Silver will need more rest after topping pennies from an important Hidden Pivot target at 26.20 target that I'd drum-rolled for the May contract. The corrective target at 24.80 shown may prove to be optimistic, but there's no harm in using it analytically, since its ability to contain sellers can tell us how much power is behind the downtrend. It has worked already for initiating a 'mechanical' short at the green line, and it can also be used to bottom-fish. Caution is advised, however, since the 'B' low of the pattern 'sausaged out' when it narrowly failed to impulse beneath the April 6 low at 24.91. ______ UPDATE (Apr 23, 6:00 p.m.): The 24.80 target worked nicely, getting within 7 cents of the low of a so-far 61-cent bounce. It seems likely to continue because the bounce overshot the 'd' target of a minor reverse pattern.
May Silver on Friday precisely fulfilled a Hidden Pivot target at 26.20 that was six months in coming. The actual high was 26.23, but don't expect much more than that for the time being, since buyers could use a rest. Two or three weeks could enable them to recover, but in the meantime we'll trade this contract with a bearish bias. We should also pay close attention to corrective ABC patterns, since an overshoot of their d targets would signal more downside while sharpening our assessment of trend strength.
Buyers easily handled 'hidden' resistance last week at p2=24.57, implying the futures remain on track for a run-up to at least 26.20. [Changed to correct a rickism that gave the target initially as 26.01.] This target is slightly lower than the one previously given, since it's derived from a one-off 'A' different from the original. That was a 'Pontiac/Oldsmobile' middle-of-the-roader that I've usually advised shunning, since it often misses final highs and lows. The rally has been too steep to enable 'mechanical' entries, but a drop to the red line would signal one nonetheless, stop 21.85. _______ UPDATE (Apr 13, 6:09 p.m.): Buyers pushed the May futures to within 0.3% of the 26.20 target, effectively fulfilling it. A pullback is likely but not certain. The next important resistance is an external peak at 27.22 from March 8, 2022, and its breach would refresh the bullish energy of the long-term charts.
We've been using a Hidden Pivot at 23.89 as a rally target, but buyers handled the 23.21 midpoint resistance of a larger pattern with such brio on Friday that I've switched to that pattern, with a 26.47 target that significantly raises the ceiling for the near-to-intermediate-term. Odds of a run-up to that number would shorten if the futures close above 23.34 for a second consecutive day. The pattern should work well for 'mechanical' buying on the way up if you want to augment a long position. However, because theoretical entry risk would be a little more than $8,000 per contract , the trade should not be attempted without a 'camouflage' trigger capable of reducing that by at least 90%.
I've brought point 'A' down to a 'marquee' low in order to give the rally a little more room. Silver's week-long hesitation to push past p=21.92 made it less than a lock-up to reach D=23.89, but Friday's blast free of gravity was sufficiently compelling to imply the target will be reached. As always, an overshoot of so clear a Hidden Pivot would imply more uptrend. Next would come a test of massive supply in the 23.50-25.00 range deposited back in December/January. _______ UPDATE (Mar 24, 8:55 a.m.): With a so-far high today of 23.71, the futures are closing on the 23.89 target that would max out the bullish reverse pattern shown in the thumbnail chart. They were short-able this morning as scalp at 23.69, however -- the 'D' target associated with the one-off low at 21.19 on 11/8. IF SI closes above the higher target, it would activate D=26.48, associated with A=18.40 on 10/14.
It may be premature to switch to a bullish chart in Silver, especially considering that price action n gold has been so wishy-washy. However, the May contract triggered a theoretical 'buy' signal on Friday when it vaulted to the green line (see inset) and then exceeded it by 1.5 cents. We can therefore project more upside to p=21.79, but we should be prepared nonetheless for a relapse below 'C' that would negate the bullish target. If the futures achieve p=21.79, straightaway, a relapse to x=20.86 would set up a very enticing 'mechanical' buy that we could initiate using a 'camouflage' trigger. Stay tuned to the chat room if you care. ______ UPDATE (Mar 13, 10:35 p.m. EDT): The slight overshoot of p (adjusted to 21.82) is bullish and shortens the odds of a continuation to D=23.69 (also adjusted). A swoon to x=20.88 would trip an appealing 'mechanical' buy, stop 19.94.
Silver's modest rally last week failed to trip a theoretical buy signal when it narrowly missed the green line (see inset). The impulse leg that cued up the pattern is legitimate and even compelling, however, and that's why the resulting Hidden Pivot levels are likely to be useful for trading and analytical purposes once the futures have popped above x. The bull cycle is theoretically capped at D=24.45, but that doesn't negate the possibility that bulls will shred the target and make a run for structural resistance around $27. ______ UPDATE (Mar 7, 5:19 p.m.): Do shakeouts really have to be as brutal as today's kamikaze dive? It put in play a hitherto unthinkable downside target at 18.51 that can serve as a worst-case objective for the next 6-8 days. The way sellers pulped the red line (p=20.32) implies that the target, as painful as it sounds, is hardly a longshot bet. More immediately, the selloff should have little trouble reaching p2=19.42, a secondary Hidden Pivot that can serve as a minimum downside objective but also as a place to attempt cautious bottom-fishing.
The pattern shown produced a textbook 'mechanical' short last week from x=22.14 and could deliver an equally opportune 'buy' if the May contract falls to the 20.15 target shown. It is commensurate with a 1774 target we've been using for April Gold. The implied selloff to D is not quite a done deal, however, since the futures have taken a so-far small bounce from p2=20.81, a logical place for a turn. I expect the downtrend to reach D, but we must still respect p2's ability to reverse the tide.
I've raised the point 'A' high to project a 20.105 downside target that is more bearish than any aired here recently. The pattern and its target are somewhat corroborated by the initial bounce precisely from p=21.37, but also by the subsequent dance around that number for two more days. We should know early in the week whether bears are likely to remain dominant over the near-term, since a bounce touching x=22.003 would trigger a textbook 'mechanical' short. I'll suggest paper-trading this one nonetheless, unless you know how to cut the nearly $13k of entry risk down to size. Nudge me in the chat room if I'm around, since I may be able to help. _______ UPDATE (Feb 22, 12:28 pa.m.): The short effectively triggered with today's rally to 21.995. This implies that the futures are likely to fall to at least p=21.37. _______ UPDATE (Feb 22, 9:50 p.m.): So the futures fell to 21.43, and I really don't know whether that's 'close enough'. Wake me when something happens.
It is concerning that, before it fell apart, March Silver did not quite reach our longstanding target at 24.95, nor one at 25.06 that would have completed the somewhat larger pattern shown (inset). Even so, the futures would be an enticing 'mechanical' buy nonetheless at x=21.85, stop 20.89, for a one-level ride, at least. The implied entry risk on four contracts would be a little more than $21,000, so this trade should be attempted only with a 'camo' trigger capable of bringing that down to perhaps $1,200 or less. _____ UPDATE (Feb 10); The futures bottomed on Friday two pennies below 21.85, the number flagged above. Although they subsequently rallied 37 cents, there was no indication that anyone did the trade, let alone took the partial profit that was possible before the trend reversed. No further recommendations for now.
