June 2009

The 68.05 target broached here yesterday was tradable, although not with a stop-loss as tight as the 21-cent out I'd advised. The target more or less contained the move for most of the day, but the futures were bounding higher at the bell, threatening to ring shorts' necks yet again on Tuesday. If so, buyers are likely to face at least some resistance in the form of a minor Hidden Pivot resistance at ____ (see chart).  It looks too delicate to use for shorting, but if it shows no stopping power whatsoever, that would strongly suggest crude is going to make $70 easily on this run.

We hold four September 10- June 10 calendar spread for a net credit  of 0.10, a position that cannot lose and which has the potential to produce a gain of around $500. We are also bidding 0.25 for four ____ calls in order to build more edge into our position across a wider range of prices.  Continue to bid 0.25 for the calls today, but step up to a 0.30 on the opening.  The stock looks like it needs to consolidate for at least another day or two before its next leap. By exceeding a Hidden Pivot resistance yesterday at 10.72 (30m chart, where A=7.07), Silver Wheaton shortened the odds of another bullish thrust.

The futures sold off hard after making their high early in the day -- but then, when haven't they done so?  The important thing is that buyers had no trouble pushing the August contract past a Hidden Pivot resistance at 985.80 noted here earlier. Night owls should put a stink bid in at 970.60 stop 969.90 and keep your fingers crossed. If the futures move higher without deferring to our niggardly effort, use a pullback that begins from between peaks 1 and 2 for "camouflaged" entry. _______ UPDATE: Sweeeet. The stink bid worked rather nicely, since August Gold touched a low of 970.50 overnight (i.e., 4 a.m. EDT)  before uncorking a nearly $18 rally to a so far high this morning of 988.30.

July Silver has backed off just a tad shy of the ____ target shown in the chart.  It's an important one, and well-defined, so a decisive breach within the next day or two would be very bullish for the near term.

A Hidden Pivot at 68.05 identified here earlier is still my minimum upside objective, but it is also a potential swing high that can be shorted with a stop-loss as tight as 21 cents. Please note that there is an alternative target at 67.67, but a short at that price looks somewhat riskier to me than one initiated at the higher number.  I've included a chart that shows how both targets were derived. _____ UPDATE (6:11 a.m. EDT):  The stop-loss proved too tight by three cents -- an error in judgment that you should jot down, since your instincts are probably better than mine when it comes to calculating a stop-loss for this vehicle.

We shorted four June 10 calls on Friday for 0.70, effectively legging into the September 10-June 10 calendar spread for "even" (i.e., our cost basis is zero).  Although we cannot lose money on this position, it has the potential to produce a gain of as much as $500 or so if SLW is trading close to the $10 strike when the June calls expire on the 19th.  Now let's see if we can build in a little more profit at the 12.5 strike, bidding 0.25 for four July 12.5 calls (SLWGV), day order. 

Friday's nasty short-squeeze in the final minutes of the session handily exceeded a Hidden Pivot resistance at 922.00, paving the way for more of the same Sunday night/Monday morning. The futures were up moderately around 10 p.m., presumably developing thrust for a leap to as high as _____. The midpoint resistance associated with that number lies at 928.75, but it's not worth much for trading purposes because a print there would be a breakout above Friday's high. From a big-picture perspective, the two peaks to beat lie at ____ and _____. Both are shown on the accompanying chart, and if they are exceeded impulsively (i.e., by a rally with no b-c pullback), even the most ardent bears will have to rethink their case -- or get out of the way.

DaBoyz are doing a respectable job Sunday night keeping Friday's short squeeze from running away before they get their opportunity to shake down widows, orphans and pensioners before the opening bell.  Keep the 940.75 E-Minni S&P target in mind if and when They let 'er rip.

The dollar's bounce last week from a Hidden Pivot support that we'd drum-rolled here lasted all of four days, suggesting that more weakness is on its way.  If so, we should look for gold quotes to blow past $1,000 by no later than mid-week. Our immediate target for the August Comex contract is 1066.40, subject to a "hidden" resistance just above at 985.80. A two-day close above that last number, or a trade more than $4 above it intraday, would be quite bullish for the near term. Will this be the rally that starts gold on its way into the stratosphere?  We have our doubts, since gold's short-term charts suggest quiet strength, but not yet explosive power. That could change overnight, however, if the dollar is about to go "kamikaze." The fact that the Dollar Index has failed to gain traction at some key technical levels in recent weeks is ominous. The trade-weighted Dollar Index settled on Friday at 79.34 and looks primed to test a key support at 77.69 recorded last December. That would represent a 2% decline from current levels, but if the support fails, we might see some panic spread into other markets, particularly T-Bonds. Scary Bond Picture There are already some disquieting signs in the bond pits, notwithstanding a sharp rally in the price of Treasury debt at the end of last week.  The price surge on Thursday and Friday partially recouped earlier, heavy losses sustained in the days immediately before and after Memorial Day. But the bigger picture is growing downright scary, since T-Bond yields have crept back up to where they were before the spectacular futures rally in mid-March, when it was announced that the Federal Reserve was about to embark on a program of "qualitative easing." That's just a euphemism for direct monetization