Silver

The pattern shown offers no good handholds for trading, but it is descriptive nonetheless of a stagnant, frustrating bull market that seems in no hurry to get back in gear.  The so-far eighteen-month correction has produced several lower lows that would have stopped out bulls with no taste for tedium, and left even hard-core bulls wondering whether there mightn't be a better place for their capital. From a technical standpoint, a rally would need to clear the August 4 peak at 26.19 to signal a likely end to the correction. We can accumulate silver nonetheless by averaging down, but I will limit my guidance for now to responding to your ideas and queries in the chat room.

The pattern shown is a civilizational embarrassment, proof that the markets, far from being prescient or even rational, are just a cosmic circle jerk with no real purpose. I won't dignify or otherwise comment on this chart, since it would be akin to predicting a cockroach's next feint as it scuddles across a kitchen floor in search of darkness. Nudge me if something interesting happens. The next move is likely to be up, since bears and those who manipulate silver prices for a living don't have the guts to take out any important lows.

Silver demolished an important Hidden Pivot resistance at 24.01 with such force on Friday that we shouldn't hesitate to consider far more ambitious targets. The one shown at 40.12 is not even the most optimistic on the horizon; that lies at 53.06, the target of a pattern begun from 8.77 more than 13 years ago. We'll be better able to judge the power behind the move when we've seen how it interacts with the smaller ABCD's 30.76 midpoint pivot. Another lies at 32.35, and it is likely to be even more challenging, since it is the midpoint pivot of the much larger pattern. The lower midpoint is not in play yet, since it will require a rally to the green line (x=26.09) to lock in the recent low at 21.41 as the pattern's point 'C'; however, the big pattern has already done so.  In any event, and as you can see, both patterns have very steep impulse legs pushing the rally. That is coiled power, and if it is unfelt now, it eventually will be.  It also portends bullish 'mechanical' set-ups throughout the bull market that are extremely likely to work. Stay tuned! ______ UPDATE (Jan 24, 8:40 p.m.): My extravagant rally targets (see above) tapped a gusher of bullish sentiment in the chat room today.  That's all well and good, but please keep in mind that the March contract will need to get past November's 24.58 peak and then some before we break out the bubbly. Last week's exuberant, Hidden-Pivot-demolishing spike was a welcome and encouraging step in that direction, but no more. ______ UPDATE (Jan 26, 9:27 p.m.): The futures will fall to at least D=23.01 if the secondary support a 23.27 fails. Bottom-fish there only if you know what you're doing. _______ UPDATE (Jan 27, 8:57 p.m.): Today's downdraft

The bull trade explicitly detailed here as last week began could have produced a profit of as much as $9100 with relatively little stress.  And here's more good news:  The tradeable pattern has continued to evolve into one that can probably be used successfully again. For starters, a pullback to the green line (x=22.46) would trigger a very appealing mechanical buy. This gambit will work best for those of you who are familiar with camouflage set-ups, since the straight-up risk from a conventional entry would be around  $10,000 on four contracts.  A short initiated at D=24.01 looks enticing as well, although the obviousness of the pattern could make it a tricky play. The target is a strong bet to be reached, given the way buyers impaled p=22.98 on the first time they came in contract with this 'hidden' resistance. ______ UPDATE (Jan 29, 10:50 p.m.): Buyers speared the 24.01 pivot we were using as a minimum upside target, foreshadowing a test of  November's imposing peak at 25.40. A vast void separates the two levels on the chart, creating a a formidable discomfort zone for us to play with. Stay tuned to the chat room if you're interested.

