June 2012

We hold 200 shares with a profit-adjusted cost basis of 26.46. For now, use a generous stop-loss at 26.44, which is where the hourly chart would turn nasty.  At the same time, continue to offer 100 shares (or half the original position) to close at 30.17. _______ UPDATE (10:02 p.m. EDT): For now, raise the stop-loss to 27.12. Also, instead of closing out another piece of the position, let's try to sell calls against the stock if and when SLW gets within 15 cents of a Hidden Pivot target at 29.90 (daily chart, A=25.12 on 5/30). For each round lot of stock still held, short one July 30 call. I estimate that they'll be trading for around 1.25-1.30 with the underlying at 29.80.  ______ UPDATE (June 20, 3:47 p.m. EDT): In the wake of yesterday's gratuitous spasms, I'll recommend raising the stop-loss on our position to 27.39 today. That's where the hourly chart would turn impulsively bearish. _______ UPDATE (9:52 a.m. EDT):  For the umpteenth time, we have made a timely and profitable exit from this dog when it disappointed us. The stock gapped down to 27.84 on the opening, trading as low thereafter as $27.28, presumably on its way to Hell.  The fact that SLW has generated a bearish impulse leg on the hourly chart wthout having achieved its most recent rally target is telling me it's time to give up on the stock and move on to other stocks that show more promise.

Silver doesn't look quite as punk as Gold at the moment, but neither does it look capable of the burst it will take to vault the 29.260 midpoint resistance shown.  Once that Hidden Pivot is breached to the upside on a closing basis, its 30.605 sibling will become no worse than an even-odds bet.  Alternatively, a bearish target at 27.530 will remain in play (60m, A=29.675 on 6/7), predicated on a close beneath its p sibling at 28.310.

The futures have opened Sunday evening with a downward lurch, creating a bearish impulse leg on the hourly chart while denying us an opportunity to try shorting the modest, 1653.30 rally target given here earlier.  Caution is the watchword for now, since my intermediate-term outlook is bearish and a $70 plunge could come at any time.  Be that as it may, bulls will have a chance to salvage the day at the still undetermined 'p' midpoint of the developing pattern shown. Pivoteers are encouraged to give it a try, bottom-fishing there with a stop-loss as tight as three ticks, if a picture-perfect opportunity takes shape. _______ UPDATE (11:19 a.m. EDT):  The futures took a $10 bounce, hypothetically worth as much as $1000 per contract, from the exact, 1617.60 midpoint support of the pattern shown.  If you are still long a piece of the original position and let me know in the chat room, I'll establish a two-contract tracking position for your further guidance.

Index futures have begun Sunday evening with a spongy reaction to the supposedly momentous vote in Greece -- as though Wall Street were more interested in, say, the Sandusky trial than the financial future of Europe. The short-squeeze high for the move so far, as of around 8 p.m. EDT, is 1347.50 -- equivalent to a Dow thrust of about 90 points. However, DaBoyz will need to goose this vehicle above May 10's peak at 1356.75 to generate an impulse leg of daily-chart degree (see inset). None of this affects the viability of the 1378.25 rally target given here earlier, however. It can still be used a a minimum upside objective for this week, although I might have expected it to be in-the-bag by Sunday night.

[The following was written a day before Greece's election. Although the outcome seems unlikely to live up to its cliffhanger billing, it'll be interesting to see how U.S. markets react when index futures begin to trade Sunday evening. Our guess is that the institutional provocateurs who control the markets will use the outcome, whatever it be, to short-squeeze the bejeezus out of stocks. If they do, you should be ready to sell this last-gasp bear rally short. Click here to join us as we attempt to pick the Summer of 2012's exact top. RA] As the weekend approached, the outcome of Sunday’s election in Greece was being touted by the news media as “a cliffhanger,” a “Lehman moment, and “too close to call.”  But does anyone actually believe the ultimate outcome is in doubt? The drumbeat reminds us of the sensationalized news coverage that froths up every time America’s do-nothing Congress approaches a budget deadline. Greeks have been rioting in the streets for the better part of a year, and so it seems likely that even if they vote to stay in the EU, they will struggle in vain to fulfill the terms of future bailouts. Under the circumstances, political sentiment will continue to shift left, ultimately giving the radical Syriza party effective control of the nation’s political and economic machinery. A Marxist takeover of a deadbeat nation that owes everyone would be bad news for Europe, but it is predictable that stock markets around the world will turn riotously bullish no matter what the outcome. Bad new is good news on Wall Street these days, and good news -- i.e., a vote on Sunday to retain the status quo -- would be even better. Our hunch is that even if a military junta were to seize control of Greece’s

Assuming the point 'C' high survives the night, traders could bottom-fish at the 28.260 midpoint support of the pattern shown using a stop-loss as tight as three ticks (although camouflage would be the preferred way to board).  Keep in mind that a larger, bearish pattern (30-minute, A=29.640 on June 7) projects to as low as 27.365, subject to a test of its midpoint sibling at 28.230. A bounce precisely from that last number would confirm the 'D' target, and a close below it would imply it's likely to be achieved.

It's been a tiresome slog toward the relatively modest target at 1653.30 shown in the chart.  Because Gold is vulnerable to a $50 plunge at any moment, trades should be initiated only via camouflage on the lesser charts or at clear swing points on the hourly. That implies that bulls should look for their next opportunity on a b-c pullback following a marginal penetration of last Thursday's 1630.70 peak.  The target itself (i.e. 1653.30) is a short, provided you're able to hold theoretical entry risk to $50 or less per contract via camouflage.  Please note that an easy move through the target could imply that gold will be swept higher along with stocks if eurobailout mania erupts Sunday night.

We're looking aggressively these days for low-risk places to short the broad averages, but touts for Friday acknowledge the possibility that weekend elections in France and Greece could trigger an eruption of eurobailout mania with the power to short-squeeze index futures hard on Sunday night.   Get free access to my precise rally targets for the E-mini S&Ps and other popular trading vehicles by clicking here.

I hauled out the 240-minute chart to see how high, really, this hoax could go, and the answer is a hard-to-believe 1378.25, the 'D' target of the pattern shown.  This implies a Dow Industrials rally of more than 400 points. Still, we shouldn't underestimate the ability of the spinmeisters to put plenty of lipstick on whatever pig emerges from elections about to be held in France and Greece.  If the results trigger something like eurobailout mania, short-squeezing this vehicle above the midpoint resistance at 1337.75 Sunday might, we may infer that more upside awaits, presumably to the hard-to-believe target.  Camouflageurs should make ready to buy-stop their way aboard if a quick b-c pullback ensues on the 2-minute chart following a marginal upside penetration of 1337.75.