June 2012

Suspiciously, yesterday's $21 rally fell an inch shy of the 1589.90 threshold where I'd said the week would be off to a good start. Buyers could well muster the requisite push today, but the fact that they missed on the first try portends a struggle to move this vehicle significantly higher. Most  immediately, that means the 1598.10 midpoint resistance shown could be a rally-stopper. If not, its 'D' sibling at 1637.60 would become an odds-on bet.

Silver did what we asked of it yesterday, surpassing an 'external' peak at 27.005 to generate a little bit of heat on the lesser charts. However, just to make sure it's not playing us, let's raise the bar today to 27.980, where bulls would effectively refresh the impulsive energy of the hourly chart (as they should if this rally is fated to go anywhere). Strictly speaking, they deserve the benefit of the doubt anyway, since Monday's thrust exceeded no fewer than one internal peak and three closely spaced externals. Also strictly speaking, the July contract would trip a buy signal on any booster-stage rally of at least 24.125 cents from an as-yet-unformed point 'C' low.

Yesterday's plunge somehow avoided the finale of its projected fall to a 1296.25 target, but that could be remedied shortly. In any case, a rally back up to the 1314.00 midpoint would be a short -- one to be initiated via camouflage, as is our practice whenever we leverage midpoint supports and resistances for trading purposes.  If 1296.25 should fail as support, you can put Hidden Pivots aside and assume that a test of early June's lows near 1260.00 impends. _______ UPDATE (11:24 a.m. EDT):  The futures rallied precisely to 1314.00. Since a chat-roomer reported initiating a short there, I'm going to establish a tracking position for your further guidance, that assumes an initial position of four contracts. If you haven't taken a profit yet, do so now at around 1306.50. Tie the remaining two contracts to a stop-loss at 1316.25. _______ UPDATE (2:27 p.m.):  We exited on the stop-loss for a theoretical gain of perhaps $250/contract.  We'll continue to look aggressively for opportunities to get short in this presumptive bear market because: 1) we can, usually painlessly even when we are "wrong"; and 2) we don't want to miss the avalanche when it comes, as it surely will.

A print at 1683.20 (see inset) is where bulls would come back to life, but otherwise we should expect the August futures to continue lower over the near term, testing the Hidden Pivot support at 1469.40 shown in the chart.  More immediately -- and less ambitiously -- it would take a print at 1589.90 to get the week off to a promising start, turning the 30-minute chart bullish.

On Saturday, Rick again appeared on The Korelin Economics Report, where this week's topic of discussion was the gold market and where it's headed. The transcript of the interview is shown below. The audio may be heard here. (Rick is interviewed in segment #4) Al Korelin: Okay. Here to wrap up the first hour of the weekend edition of the Korelin Economics Report. Thank you for joining me, particularly our newest listeners and folks down in Portland, Oregon, listening on radio station KUIK. I’ve got Rick Ackerman on the line with me right now. Rick is one of the best technical analysts who I know. Rick and I, I think, are on the surface initially disagreeing, I should say, on one concept. That is, Rick feels that from a technical standpoint, we’re going to see the price of gold go down, specifically on the August contracts… August futures, I should say. We’re going to see it down at $1497. My personal feeling is hard for me to swallow that, only because I’ve never seen such a great time - from a fundamental standpoint - for gold to appreciate in value, for lack of a better term. Now, I want to get an explanation from Rick as to why he feels this way, because he has certainly been involved in this for as long as I have, and he’s a very bright guy. He doesn’t just shoot from the hip unless he’s got some fairly serious backup ammunition, for lack of a better term. Rick, why exactly do you feel that we’re going to see gold go down in price? Rick Ackerman: Well, mainly it’s from a technical standpoint. I look at charts with patterns that have ABCD configurations. I look for an AB - what I call an impulse leg -

