July 2011

Unlike the E-Mini S&P, this vehicle has decisively exceeded the intraday highs in night trading and is currently hovering above the 12588 Hidden Pivot midpoint associated with a 'D' target at 12639. That's my minimum upside projection for the very short-term, but it will be catch-as-catch-can boarding at these levels, since the bullish trend is by now well exposed.  Tightly stopped shorts from 12639 look like they'll enjoy great odds. _______ UPDATE (8:00 a.m. EDT): The futures ran up to 12631 overnight, topping eight ticks beneath the target and effectively completing the pattern shown in the chart. The slight shortfall hints of tired action today. The correction from the overnight high projects to 12570, and although I wouldn't suggest bottom-fishing there with the usual microtight stop-loss, the hidden support could prove useful analytically, since a breach, even slight, would portend still more weakness. _______ FURTHER UPDATE (8:29 a.m. EDT): The futures have exploded for who-knows-what-reason, giving DaBoyz the wherewithal this morning to squeeze shorts, yet again, to within an inch of their lives. This gambit points to a potentially tradable high at 12677 with a possible 'camo' buying opportunity on a pullback to its 12629 midpoint sibling. (Click here if you'd like to learn our proprietary trading tricks yourself -- for $50 off the regular price of the Hidden Pivot Webinar.)

Although the futures appeared to struggle yesterday, they ended the day with a slight gain, presumably ready to take on the 1342.50 peak noted here earlier. Once comfortably above it, the September contract will become an odds-on bet to reach an important Hidden Pivot at 1382.35 without too much strain.  Most immediately, there were no compelling opportunities beckoning night owls, since the futures have climbed in after-hours trading to within an inch of Wednesday's intraday high.

Gold and silver racked up another day of solid gains yesterday, providing some of the most encouraging technical signs we’ve seen in several months.  Most impressive was that numerous bullion-related issues that we track were able to generate fresh, bullish “impulse legs” on their hourly charts, much as we might expect from a rally with more than merely short-term potential. (Click here if you’d like to learn more about our proprietary Hidden Pivot Method.) This was true not only for Comex precious-metal contracts, but for such high-octane performers on the equity side as Silver Wheaton, a Rick’s Picks favorite that has been on a rampage, gaining nearly 22% in less than three weeks. Although we’re always eager to go-with-the-flow, it is our practice to closely monitor rallies like this one lest we be caught unawares by the sort of nasty downdrafts that are common in prolonged corrections. The purpose of such corrections is to shake loose all but the hardiest bulls, and that is why we are always guarding against the unpleasant surprise.  Technical analysis aside, we remain open to points of view that differ from our own, currently bullish, outlook for bullion.  To help readers keep an open mind, here is a bearish note that turned up yesterday in the Rick’s Picks forum. The author is Cam Fitzgerald, a frequent contributor. He argues that the looming 2012 election will put a lid on commodity prices. Cam begins his post by addressing the sunny outlook of “Charles,” who wrote that predicting a bullion rally “just ahead” is a no-brainer. ‘Sympathetic’ Decline “I am not with you, Charles. There is something else at play now that relates to elections next year. Commodities will decline and so will the commodity induced inflation threat. This is not bullish for metals. Gold and Silver,

Bullion’s retracement from the May 2 peak has now dragged on for more than two months, providing not only the usual tedium of bull market corrections, but also some lows that may have evoked despair in more than a few investors. It is at such times that we should put aside “feelings,” and focus solely on our mechanical indicators, since they have yet to signal any real trouble -- only the kind that is intended to shake loose the timid and the impatient. It is with the foregoing in mind that this session focused intensively on Comex Gold and Silver futures in the throes of their first promising rally in a while.

To jolt myself out of summer doldrums, I've packed today's touts with action-oriented information and analysis.  A trade in September Silver triggered just as I was publishing the tout, but there were still two key price points left where night owls might be able to jump aboard.

Close scrutiny of September Silver's rally on the 240-minute chart suggests it's a buy at 35.755 despite the gang's-all-here rally earlier in the day.  That number is the 'X' entry point of the pattern shown, and although we typically avoid getting aboard when the entry trigger is as obvious as this one, the pattern in every other respects meets our criteria for a money-maker: three single-bar coordinates; a B-C- pullback whose shallowness matches the k-A segment; and the legitimacy of an A-B impulse leg that has exceeded the required two prior peaks.  The entry price lies just a single tick above tonight's so far high, and if you decide to use it, you may need to be quick.  ____ UPDATE (2:24 a.m. EDT):  Unfortunately, it is not possible to trade and tout at the same time. In this case, Silver blasted past my entry point as I was clumsily typing out the tout.  Anyway, the 36.210 'p' and 37.120 'D' remain valid and are as yet unachieved -- possible opportunities for the deft camouflageur.  This pattern is of the 'What Are You Waiting For!? variety, a point of strong emphasis at recent Webinars. The idea is that if an ABCD formation has everything going for it rules-wise, you should simply trust your eyes and jump on the trade without giving it further thought. (Want to learn how to trade confidently and forecast with uncanny precision?  Consider taking the Hidden Pivot Webinar on August 10-11. For a $50 discount, click here.)

Gold looks revved for a thrust above the important external peak at 1526.50 shown in the chart.  Although that would hardly guarantee a rally to new all-time highs, it would almost surely get the August contract out of the danger zone for now. A breakout might make camouflage tricky to leverage, but keep in mind that it is exactly at such times that Hidden Pivot analysis shines, transforming a graphical picture of panic into the subtle ABCD patterns that we should love to trade.

Despite yesterday's feeble price action, I'll stick with the 1382.25 target given here earlier. The futures may have hesitated because there was no alleged "news" sufficiently stimulating to stir bears from their post-holiday torpor. However, when they regain their awareness that the Mother of All Bear Rallies is still indeed a threat, expect them to forge a powerful new impulse leg with a breakout above the key 1342.50 peak shown.

We'll keep an eye on this vehicle in case it tries something sneaky, but the bigger picture -- one of dueling impulse legs -- hints of yet more consolidation in the weeks ahead. To be sure, the overall look of the chart is bullish for at least the intermediate-term; however, the failure of point 'B' to surpass the 76.61 peak recorded four months earlier hints that any breakout from the pennant is destined for mediocrity, not greatness.