When we speak of powerful impulse legs, we have rallies like yesterday’s in mind, since it extended a six-week winning streak to include the conquest of yet another “external” peak — the watershed high at 22.055 recorded in March of 2008. This all but guarantees higher highs ahead, and it will serve to fortify us even if the futures should pull back by as much as $6. That said, a longstanding target at 22.505 merits extreme caution, since a tradable pullback from that number appears most likely. I will also flag a new, potential trouble spot at 22.718, a Hidden Pivot target that comes from the weekly chart (see inset). Because the chart is a composite “blend” of various expiration months, the target should not be regarded as precise. However, it will add to the weight of the 22.505 target that we have precisely, giving us yet another reason to take precautions when Silver ascends into an implied (approximately) 22-cent topping range between the two numbers. Long-term bulls should want to see the futures punch through 22.505 within hours of first encountering it.
