Current Touts

Silver stalled Friday precisely at the 29.00 midpoint of the bullish pattern shown. My gut feeling is that it will finish the week above this Hidden Pivot resistance, presumably bound for at least p2=30.37, and thence D=31.75.  These are relatively modest targets in comparison to longer-term charts that show upside potential to 36.03 and higher, but we'll take them one at a time, the better to keep risk under tight control as we augment and hedge positions on the way up.  If you're keen on trading this vehicle, please be vocal about it in the chat room.

Rather than speculate on whether this vehicle will push above mid-April's 44.70 peak, I've drawn a chart that you can use to trade it knowledgeably. Friday's weakness triggered a theoretical sell signal with downside potential to as low as d=41.47. However, the pattern can be used to bottom-fish at any of the three levels yet to be achieved: p=42.92, p2=42.24 and d. In each case, you should get long with a reverse-pattern trigger that comes from the lesser intraday charts. There's a possibility the downtrend will turn from p=42.92 and go on to surpass the 44.26 high. That's why some call options acquired at p should be held for a possible swing for the fence.

Bertie has seemed too feisty lately to be prepping for a capitulation down to the 54,131 target shown. However, the pattern has been working perfectly in all respects, and the effortless downside penetration of p=60,692 on first contact strongly implies that 54,131 will eventually be achieved. The pattern also telegraphed a 'mechanical' short from x=63,973 that delivered a straightforward, anxiety-free gain of about $3,300 in just four trading days. All things considered, we'll use p2=57,411 as a minimum downside objective for the time being.

ES will become a juicy 'mechanical' shorting opportunity when it hits the green line (x=5194.50), probably on Monday or Tuesday. Entry risk is $7000 per contract, so the trade is suggested only to subscribers who know how to set up a risk-averse, 'camouflage' trigger. I posted an equally appealing trade on Friday, based on a pattern that was gnarly perfection. Unfortunately, I neglected to consider that AAPL's earnings were due out after the close. Ordinarily, I would say the pattern should have 'known' that the company was going to announce a $110 billion buyback that would send the S&Ps, if not the stock itself, into a rabid, short-squeeze.  AAPL's reaction so far has been a relatively modest 7% gain, although it's possible DaBoyz will milk the news to produce yet more unearned 'wealth' when stocks start to trade Sunday night.  So how did AAPL trash a bet-the-farm trading pattern? I don't know, but the short from the green line that triggered on Friday was performing well until the news hit moments after the bell. If the stock had moved lower, I'd have bet the ranch bottom-fishing the 'D' target as well. The lesson here is that we should be very careful about taking positions ahead of the close, especially if one of the biggest-cap companies in the world is about to report earnings. You should take a close look at the pattern posted in the chat room nonetheless, since it is as fine a specimen of 'gnarly' as I could imagine -- one that should work for you most of the time.

The bullish reverse pattern shown implies that the rally that ended the week is bound for a minimum 421.63 -- still somewhat shy of a major Hidden Pivot resistance at 430.58 that has capped AAPL's bull market since mid-March. We'll wait to see how buyers handle the resistance before we infer that new record highs are coming. If so, let's be alert to the possibility that a marginal feint into record territory would fake out enough bulls and bears to set up a hellacious dive similar to one in IBM that I featured here a while back.

June Gold ended the week in a dither about what comes next. Three marginal penetrations last week of the p midpoint support implied that sellers lack the conviction to push the futures down to D=2235.70.  We'll be better able to judge their mood and capabilities after we've seen how the markets open Sunday evening. In any event, it would take a decisive push above C=2364.40 to suggest bulls have the wattage to take out mid-April's record peak at 2448.80.

Last week's tedium left July Silver with somewhat further to fall before sellers are likely to exhaust themselves. Specifically, the futures will need to come down to at least 25.90 for that to happen.  This appears likely due to the way the downtrend crushed the midpoint Hidden Pivot support at 28.045 the first time sellers encountered it following mid-April's 30.19 peak.  There are no easy hooks for determining a trigger interval to bottom-fish, so we may have to calculate it in real time if and when the target is hit. Stay tuned to the chat room and your email Notifications if you care..

You can use the 'locked' reverse pattern shown to evaluate the trend and find tradeable opportunities.  It has triggered two winning 'mechanical' shorts already, but I doubt that a third blip up to the green line would deliver. That implies GDXJ will surpass C=44.70 if it exceeds the green line; or alternatively, fall to at least p2=38.00 if it takes out the red line first. Even If sellers win this round, it will still be possible to bottom-fish at either p2 of D=35.77, so stay tuned.

For a vehicle that appeared bound for $100, June Crude came in for quite a drubbing last week. The decisive down-move through p=79.94 on first contact implies the selling will likely hit 72.91 before bulls can turn things around. That would diminish the odds of an eventual move to par, especially if D is easily breached. Alternatively, the most bullish event I could foresee would be a sharp turn from p2=76.43.  If that happens and the futures go on to exceed the April 26 peak at 84.46, that would all but clinch a follow-through to $100.