Rick Ackerman

Like the bounce in gold, silver's rally is suspect because it follows a death-dive that breached two major lows recorded in the final quarter of 2020. That implies the bounce, now in its second week, is corrective, although not quite necessarily doomed. Indeed, it would hardly be unusual for a rally with legs to develop following a dip beneath a support that too many bulls were counting on, as has surely occurred here. However, because quite a few of them will have been stopped out, silver should be sufficiently lightened of profit-takers to climb like an F-22 Raptor. So far, except for the first day's bounce from the low, that has not been the case. But because the rally accelerated as the week ended, we'll give it the benefit of the doubt for now. I will connect up some ABC dots if and when the bounce either surpasses some minor 'external' peaks on the intraday charts  (the first lies at 24.38), or tops and relapses.

Bertie is bound most immediately for the 49,848 target shown in the chart, scaling an ABCD ladder that can still be used to get long 'mechanically', especially in the event of a violent pullback. To be clear, however, the trajectory leaves little doubt that the bull cycle begun from the summer's lows near 30,000 will eventually exceed the target and achieve new record highs.  This phase of the rally has been far steeper and less time-consuming than I had anticipated, but in retrospect we can see that the basing period entailed mostly churning bottom-fishers viciously until the last of them threw in the towel. On one recent day, for instance, Bertie stopped out bulls no fewer than nine times with a series of lower lows on the hourly chart. This sort of nastiness has been fractally replicated on the larger charts via fake-out rallies occurring off lows at, near or slightly beneath previous, too-obvious lows.  My expectation of a more measured consolidation was based on the assumption that many bulls who got crushed by May's steep selloff would be eager to exit on any rally above 40,000. Apparently not, and that attests to the strong institutional support that has supplanted the wild speculation that used to drive bitcoin. However, supply between 50,000 and 60,000 is another matter, and it is probably weighty enough that it will require at least 5-7 weeks of ceaseless munching, chewing and mastication for bulls to push above 60,000. Price swings are very likely to be tradeable, since this vehicle, for all its nuttiness, has yet to trigger a losing 'mechanical' trade.

This lesson focuses on some subtle observations we made as the E-Mini S&Ps ascended toward a potentially important target, a Hidden Pivot with gnarly DNA. The rally proved to be a minefield for anyone trying to get short, even those of us with a very precise idea of where a top might occur. During our 70-minutes together, we were able to combine discipline and horse sense in ways that make this one of the very best sessions in the tutorial library.

The pattern shown is sufficiently gnarly and idiosyncratic that it is unlikely to be on the radar of those we trade against. That makes me confident it will work well in the important ways: 1) offering tradeable resistance at p, p2 and D; 2) revealing trend strength clearly enough to embolden us if an opportunity arises , and 3) allowing confident 'mechanical' entries if pullbacks set them up properly.  For now, we'll use p=4446.75 as a minimum upside objective, subject to an always-possible Sunday night surprise.  I am not quite as fearful of Lockdown 2.0  as I was earlier, but it's still hard to handicap the likely extent of it. When last week ended, however, it looked as though the portfolio chimps had decided not to let delta interfere with their livelihood. _______ UPDATE (Aug 11, 8:38 p.m.): We spent much of today's tutorial hour psychoanalyzing the nervous interaction between the rally and bears as it approached the 4446.75 target. For reasons I won't go into, we settled on the 4451.75 target of a lesser pattern as a place to plant an rABC for purposes of getting short. If you thoroughly understand the tactic, use a=4437.00  (8/10, 1:00 p.m. ET) to fashion an entry trigger. _____ UPDATE (Aug 12, 9:04 p.m.): The short trade triggered, but it took nearly five hours and some stressful feints toward the stop-loss to produce a $600 gain. That took discernment and guts on the part of a subscriber who reported cashing a winner, since I'd altered the rABC set-up as the futures made their way higher, eventually exceeding the target by a relatively whopping 4.50 points. That and the relatively shallow pullback imply shorts are in for more abuse as the week ends.  Here's a chart that captures ES hitting pay dirt with a

Strong employment numbers and the higher interest rates this supposedly will bring drove gold sharply lower on Friday, according to the usual experts. What rubbish! Gold dropped simply because it was time for it to drop. It's not as though the market actually divines the future and discounts it in a rational way. If investors possessed even a mote of rationality, gold would be trading above $2000, discounting the biggest monetary blowout in history.  Instead, bullion looks poised to drop even further, since the bounce from an opportune midpoint Hidden Pivot support at 1763.30 was so weak that it's hardly visible on the hourly chart. (That didn't stop us from making money with some very precise bottom-fishing. Check out my 10:48 post in the chat room to see how.)  For now, we'll use p2=1722.40 as a minimum downside target and 1683.50 as worst case for the next 2-3 weeks. This is jumping the gun, since I ordinarily wouldn't project another leg down until the midpoint pivot has been decisively breached. In this case, however, I'll give bears the benefit of the doubt, since they seemed so feisty on Friday. We can use the chart shown in the usual ways, to get long or short as opportunities arise, so stay tuned to the trading Room if you care! _______ UPDATE (Aug 8, 10:53 p.m.):  The 1683.50 target nailed the low of an $85 death dive within three-tenths of one percent.  Virtually any strategy you might have used to get long at the low -- or short ahead of the spectacular, gratuitous swoon -- would have produced a large profit with almost no pain.  Maximum gain on the short position from the time the tout went out would have been a little more than $34,000 on four lots; the so-far bounce could

