July Silver aborted a textbook 'mechanical' buy at 36.349 last week, a sign that there is something wrong below the surface despite the 12% rally in June from 33 to 37. Perhaps bulls just need a breather? SI is notorious for reversing after stopping out previous highs and lows. This is what it did on Friday, bouncing 50 cents after dipping a couple of ticks beneath the 35.580 low recorded on June 12. However, I doubt the reversal will get legs, since the move following the breach of a too-obvious support. We'll give it the benefit of the doubt nonetheless while stipulating that the uptrend must surpass three small peaks, the highest of them at 37.045, to regain our respect.
The rally has sputtered out in a bad place, more than a little shy of the 74.87 target I'd flagged. I still expect that Hidden Pivot to be achieved, but we will need to be careful about where we re-board or augment long-term positions. For now, I'll suggest bidding 66.14 with a stop-loss at 63.23. This is a textbook 'mechanical' buy, but it is somewhat riskier than attempting it at the green line (where a 57.40 stop-loss would apply). If it comes down to that, we should initiate with a 'camouflage' trigger. This means using a pattern of small degree to signal a 'buy' at its point x, 25% along the C-D leg.
The 96.36 downside target we've been using remains viable. The current, countertrend move would need to surpass the 'external' peak at 100.54 recorded on May 29 to imply the long-term downtrend may be about to change. Even then, that would generate a 'mechanical' sell signal that we would likely ignore. More immediately, anything above 99.39 early in the week would be a faintly bullish sign.
The futures ended last week's sprightly death dance poised to move higher as soon as Wall Street gives the all-clear for nervous Nellies worried about the war between Israel and Iran. Although the September contract hasn't signaled a certain move to the 6358.00 rally target, it has shown enough buoyancy to make a pullback to the green line (x=5948.00) an enticing buy with a 5811.00 stop-loss. Use a 'camo' trigger to cut that down to size so that theoretical entry risk is no more than $175 per contract.
Headline news from the Middle East loosened DaBoyz' deadly grip on shorts as the week ended, but it did not disturb my expectation of a potentially juicy short at exactly 486.17. That Hidden Pivot target was first signaled five weeks ago, and it has kept us from turning too bearish on the stock market despite an apparent dearth of buying interest in the broad averages. I cannot say exactly when MSFT will hit the target, but when it gets within a few pennies of it we should be ready to jump on some options, either naked shorting soon-to-expire calls or buying some cheapie, expiring puts. Stay tuned to the chat room for timely guidance. Also keep in mind that a major top in this stock will end the bull market begun in 2009, and that this could be it.
Bulls finally broke through a crucial midpoint Hidden Pivot resistance at 3423.20 after weeks of pumping and priming, clearing the way for more upside to at least p2=3559.20, the pattern's secondary pivot. As always, its decisive breach would portend a likely finishing stroke to D=3695.30. We are unlikely to see a swoon back to the green line (x=3281.10), but if this should occur, plan on bottom-fishing there 'mechanically' with a 3151.00 stop-loss. More immediately, if the future haven't exceeded 3467.00, you can try bottom-fishing around 3356.80. That number could be expected to work exactly but for the fact that it coincides with a previous low at 3358.50 recorded on June 12 that is going to attract too many eyeballs. _______ UPDATE (Jun 16, 2:59 p.m. EDT): With Wall Street celebrating “risk-off” like there will be a million bright tomorrows, bullion is getting hit especially hard. Just remember, the selling is being orchestrated by agents who are eager to buy the stuff. I expect the fake carnage to continue down to 3361.70 [modified] before the futures turn around. August Gold is currently trading around 3407.90. _______ UPDATE (Jun 19, 9:12 a.m. EDT): My revised correction target for August Gold (see above) came within $2.10 of nailing the v-shaped low of a so-far $33 rally. It's too early to tell whether this will mark an important bottom, but if you got aboard near the low, you should be out of a third to half of the position with a partial profit of as much as $3,000 per contract. Assuming the bounce continues, the closest target is 3419.00. Here's a graph that shows it all. _______ UPDATE (Jun 20, 1:22 a.m. EDT): The futures have relapsed after rallying sharply from within an inch of my 3361.70 correction target (see above). I recommend playing for
We can breathe easier when July Silver touches the pink line (p2=37.291) since that would make any one-level pullback a correction that we could buy 'mechanically'. It would also shorten the odds of further progress toward a 40.439 target that I've assured you will be achieved. In the meantime, the futures are in limbo, looking for a favorable gust to help things along. If July Gold achieves a comparable target at 3695 at the same time, the gold:silver ratio would stand at around 91, down significantly from recent highs above 100.
Although Bitcoin is considered one of the most volatile and challenging vehicles to trade, it is actually the unwitting bitch of Hidden Pivots, tracing out swings as predictable as rush-hour pileups on the San Diego Freeway. I have demonstrated this repeatedly with trend and target calls that have been correct at least 85% of the time. (If you have observed otherwise, by all means leave a comment.) Last week, I recommended shorting aggressively into a nasty short squeeze that pushed Bitcoin more than $10,000 higher in three days. The countertrend trade produced a gain of $3596 a couple of days later for anyone who followed my simple instruction. Will Bitcoin now come down to 97,616 as further predicted? We'll see. If it does, plan on bottom-fishing there with a stop-loss as tight as 0.2%, or $225. Good luck!
I've identified bearish targets well below these levels at, respectively, 81.64 and 77.49, but I'm giving every countertrend blip the benefit of the doubt so that I am not caught unawares if an important turn comes. This blip was Thursday's gap-up rally above two prior peaks on the daily chart, one of them 'external'. That generated a bullish impulse leg, implying Friday's mild sell-off was merely corrective. (The weakness also failed to reach a downside 'd' target, which adds to the short-term-bullish picture.) Let's see what the new week brings. If TLT can push above the 88.21 'external' peak recorded on May 7, that would be worthy of serious attention. ______ UPDATE (Jun 20): A tedious, disappointing week, although by no means cause for despair. TLT still needs to fist-pump above the 88.21 peak from May 7 to command our respect.
Last night's explosive move through the 70.82 midpoint Hidden Pivot of the pattern shown has removed any doubt its 86.51 target will be reached. It seems improbable that there should be a lid on an energy market that is now on wartime footing, but that's what the chart implies. However, if the move even slightly exceeds the target, and thence early April's slightly higher 'external' peak at 87.63, a lurch toward the magnetic $100 mark would probably become inevitable. In any event, your trading bias should be aggressively bullish until such time as 86.51 is reached.
