December Silver traced out a pattern Friday morning that closely resembled the one I’d sketched to illustrate a possible ‘counterintuitive’ buying set-up. This time, however, we took a pass, since the entry signal came at a time of day when bullion seldom reverses vigorously to the upside, especially in the absence of crypto-dovish talk from the Fed’s chief spokesclown. The decision subsequently proved to be the correct one, since the futures never even made it to the midpoint pivot, where we might have cashed out half the position. The 20.350 rally target remains valid nonetheless, and there are at least two ways to get aboard for the presumptive ride. The first would be to use a counterintuitive entry similar to the one I’ve sketched — similar, actually, to the one we rejected for reasons of timing on Friday; the second would be via a ‘mechanical’ bid at the 19.533 midpoint pivot, stop 19.260. That would imply initial risk of about $1300 per contract, but you could shrink it to a theoretical $60-$80 by using ‘camouflage’. This implies entering on an uptrending ABC pattern of very minor degree once 19.533 has been touched on the way down. This tactic is recommended only for those who fully understand it, but if you’re eager to learn, stay tuned to the chat room discussion in real time._______ UPDATE (Sep 26, 7:29 p.m. ET): The futures came down to the 19.533 midpoint pivot of the large pattern shown here yesterday, tripping a ‘camouflage’ buy signal thereafter at 19.486 (the green-line ‘x’ in the new chart shown). Half the position would have been exited for a profit at p=19.513 if you’d played it by-the-book. However, I won’t establish a tracking position unless I hear from at least two subscribers in the chat room who got aboard using a tactic similar to the one described above. Notice that the theoretical entry risk on this trade would have been $150 per contract. That is more than I had estimated but still not too bad. It compares with initial theoretical risk of about $1300 per contract via a ‘mechanical’ entry.
