Crude oil's exuberant spree over the last three weeks recalls Bruce Willis' memorable line from Die Hard: "Yippy-ki-yay, motherfucker!" Weren't 'They' supposed to keep energy prices subdued until the November election? If 'They' means Joe Biden's keepers, one wonders whether the sinister Obummer has that kind of pull any longer with OPEC. Whatever the case, July Crude looks all but certain to hit the 87.31 target shown in the chart -- a 20% gain over prices that obtained at the beginning of June. Too bad for all of us, since pump prices looked ready to dip below $3 before greedy Big Oil recovered its grip. So here is the world's largest commodity market, allocating the world's most important resource, trading like a Vancouver penny stock. The good/bad news is that the wild swings will continue until the energy markets lie broken and smoldering in the Second Great Depression.
Silver's correction since topping at 32.75 on May 20 has created a distinctive channel that grows more ponderous and tedious by the day (see inset). If the July contract falls yet again to the lower line and this happens within the next 4-6 days, that would imply a low near 27.50. However, here's a weekly chart that puts that in a long-term context that is clearly bullish. It shows a stall to have occurred in a logical place, a secondary pivot at 32.41. But even a nasty pullback now to as low as x=23.32 would still be technically constructive and generate a juicy 'mechanical' buying opportunity. I strongly doubt silver bulls will need such a rebuke after a nearly two-year consolidation begun two summers ago, however, and that implies the July contract can be bought 'mechanically' at p=27.873 with a stop-loss at 24.84. This is a theoretical 'do', but I'd suggest seeking guidance in the chat room if the opportunity takes shape.
The chart shows how July Silver replicated gold's reverse-pattern low last week. Although the actual bottom slightly exceeded the d=28.815 target, the subsequent bounce on Friday was strong enough to take the futures out of the danger zone. The move would become even more persuasive if the bounce can surpass 29.803, or better yet close above it. That is the midpoint resistance of a reverse pattern that began with a 29.525 low on June 5. The corresponding 'd' target of the pattern is 30.875, and we should expect it to be reached, at least, if p=29.803 is decisively penetrated.
The wild, gratuitous price swings in the world's biggest commodity market could make energy consumers nostalgic for the 1950s, when U.S. policymakers, CIA hacks and political operatives firmly controlled Saudi Arabia, Kuwait, Iran and other key producers. I've kept oil on the touts list nonetheless, but only as a placeholder, since technical analysis no longer gives me a confident basis for forecasting the next big move. I don't mean to suggest that crude is untradable. Far from it, actually, since the intraday swings are so fraught with duplicity, greed and fear as to have become routinely predictable. Nudge me in the chat room if you have a trading idea you'd like vetted. But don't ask me where I think oil will be trading in a month or two, or at year's end, since there is really no way of knowing. My best guess for the very near-term is that the July contract is bound for 80.21, predicated on the June 11 low at 77.22 not being violated first.
The reverse pattern shown is sufficiently authoritative to imply that July Silver is unlikely to dip significantly below the 28.815 Hidden Pivot target, at least not over the near-term. It took a brutal gang-bang by sellers to bring the futures down to the pattern's point 'C' low at 28.815, but the sleazeballs who manipulate silver's price were probably piqued by the increasingly shrill noise from bulls who felt that the metal's handlers were losing control. Bottom-fishing will enjoy favorable odds this week, so stay tuned to the chat room and turn on your email notifications if you want to stay apprised.
July Crude's easy push past p=74.72 implies that this corrective bounce will reach the 'D' target at 76.95. It should quell the rally, which will remain inconsequential until such times as May 29's 80.62 peak is surpassed. True to crude's perverse nature, news that OPEC will lift production quotas appears to have catalyzed the rally. Pump prices were coming down slowly following the April 12 top at 86.16,, but it will take a new top, even if just a minor one, to set them falling anew.
Silver's continuous weekly chart is more encouraging as to whether an ambitious longtime rally target will be reached. The target, a Hidden Pivot, is 36.03, about 18% above, and the strong move in April past p=26.67 on first contact attests to the strong likelihood that more upside to D is coming. The ascent looks too steep, however, to continue without a punitive correction. Regardless of whether the expected pullback comes down to 'mechanical' buying territory near p=26.67, we'll stay focused on the lesser charts to be ready for the turn.
July Crude ended the week just above a low at the D=76.66 correction target shown in the chart. The pattern that produced the target is sufficiently delicate and precise to suggest that even a slight breach of D would be telegraphing further weakness. This would be a break for motorists and also help mitigate inflation, albeit probably not enough to quell some other powerful inflation inputs, including a dramatic rise in shipping costs. Slippage beneath D would likely send the July contract into the range 74-75 for yet more distribution.
Silver's chart offers more clarity and precise predictability than gold's. It could not be clearer that the July contract will fall to at least d=28.815 before it finds traction. That Hidden Pivot can be bottom-fished aggressively when it is reached, but the futures should be traded with a bearish bias in the meantime. That implies that a rally to the green line (x=31.76) should be treated as a great opportunity to get short, but also that a drop to p2=29.799 be bottom-fished as avidly as d. ______ UPDATE (May 28, 2:26 p.m. EDT): So much for clarity! If anything is clear, it is that Silver's moon shot today is so powerful that it could only be a rebuke to the scumbags who have suppressed its price for so long. They have papered the market to avoid having to supply quantities of physical that are even remotely commensurate with demand. It is a small market relative to gold -- about one-tenth the latter's size -- but days like today cannot but fill gold bugs' heads with visions of a runway bull market. The conspiracy against gold's rise is a more powerful alliance, but their task will have grown more difficult if silver has broken from its moorings. For what it's worth, July Silver triggered a 'mechanical 'short at x=31.76. But I am NOT recommending the trade for reasons that this update should have made clear. The signal looks quite promising, and so I'll be interested myself to see whether the rally subsides somewhat shy of stopping out the bearish reverse-pattern's 'c' high at 32.75.
Silver's breakout last week above the watershed high at 30.94 recorded in August 2020 is the subject of my latest commentary. The move has opened a path to the pattern's 'D' target at 36.96, a Hidden Pivot resistance that looks capable of stopping the bull in its tracks, albeit not necessarily for good. For now, though, we should treat the secondary Hidden Pivot (p2) at 32.42 with the same deference we give midpoint resistances (p) and supports. It can serve as a minimum objective for the moment, but also as a place to hedge or adjust long positions, or even to get short for a while. If buyers impale p2 on first contact, that would likely clinch a move to 36.96.
