January 2012

The next crucial test for buyers lies at 82.99, a peak made on the way down in September. Its breach to the upside will be necessary to refresh the bullish impulsiveness of the daily chart. Success seems likely, given that there are so many uptrending ABC patterns acting simultaneously on this vehicle. However, a quick drop to 79.51 would be reason to rethink the bullish scenario, since that would generate the first bearish leg we've seen on the daily chart since mid-October.

The futures were slithering higher Monday night on zero volume, doing what they lacked the guts to do during daylight hours on Friday. Specifically, they've inched above a significant external peak on the hourly chart -- in this case, Friday's high. Assuming that there are at least a few bears ready and eager to hit the panic button, we should see the 1316.75 rally target (see inset) given here earlier achieved before the day is over.  Alternatively, it would take a print down at 1269.25 today to break the bullish fever.

'Dueling' impulse legs on the hourly chart would seem to limit the immediate potential of tonight's already timid rally. It projects to 30.255, with a 'camo' entry signal at 29.875 that has already been triggered. The midpoint resistance lies at 30.000, and it is a bullish sign, at least for the very near-term, that this Hidden Pivot has been exceeded so far by three cents. Any progress above 30.255 would bode well for the coming days.

'Dueling' impulse legs on the hourly chart show bears with a small edge at the moment, although a relatively modest pop to 1651.30 -- $5.30 above current levels -- would generate a healthy impulse leg that would raise our focus toward the 1681.50 target of the pattern shown.  (And so would a close above that Hidden Pivot's midpoint sibling, 1653.60. ) Night owls should note that a serviceable 'camo' pattern is already in motion, based on the following coordinates from the 30-minute chart: A=1636.50 at 11:30 p.m. EST Sunday, B=1648.00 at 4:30 a.m. Monday. Want to learn how we use Hidden Pivots and “camouflage” to reduce entry risk to relatively small change? Click here

Fighting the Fed is one thing. But fighting a global monetary blowout? Forget it. The financial system is so glutted with virtual dollars these days that U.S. stocks would probably hold their ground even if nuclear war were to erupt. Although Friday’s news admittedly fell shy of that threshold, we might have expected a little more deference on Wall Street toward news that Standard & Poor’s had downgraded the credit of France and Austria. Granted, this could have shocked no one, since France had all but begged its comeuppance by pretending to be Germany’s co-equal in the ongoing eurobailout dog-and-pony show. Still, we had come to expect share prices to at least defer perfunctorily to such news, since prop-desk traders typically knee-jerk in whichever direction they expect their algorithm-driven, bipolar colleagues’ knees to jerk. Thus, when the news is ostensibly bad, as was the case on Friday, it’s supposed to cause institutional money to flow out of stocks, much as it flowed out of Carnival shares after one of its liners ran disastrously aground Friday off Italy’s coast. Not this time, though. With Europe once again inching toward a supranational bankruptcy, the Dow fell a ho-hummy 49 points. This seemed especially unusual, if not to say unseemly, given that U.S. markets would be closed on Monday for the Martin Luther King holiday. Under the circumstances, we might have expected traders to take the precaution of fully discounting the scary euroheadlines that were certain to come over the weekend. As indeed they did. Even the Wall Street Journal, a reliable cheerleader for the pathetic, crackpot idea that massive new sums of ginned-up money can “save” Europe, weighed in with some uncharacteristically grim assessments. Gold, for its part, rose moderately, perhaps because the bullion bankers and their friends in very high places

March Silver was in a moderate uptrend when we looked in on it, creating a subtle camouflage opportunity that looked too juicy to pass up. We initiated the trade – several students in the room later reported making money on it – for reasons that are made clear in this recording. The entry risk of $325 was five times what we would ordinarily have wagered on a single Silver contract, but you can judge for yourself whether this was the right call. Subsequently, Silver sank like a stone after taking a fleeting leap above the ‘p’ midpoint. This posed little problem, however, since we’d had a chance to take a partial profit at ‘p’ and a further 20 minutes to exit the rest of our position before the futures fell to our break-even price. And that is the beauty of camouflage – the ability to make money on a trade even when we are ‘wrong’.

Rick was recently a guest on The Financial Survival Network radio program. In this wide-ranging interview, he discusses gold, silver, the dollar’s undeserved safe-haven status, Europe’s crisis, the bogus dollar-swap arrangement and the frightening global geopolitical scene.

I usually put little store in head-and-shoulder patterns because they pop up everywhere one looks, but the one that Corn has been tracing out for the last year is hard to dismiss.  Beleaguered bulls will find little comfort in the specimen pictured, since yesterday's hellacious plunge did not even bring it down to the neckline. From a Hidden Pivot perspective, it would take an impulsive rally exceeding the  'external' peak at 679.50 to abort the pattern.  Failing that, Corn's bear market could eventually hit 480.

March Silver went impulsively bullish on the lesser charts late Thursday night, but this was after it achieved a 'D' target on a pullback. That suggests bulls will struggle on Friday and that any trades from the long side be done via a 'camouflage' entry that poses no more than $70 of theoretical risk per contract.  At exactly 1 a.m. EST, the three-minute chart showed an 'camo' pattern with a potential entry trigger at 29.985.  The coordinates are as follows: A=29.875, B=30.010, C=29.950 (Note: That last number is very tentative).  This set-up may be gone in five minutes, but I have presented it nonetheless so that you'll have an idea of what to look for if you want to get aboard tonight using charts of least-most degree.  Want to learn how we use Hidden Pivots and “camouflage” to reduce entry risk to relatively small change? Click here