A 'mechanical' buy that had been two weeks in coming triggered on Friday after bouncing off the green line at 22.02 no fewer than three times. Numerous subscribers swore on a stack of Holy Bibles that they have been paying attention to my Silver touts, so I will establish a tracking position and see how it goes. I'll use a 22.10 cost basis, since Thursday's initial bounce from the green line would have been stopped out following a partial, profitable exit. The not-so-sloppy-seconds pattern we are left to trade is shown here, and it implies two contracts would have been exited at p=22.27. Cash out a third at d=22.59 and use a 22.03 stop-loss for the 25% that remains unless instructed otherwise. _______ UPDATE (Jan 10, 7:03 p.m.): The futures are closing on 22.59 this evening. Exit another 25% as suggested, but switch to an impulsive stop-loss on the 30-minute chart for the 25% that remains. This implies stopping out the trade if a presumably corrective down-leg exceeds two prior lows without correcting, At present, the stop would be at  22.36. ______ UPDATE (Jan 11, 8:41 p.m.): If you Bible-thumping supposed silver lovers followed my instructions, you are still long a single contract (or 25% of the original position), with a realized gain of $4150 and another $3400 of unrealized.  Use a 22.48 stop-loss for what remains, o-c-o with a closing offer at 23.20. An exit there would yield a total profit of around $9100. _______ UPDATE (Jan 12, 1:24 p.m.): Today's strong upthrust has hit 23.22, so we are officially out of the position with a theoretical profit of $9100.  The rally impaled the midpoint pivot of a larger pattern with such force that we can now use D=24.01 shown in this chart as a minimum upside objective.

Silver looks like a slightly better bet than gold to achieve the 'D' rally target of the modest 'reverse' pattern shown. It has signaled one 'mechanical' winner on the way to 23.85, but we are more interested at this point in how strongly the Hidden Pivot resists the uptrend.  It has been tortuous and does not look powerful enough to blow through the resistance. Still, there is no reason to think this is impossible or even unlikely, so let's simply monitor the move closely and exploit it as we always do whenever the odds tilt in our favor. _______ UPDATE (Jan 3, 10:14 p.m. EST): Like February Gold, March Silver would trigger a 'mechanical' buy if it falls to the green line. The 21.40 stop-loss would make the trade equally risky, with $3,000 theoretical at stake on entry. This one, too, is therefore for experts who can pare that down to perhaps $300 per contract. Interested?  Nudge me if I'm in the chat room at post time. _______ UPDATE (Jan 6, 8:12 p.m.): Time to remove Silver from the front page?  I will do so shortly unless there's a popular uprising to save it.

The 22.01 downside target I flagged at the beginning of the week worked beautifully, enabling bottom-fishing less than two cents off the intraday (and weeky) low. It occurred on Friday at  22.03 and gave way to a strong bounce that could have produced a quick profit of as much as $10,000 on four contracts. No one reported doing the trade, however, so I provided no further guidance.  The extent of the bounce is unpredictable at this time, but because it has come from a Hidden Pivot target that took more than three months to reach, we might expect it to continue untroubled for at least another 4-7 days if not significantly longer.

I've used a reverse pattern to project lower prices because it is more conservative than conventional patterns that would have yielded even lower targets. That means you can attempt bottom-fishing at D=21.95, my worst-case objective for the near term; or short x=24.60 'mechanically' if you know how to set it up without risking your shirt.  An easy breach of D would imply more slippage top at least 21.95 or even 20.77. They are, respectively, the p2 and D pivots of the 'conventional pattern using A= 26.13 from 8/4. Here's the same picture transposed to March Silver. It shows 'D' at 22.01.

The rally begun on September 29 from 21.41 is bound for a minimum 26.48, a Hidden Pivot resistance that is shown in the inset. I've used a 'reverse' pattern to calculate the target, and it is comely enough to be considered reliable for all purposes, including nailing a short-able top and keeping us confidently bullish in the meantime. Most immediately, we could use a pullback to p=23.94 to get long 'mechanically', stop 23.09. If this opportunity should arise and you are interested, nudge me in the chat room and I may be able to provide a set-up that would drastically reduce the implied entry risk of around $4000 per contract. _____ UPDATE (Nov 23, 6:04 p.m. ET): The trade triggered off our 'workhorse pattern', but because no one mentioned it I'll track this one on paper. The first partial profit should be taken at p2=25.10, o-c-o with a stop-loss on the entire position at 23.09.