June 2012

Friday's impressive surge brought this vehicle to within a hair of the 447.16 target we looked at during a recent online tutorial session. That is neither bullish nor bearish per se, but it wouldn't take much more to re-fortify buyers for a sustained move. Specifically, bulls need only hit 458 to knock off five prior peaks on the hourly chart. These are shown in the inset, along with last week's push to D=447.16.

After mucking around for three weeks, Silver's intraday charts went mildly impulsive with Friday's robust surge. However, bulls will have an excellent opportunity to shift into high gear when the new week begins, since it would require only a modest rally to blow past four prior peaks on the 480-minute chart (see inset). If and when this happens we can use the 32.280 midpoint resistance of the big pattern shown as a minimum upside objective for the next 2-3 weeks. More immediately, camouflage for belated buying will be difficult to come by following last week's impressive finishing stroke.  My suggestions is to leverage a b-c pullback from just above any of the several peaks discernible on the 30-minute chart going back to May 18.

The bottom of Friday's plunge fell an inch from the 1272.00 midpoint support flagged in the update I posted intraday.  This corroborates and affirms the pattern itself, along with its 1209.75 'D' target.  We may infer that a further decline to that last number is an odds-on bet if p is decisively breached (which in this case means by more than 2.00 points). Meanwhile,  I would expect DaBoyz to play it gingerly Sunday night in order to create the impression that no panic impends.  They might succeed if the news environment is not too bad, but any rally would be a short nonetheless. Since I'll be traveling back to Denver on Monday, I'll leave it to Pivoteers to find a painless way to get aboard.  Suffice it to say, we should expect rallies of all degree to fail at either their p midpoints or d targets.

July Crude will have a chance to pull out of its tailspin at 80.55, the 'D' target of the pattern shown.  It looks like a good place to attempt cautious bottom fishing or to hedge a short position held during the decline. Keep in mind, however, that, barring some black swan event in the Middle East, my expectation is for much lower prices -- perhaps 50 percent below current levels. The likely cause would be a combination of global recession/Depression and the washout speculative forces in commodities. _______ UPDATE (June 7, 10:08 a.m. EDT):  A quite strong dead-cat bounce (and that is almost surely what it is) has occurred off an 81.21 low. Its first test will be the 87.47 Hidden Pivot target of the pattern (240m) A=83.31, B=86.27, C=84.51.  An easy move through D would portend more upside over the near term. _______ UPDATE (June 14): The  dead-cat bounce hit 87.03, 44 cents shy of the midpoint resistance I'd noted, before collapsing two days later to a new low at 81.07.  Much lower prices impend, and so all positioning should be from the short side.  Camouflage tactics can help us get short even when corrective rallies do not quite reach their targets as occurred this time.

Gold continues to hover above its quadruple-bottom level of approximately $1530, and we doubt that we are the only ones who have considered the possibility that the support level will be broken shortly after the Non-Farm Payrolls report is released at 8:30 a.m. Eastern time today.  That notion makes the midpoint pivot at 1548.30, shown on the attached chart, look rather vulnerable, while the notion of a quadruple-bottom being broken makes the pattern's 'D' target at 1521.90 look rather vulnerable as well.  But it sure is a good-looking pattern, so we ought to be aware of it.  Much less delicate is our stalwart 'D' target at 1456.40.  We continue to believe that the series of lower highs, which yesterday acquired a new member at 1574.60, will give us a good sense of whether and when gold has made an important low.  Again we would put the emphasis on 1601.40 in this regard.  (Posted by Doug “harry” McLagan) _______ UPDATE (June 1, 2:00 p.m. EDT):  During the night the futures traded down to a low of 1548.60, three ticks above one of our targets, and then bounced by more than eight dollars before making a lower low.  Eight dollars seemed like a decent amount until today's post-NFP rally, which has been an order of magnitude larger and is still underway.

Today's touts include the Dow Industrials, which look like they're about to let the other shoe drop.  A feint higher could set up the bull trap needed to make the next down-leg memorable, so don't miss an opportunity to go home short for the weekend if it should happen today.

No change. Buyers would need to push the July contract to 29.005 to get back in the game. Alternatively, a relatively small decline to 26.195 would re-activate an old target at 20.370. A potentially last-gasp rally to 28.985, a midpoint pivot, should be used by camouflageurs to get short provided entry risk can be held to a theoretical $70 per contract.

The Gold Miners ETF has been in a trading range for about a week, after making a potentially major low on May 16.  While bouncing up and down, GDX has traced out several attractive patterns, two of which have already rewarded tightly-stopped trades at their midpoints.  Unfortunately these two patterns point in different directions, and we are left to guess where GDX is going next, to its bearish 'D' target at 42.23 or its bullish 'D' at 46.90.  The good news is that hidden pivotry enables bulls to use a bearish pattern by going long at the lower target.  For a trade, we would buy at 42.26 with a stop at 41.99.  For an investment, we would size the purchase appropriately and omit the stop.  (Posted by Doug “harry” McLagan) _______ UPDATE (June 1, 2:15 p.m. EDT):  GDX decided that its destination was 46.90, and it zoomed up to 46.85 during morning trading for a quick 7% gain.  It has hovered just below that level for two hours now.

Yesterday afternoon's 's 22-point Whoopee Cushion bounce came off a low that lay just 1.50 points from the 1295.75 correction target flagged here.  Strictly speaking, there was no trade for those bidding at the Hidden Pivot.  However, using a camouflage strategy could have produced a different and rewarding outcome. Notice in the 3-minute chart (see inset) that the initial thrust was a compelling impulse leg with a one-off 'A', two single-bar coordinates and an entry trigger at 1303.50 -- in short, a 'What are you waiting for?' trade for Pivoteers alert to the possibility of a turn at or near 1295.75. The important thing to note is that the best -- and easiest -- entry opportunities are invariably those signaled on charts of minute degree following a price reversal at or near p or D.  For the trader, the trick is to act rather than think when all the ducks are so beautifully aligned. For Friday, bulls were holding a small edge as of around 1:15 a.m. Sticking with the 3-minute chart displayed above, the relevant pattern is A=1297.25 (5/31 at 11:09 a.m. EDT), B=1319.00 and C=1299.50. The implication is that a decisive pop through the 1312.50 midpoint resistance would send this vehicle on its way to D=1323.25.  Camouflageurs can start looking for a way in after the 1307.00 trigger is hit. ______ UPDATE (10:02 a.m. EDT):  Ahh, all is right with the world! Following the Dow's lead, the futures are in 'plummet mode' today, a Friday, DaBoyz having been unable to promote a short-squeeze on such dismal economic news as the markets have received this morning. (It seems, finally, to have dawned on the thieves, miscreants and mental defectives who make their living abusing OPM that this cannot lead to looser money because money is already as loose as