The pattern shown in the chart is gnarly perfection, meaning not only that September Silver is likely to fall to at least D=24.04, but that it is just as likely to bounce precisely from it. We'll plan on bottom-fishing there even though the trade could conceivably be out of sync with gold, which looks weaker. A 'simulated' rABC set-up can be used for this purpose, with a= 25.565 on the 60-minute chart at 10:00 p.m. on 8/3. I have added this coordinate to the chart, although you may need a magnifying glass to find it without zooming in on your own chart.  Do not attempt the trade unless you understand it, and realize as well that it could trigger Sunday night -- or not trigger at all if silver gaps below 24.04. ______ UPDATE (Aug 9, 9:26 p.m.): There are just two targets left for this blowout: 21.72 and 21,34, respectively.  Here's a chart that shows the provenance of both. Either or both warrant bottom-fishing with a small-degree 'camouflage' set-up. ______ UPDATE (Aug 11, 8:45 p.m.): I'll be more receptive to the idea that bulls actually intend something if they can push this scow above the 24.39 'external' peak recorded last Friday on the way down.

Bulls got stopped out no fewer than eight times last week by a series of lower lows on the hourly chart that ensured they were not aboard when BRTI finally took off. That happened on Thursday, and although we had caught piece of the ride by jumping on this bucking mare a day earlier, we were just spectators went it the explosive part of the move came.  It is bound most immediately for the 44,953 target shown. Supply with thicken significantly with each thousand-point gain, but I won't presume to know how quickly bitcoin fever will eat through it. For starters, let's see how well bulls handle the 44,953 resistance, my minimum upside target for the near term. ______ UPDATE (Aug 8, 10:10 p.m.); My target, which was calculated on Saturday when Berty was trading around 42,000, missed the high of Sunday's lunatic leap by less that a half of a percent. It also caught the top of a nearly $2400 selloff that completed a very nasty bear trap.  I usually update touts on Sunday after 5:00 p.m., but next time I'll try to remember to publish this one at the time it is composed, since bitcoin's nutty swings are so predictable.  As those of you who follow my BTC forecasts in the chat room and here will be aware, over the last couple of years, I have yet not posted a single losing trade among many that were mostly 'mechanical' buys. ______ UPDATE (Aug 9, 9:15 p.m.): I've lowered 'A' one rung to come up with the maxed-out 47665 rally target shown in this chart. You can short there using an rABC set-up, but be prepared to cover for a relatively small profit on a pullback. ______ UPDATE (Aug 12, 9:43 p.m.): At the risk of spoiling a perfect

After head-butting a seemingly impregnable Hidden Pivot resistance at 368.70 for two weeks, the Cubes pushed slightly above it last week, signaling their unwillingness to be contained. The target offered a potential finale to a bullish ABCD pattern launched last Halloween, but in order to come up with a higher one, we'll need to go back an additional six months for the start of an even bigger pattern. It is shown in the inset and projects to 382.75, a number you can use to target call butterfly spreads with perhaps a month of time left on them.  Thereafter, we'll want to get short if and when 382.75 is achieved -- again using well-out-of-the-money (put-option) butterfly spreads. Alternatively, it will always be possible to short the underlying in a way that doesn't depend on its reaching the target. I will provide timely tactics for doing so if there is sufficient interest in the Trading Room. ______ UPDATE (Aug 30, 6:25 p.m.): The Cubes are within millimeters of the longstanding rally target at 382.75. (AAPL is close to its own major target; check out the chat room discussion, which includes detailed guidance for getting short.) To short QQQ speculatively, we'll try to leg into 340/345/350 put butterfly spreads -- first by bidding 0.18 for a dozen Oct 1 350/345 vertical put spreads, 1:1, good through Wednesday. Note: They will become easier to buy at that price as QQQ makes its way toward the target, but you can pay up to 0.20 if it feels close. ______ UPDATE (Sep 1, 7:33 p.m.): The short squeeze to a record-high 382.71 on the opening bar has left me as curious as you are about what will happen next. It'd certainly be nice to nail a major high within 0.03 points. We shall see. _______ UPDATE

Last week ended with a push slightly above the top of a trading range that has contained DIA since May. As far as breakouts go, it is so undramatic as to be unworthy of that description. However, since a finishing stroke to the 364.31 rally target has never been in doubt, we'll infer that DIA is at long last on its way there. Because of the large expanse of time consumed by this lethargic bull trend, the only option strategy that would have worked all along was a covered write.  Meanwhile, any put butterflies we may have bought along the way would have expired worthless, but they served as a cheap way to leverage the unthinkable. We can still butterfly the rally target with calls, but I'd suggest going out no further than six weeks and paying no more than 0.20 per 'fly. If you are unsure of how to do this, there is a recorded lesson on butterfly spreading accessible on your account page. ______ UPDATE (Aug 21): The bull is beginning to look winded. Although that doesn't necessarily mean 364.31 won't be achieved, we should still be alert to the possibility of a lazy rollover that mutates into a bull-killer. If DIA hasn't traded above 352.70 by Thursday afternoon, nor below 350.00, consider buying a few Sep 30 $10 put butterflys centered on the 340 strike for 0.10 or less. A free mini-course on butterfly spreading is accessible via your account dashboard. ______ UPDATE (AUG 23, 11:19 p.m.): Today's lunatic leap made DIA seem like less of a laggard. If it continues, a decisive push above p2=354.45 of this pattern would put D=356.82 in play. That would be a downpayment on the still-viable 364.31 target of the larger pattern noted above.