Rick Ackerman

It's early Tuesday morning, and December Silver looks capable of dragging gold higher after generating a robustly bullish impulsive leg on the hourly chart. I've provided some key price points in today's Silver tout so that you can gauge for yourself whether a breakout is imminent. If certain conditions are met, it would put in play a 25.270 rally target for the December contract -- equivalent to a 4.5% move above current levels.

Silver looks stronger than gold here, having generated an impulsive thrust on the hourly chart during holiday-hours trading on Monday. The move failed to take out the key peak at 24.485 recorded last Thursday, however, and bulls should not breathe easy until such time as that has occurred. A b-c pullback from 2-4 ticks above it could yield a 'camo' buying opportunity, but it could require a deft touch, since the peak is obviously perceived as a breakout point by many traders. Once the futures are airborne you could look for them to hit 25.270 if they get past that number's midpoint sibling, 24.615.

GDXJ pounded the 47.75 midpoint support of the pattern shown (see inset) on Friday, putting a correction target at 45.69 in play. The breach of the support was only by 15 cents, but that's enough to tip our short-term bias negative. Alternatively, this vehicle would need to rally to 49.82 within the next day or two to blast free of trouble.

With summer officially over, stocks have come crawling out of the gate Sunday night, trying their darndest not to invite scrutiny or reflection in these extremely interesting times. DaBoyz need only goose this vehicle 7 points to generate a bullish impulse leg on the hourly chart, but I have my doubts they'll be able to muster even that much of a push, absent any news that could be construed as faintly bullish for stocks. Traders looking to get either long or short using 'camouflage' can fixate on the hourly chart until such time as 1654.75 is exceeded to the upside, or 1642.00 to the downside, since either event would generate a potentially tradable impulse leg on the hourly chart (see inset).  Thereafter, you should look for your entry trigger on the 3-minute chart of less. _______ UPDATE (6:23 p.m. EDT): Yesterday's price action was such unmitigated slop that I'm not going to try to entice your further interest with a fresh tout, at least not today.  However, I've refreshed the chart nonetheless, since it offers a pretty good picture of what garbage looks like when it takes the form of price bars on a trader's graph. Notice that bears were unable to put this oft-nettlesome vehicle away -- a modest feat, since the D correction target lay not far below -- after bludgeoning the midpoint support for fully two hours. Price action since has been faintly bullish, but not sufficiently so to warrant our waiting patiently Wednesday for a buying opportunity on the lesser charts. _______ UPDATE (September 4, 9:52 a.m. EDT):  Bears were too enfeebled today to reach even the midpoint support of (60-minute) A= 1650.00 (9/3 at 10:00 a.m.), B= 1630.75 at 3:00 p.m.).  The result is the current rally -- destined to go nowhere, presumably, but nevertheless

The yellow flag is out, since the drubbing December Gold received on Sunday pushed it well beneath a clear target at 1390.10 that had served as our minimum downside objective. This portends more weakness, presumably at least to the 1382.80 midpoint support shown in the chart. Any lower, however, and we should brace for more selling to at least 1367.20, or perhaps 1355.60 if the first number is smashed. All of these numbers are Hidden Pivot supports, and each can be leveraged for the purpose of 'camo' bottom-fishing. I'd suggest using charts of 5-minute degree or less, keeping entry risk limited to no more than five ticks theoretical.  My gut feeling is that this selloff is gratuitous -- a mechanical reaction to the important rally target at 1328.80 where we'd expected tradable resistance. The correction would begin to look more serious on a print today or tomorrow below 1351.60, since that would generate a robustly bearish impulse leg on the daily and larger intraday charts

Any trading anecdotes or tips you’d like to share?  That’s the Question of the Week, the goal being to stimulate a discussion that can help us all grow as traders. Speaking for myself, it has been a long and bumpy road. During the 1980s, I enjoyed all-too-easy success as a market maker on the Pacific Options Exchange. I’d left a newspaper job in 1978 and was soon earning 20 times my editor’s salary working in the option pits. At the time, the competition was relatively light, options premiums were fat and juicy, and retail customers – always easy pickings – were still in the game.  Anyone could have been a winner back then – it was like prospecting for gold in California in 1849. Not surprisingly, my colleagues came from all walks of life – bartenders, ski bums, film producers, cops, rocket scientists, pet groomers, marathon swimmers -- you name it. Anyone Could Do It… That was the main appeal of floor trading: anyone could do it, at least in theory. Trouble was, the game was always mutating, and over time it came to increasingly favor rocket scientists over seat-of-the-pants traders like myself.  I left the floor in 1989 with my earnings in a steep decline and spent the next seven years wandering in the woods, working mainly as a headhunter (I was ill-suited for this kind of work, since I took unreturned phone calls personally); as a reporter for a company that used a Madison Avenue model for ferreting out promising stocks;  and as an investigator for Hal Lipset, the late San Francisco private eye. I never lost my Jones for trading, though, and I returned to it on the encouragement of a friend who had happened on a powerful trading system. That system led me to develop one

The chart (see inset) is equivalent to the one accompanying today's gold tout, which saw no threat in yesterday's mild selloff, only petty annoyance. Like December Gold, September Silver spent Thursday playing games with a minor midpoint support that is as yet unbroken. As is the case with gold, however, a decisive breach of the 23.748 pivot would portend a likely drop to as low as 23.080 over the near term.

December Gold spent the day playing toe-sies with the midpoint Hidden Pivot support of the corrective pattern shown (see inset), teasing and annoying so far rather than threatening. The move is bearishly impulsive nonetheless, and so we should pay attention if sellers push the futures more than $1-$2 below the red line (p=1403.30) today, or close this vehicle below it, since that would augur more downside to as low as 1390.10 over the near term.

Traders shouldn't expect too much in the way of opportunity on Friday, since the market looked to have gone into holiday lock-down mode midway through Thursday's session. Even so, I've sketched out a possibility for E-Mini S&P traders that is based on the modest rally I expect to unfold.