Rick’s Picks

This symbol has tracked my forecast for the last couple of weeks, but what now? Up or down in the week ahead looks like a coin-toss at the moment, but if rates break lower, expect them to fall to at least 4.278% (p2, the secondary Hidden Pivot), and to take a tradable bounce from that number. Best case (for borrowers, that  is) would be for further slippage to d=4.161%, which presumably would be signaled by a decisive breach of p2=4.278%. Alternatively, if rates move higher, signaled by a two-day close above 4.439%, look for a move to 4.559%.

I've masked the proprietary origins of the 3326.40 target shown, but suffice it to say it is the 'd' Hidden Pivot target of a big 'reverse' pattern. However you slice it, it looks like a promising spot to try bottom-fishing with a stop-loss as tight as 1.50-2.00 points. It can also be used as a minimum downside objective, since the 'd' target of a smaller reverse pattern was exceeded on Friday. The overshoot was just a point or two, but that is enough for us to infer that more weakness is coming.  We used a similarly derived target last week to get aboard a $33 upthrust within $2 of the low.  Gold has been equally nasty toward bulls and bears alike over the last two weeks, but if it breaks the 3326.40 support easily, it is bulls who are likely to get flayed -- all the way down to as low as 3251.40, or even 3176.40. I'm not saying much about the bullish case because gold has been such a little sonofabitch lately, but if it surprises by heading higher Sunday evening, look for a run-up to at least 3437.80, the midpoint Hidden Pivot resistance of a conventional pattern on the hourly chart (A= 3313.10 on 6/8). A close above that number would indicate still more upside to at least 3519.40. My longer-term projection is quite bullish and calls for a rally to 3695.30. _______ UPDATE Jun 24, 10:12 a.m. EDT): The futures have breached a would-be concrete midpoint support at 3326.40, and that means they are likely to fall to at least 3251.40; or, if that Hidden Pivot support fails, to a worst-case 3176.40. Either number can be bottom-fished aggressively, provided you have the chops to limit entry risk to no more than $250 per contract.  Here's the chart.

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.