I'm adding this ETF to our list of vehicles to be shorted every blessed chance we get.  Although I cannot predict how things will play out Monday morning, two places to look for camouflage cover  are noted on the chart, respectively, at p and D.  The same offer I've made in conjunction with the QQQs applies: a free year’s subscription, including access to weekly tutorial sessions, to the first Pivoteer who signals a trade that survives for at least 24 hours. You will also receive a second annual subscription to be awarded to the recipient of your choice; and a one-hour private tutorial session worth $350.  To claim your prize, the trade must be initiated using a Hidden Pivot signal, and the signal must be disseminated in the chat room in timely fashion so that at least two others have been able to get aboard.  _______ UPDATE (June 19, 1:33 a.m. EDT): The weekly chart has tripped a sell signal at 125.47 (A=133.14, B=120.19), giving camouflageurs a green light to attempt getting short. Beware, however, of a possible bounce from 122.23, the pattern's midpoint support.  _______ UPDATE (June 28, 10:53 p.m.):  A still-bearish big picture remains viable, but shorter-term indicators suggest the Dow is likely to move higher before it falls hard.  Under the circumstances, this vehicle should be shorted cautiously only at 'd' rally targets or, via camouflage, 'p' midpoints.  _______ UPDATE (June 29, 8:59 p.m.): Much as I'd love to short this flying sow right now, the lesser charts that we might use to do so are filled with menace. Perhaps Monday will bring better opportunities, assuming the Diamonds have traded outside of Thursday's nervous range.

The futures have looped over to set up the possible buying opportunity described in Friday's tout, but it feels too pat to me to be worth much to traders Sunday night. Da Boyz have taken the futures down to within inches of Friday's lows, and unless some shard of horrific news emboldens them to break the support and shake down panicky sellers, odds at the moment seem to favor a short squeeze more than a washout. Still, if the downdraft comes and the 'C' high at 1331.75 is still intact, you could do worse than try bottom-fishing the 1314.00 'p' of the pattern shown. Since that's precisely equal to an 'external' low from June 14, camouflage is recommended.  One last tip: Be on guard for a marginal breach of 1314.00, a running of stops, and then a trampoline bounce from the ostensible danger zone.  If the bounce doesn't come, though, we'd be looking at a likely plunge to its 'D' sibling, 1296.25.

The tout billboarding "much lower prices" for August crude has appeared in the daily list for so long that I decided to stick my neck out by making it the subject of a commentary.  My inspiration was CNBC's laughable article online about how a "softening" of crude prices could "stimulate" the economy.

Crude oil prices appear primed for a nearly 30% collapse, implying that the global economic slowdown is starting to take hold.  Our minimum downside projection for August Crude, currently trading for around $80 a barrel, is $55.69.  That target was derived using our proprietary method of technical analysis and would imply a decline of 27% from current levels. Please note that this is our minimum bear-market price objective and that crude’s ultimate bottom could be significantly lower. How much lower?  If the “Hidden Pivot support” at $55.70 were to give way easily, we’d infer that quotes as low as $35-$40 a barrel impend. That might be viewed as great news by the mainstream media, since it suggests that gasoline prices are headed below $2 a gallon. But that’s like saying a nuclear detonation in midtown Manhattan would be great news for apartment dwellers because it would solve everyone’s cockroach problem. CNBC’s “experts” seem to think that a mere softening of crude prices would act as a kind of tax-cut stimulus for the U.S. economy. But softening is not what we foresee -- more like a deflationary bust in a key global commodity to which huge swaths of financial assets are tied. And although we’ll concede that more travelers will hit the roads this summer if gasoline prices fall below $3, the gain in tourism dollars  would not be much of an offset to the global economic collapse that appears to be gathering force. Summer of ’87? At this  point, it looks like a perfect storm. Europe’s economy is about to go into a recessionary free-fall, China’s slowdown is looking increasingly like a hard landing, and the U.S. is at cliff’s edge on jobs, income growth and consumer confidence. Statistically speaking, all are fading so fast that it seems clear the