Ironically, yesterday’s wacky histrionics, driven by Fed drivel, generated a promising ‘counterintuitive’ buy signal when the futures bounced to the green line. The target is 20.855, and this Hidden Pivot resistance will have a better chance of getting hit if the rally reaches the red line today, especially overnight or in the first half of the regular session. The ‘counterintuitive’ aspect of the trade is to be found in the point ‘C’ low, which fell a hairsbreadth above our point ‘A’ low. This barely qualifies as an uptrend, but that is why we call the trade ‘counterintuitive. While most traders are focused on the question of whether the structural support represented by ‘A’ will hold, we’re more interested in whether the barely-an-uptrend ABC trips a conventional buy signal. _______ UPDATE (August 19, 1:22 a.m. EDT): Yet another disappointing day, although the 20.855 rally target is still valid and will remain so unless 19.375 is exceeded to the downside. _______ UPDATE (August 19, 9:10 a.m.): This vehicle has found its way, almost to-the-tick, to a 19.205 downside target on the 120-minute chart, so expect a bounce. Here are the coordinates: a=20/825 on 8/2; b=19.616 on 8/7; and c=20.515. Notice that I have used lower-case letters for the coordinates, implying that the futures’ dispiriting dirge since early August is merely corrective — a bullish flag relative to June’s powerful rally. _______ UPDATE (August 21, 1:07 p.m.): Friday’s low just a hair above the 19.205 Hidden Pivot held, but the bounce so far has been unimpressive. Taking a step back, the selloff from early August’s high still looks no worse than corrective in relation to June’s steep rally. However, that doesn’t necessarily mean this retracement cycle is done punishing bulls. _______ UPDATE (August 22, 1:10 a.m.): Silver looks horrendous. The absolute worst I might have predicted for the Sep Comex, based on Friday’s close, would have been 18.800 (60m, A=20.515 on 8/10; B=19.375 on 8/17), but tonight’s selloff to 18.710 has crushed that target/HP support. That’s why I have used upper-case letters for A & B. Hidden Pivots aside, if this cinder block heads for obvious support, it’s going to fall into the June consolidation zone, which ranges from around 17.28 to 17.95.
