.860, the target derived from sliding 'A' down to December 31's 69.575 low. It would be shortable as well. _______ UPDATE (9;38 a.m.): The 85.235 target has stopped the rally, but not precisely and probably not for long. _______ UPDATE (Jan 13, 9:17 a.m. EST):  March Silver's decisive push through p=86.235 this morning has put D=103.215 solidly in play: https://bit.ly/3NHjcnz

A big reverse pattern going back two weeks shows a key resistance at 75.510 if the futures should rallly from the hole they've dug themselves since topping at 82.67 on December 28.  The 'D' target associated with that midpoint Hidden Pivot lies at 81.795, which would fall just shy for the old record. More immediately, however, a smaller, bearish pattern targetd on 70.810 must run its course before bulls are likely to find traction.  If they don't and the March contract slips below 69.255, that could put it into a dive to as low as 65.40 over the near term. Look for a tradeable bounce there if the 'hidden support' is hit.

Silver has used up all big-picture targets going back to a time when a single ounce sold for less than $4, leaving us with only sketchy 'extension' targets along the C-D leg. They project possible 'D' resistance at 81.240 or perhaps 82.295, but I see little practical value in these numbers, let alone a reason to short them. It is a severe bear-squeeze that is driving quotes in the first place, and no one can say with confidence how high it will go. As a practical matter, however, you can't go far wrong taking some profits if you've held silver or its equivalent from lower levels. Once you've done this, it will become easier to decide how much exposure you want to retain. Keep in mind that when the ballistic ascent finally breaks, the plunge will allow no easy escape, much less a good profit-taking opportunity. Even if it should come from a high of, say, $150/oz, there might be no exit possible for the first $50 of the fall.

Silver's ballistic ascent has left it out-of-synch with gold, which looks months away from a potential bull-market top. At the rate Silver is climbing, it could hit a correspondingly important target at 70.810 by Christmas. Since we should always have an alternative target lined up, I would need to create an extension with the C-D leg, shifting 'A' to the November 21 bar whose bottom is 48.710. We'll wait until 70.81 is hit before doing so, but be prepared for a significant (and tradable!) pullback when the target is hit. _____ UPDATE (Dec 23, 3:47 p.m.): The $2.07 pullback this morning from within 1.5 cents of the target billboarded above was brief and nasty, but it could have been worth as much as $10,000 per contract to anyone who traded against the trend. Silver's subsequent swift reversal to the upside suggests there is no stopping it. It has since traded within four cents of the 71.83 target of a much larger pattern aired here earlier, but only time will tell how much stopping power this major Hidden Pivot shows. _______ UPDATE (Dec 23, 9:34 p.m.): Silver futures have traded 47 cents above a 71.73 target that comes from the weekly composite chart. Visually, the overshoot is inconsequential, and the target itself, although imprecise because it comes from a blended chart, is too compelling to write off as yet. I'm, done projecting higher targets for the time being, however, since there are no bullish patterns remaining in any time frame that I like.

Friday's punitive reversal breached p=61.910 decisively, so the yellow flag is out. A tradable implication is that a rally now to the green line (x=63.497) would trigger a 'mechanical' short.  The pattern could also prove useful for bottom-fishing the decline using the lesser charts to set up 'camo' triggers at p2=60.322 and d=58.735.  We should also be alert to a possible breach of d. Although I don't expect it, that would signal a potentially bigger correction than the $6.35 selloff I warned about in the trading room. ______ UPDATE (Dec 17, 10:04 a.m.): Silver has uncorked yet another powerful rally -- as usual, without having fully corrected to a minor 'd' target. In this case, d=58.735, but the futures went no lower than 61.105. The upward reversal also made short work of the 'mechanical' short suggested above after failing by 20 cents to fall to a midpoint Hidden Pivot at 61.910 where the short could have been covered, at least partially,'by the book'.  The cautionary numbers noted above still obtain, meaning that a $6.35 correction is still overdue, and that a $1.58 drop would signal its onset. In any case, using a smaller, conventional pattern yields minimum upside over the near term to at least 69.250 (daily chart, A=56.850 on 12/4). A pullback first to x=63.074 off the current so-far high (66.650) would trigger a very opportune, 'mechanical' buy.