Silver

Technically speaking, the futures became a 'mechanical' buy on this morning's plunge to the red line, a midpoint Hidden Pivot support at 17.745. In practice, however, due to the $1500-per-contract entry risk, the only way I could have suggested getting aboard would have been to 'convert' the mechanical signal to a camouflage one. This is never an easy task, and that's why I didn't suggest it. Lest subscribers feel they missed an opportunity, the 'camo' entry approach, even on the 3-minute chart, and even seen in retrospect, was treacherous, to put it mildly. What this implies is that we will get long in silver futures using only the most cautious approach. Specifically, we'll look for a 'mechanical' trigger only on a pullback to the green line, or via whatever juicy 'counterintuitive' opportunities present themselves intraday. Even then, we'll do the CI trade only if the signal occurs within a textbook ABC pattern on the lesser charts. A word of caution to those of you who would trade the mini-contract to reduce risk: In fact, this vehicle is so illiquid that in many instances it doesn't help much to be precisely right about trend and target.

We've been using an 18.665 rally target for two weeks, and although the futures have made steady progress toward it over that time, the pace has been agonizing. Tonight, even with a boost from news that the U.S. has attacked Syria with cruise missiles, bulls are struggling to maintain altitude. For that reason, I have substituted a less ambitious target at 18.625 (see inset) as a possible trend-stopper, at least for the near term. The pattern is both compelling and obscure, and those traits in conjunction are likely to lend precise stopping power to the Hidden Pivot. If, on the other hand, the futures blow past it with ease, we'll have a solid basis for maintaining a bullish bias as we trade the move.

May Silver's hourly chart looks more impressive than gold's at the moment, since Monday's strong rally exceeded a clear and formidable Hidden Pivot resistance at 17.990 as though it were not there (see inset). Also, because the move surpassed an external peak at 18.010 recorded on March 3, for trading purposes we'll have our choice of impulse legs all the way down to 17.460, a prospective point 'A' recorded on March 20. I'd like to see some more correction action before we decide which one to use. Whatever happens, the  rally off the next pullback low would need to exceed March 2's very important 'external' peak at 18.510 to keep bulls' winning streak going. _______ UPDATE (Mar 29, 1:25 a.m. EDT): Here's an encouraging chart that shows a rally target at 18.665. I'd have preferred that buyers had demolished the 17.745 midpoint pivot the first time they encountered it, but it actually took three days to leave it behind.  That somewhat diminishes the power we might impute to the move, but it is not sufficient to impair a bet that 18.665 will be reached. It looks like a 50-50 bet to me at the moment. _______ UPDATE (Mar 30, 6:49 p.m.): No change. Silver's intraday charts continue to look significantly better than gold's. _______ UPDATE (Apr 3, 9:45 p.m.): There's nothing at this point to make one think May Silver won't eventually reach the 18.665 rally target we've been using since, like, forever. But couldn't bulls have accomplished this modest feat with a little more brio?  In any event, we'll need to see a decisive thrust past 18.665 before we can infer confidently that buyers have been masking their strength. If so, that would be a great way for the rally to really take off, since there will be plenty

Silver has been lagging gold recently, but it would catch up quickly with a thrust today exceeding the 17.745 midpoint Hidden Pivot of the rally pattern shown.  If the futures can get past that number easily, I'd make them an even-odds bet to reach the 18.665 target within the next 4-7 days. And if the rally exceeds that Hidden Pivot resistance to0, especially with panache, we could infer that a push to $20 or higher is in the works. Pivoteers may have noticed that the May contract was a fetching 'counterintuitive' buy on last Wednesday's stab through the green line. Whether you did the trade or not, the thrust was reason to expect the rally to continue at least to 17.745. Let it happen soon, though, since each day buyers loiter, the heavier the rally will become. ______ UPDATE (Mar 21, 7:07 p.m.): The rally stalled precisely at the 17.610 midpoint pivot of a lesser pattern (click here) than the one noted above. If the futures push decisively past it on Wednesday they'll become an odds-on bet to reach the secondary pivot (p2) at 17.800. That would be enough to refresh the bullish energy of the larger pattern noted above, with an 18.665 target. _______ UPDATE (Mar 22, 9:40 p.m.): The futures struggled in vain for yet another day to push above the 17.610 pivot. The pullbacks were relatively shallow, however, and that's why a decisive thrust higher still looks like a good bet.  _______ UPDATE (Mar 23, 8:17 p.m.): The futures finally pierced the 17.610 pivot decisively before dropping back to it. This is bullish, but not sufficiently so to celebrate, not yet.

May Silver hit an air pocket Thursday morning, dropping 70 cents, or nearly four percent, in the space of an hour.  From a technical standpoint the kamikaze dive tripped a short-sale signal at 17.755 that is tied to a 15.355 target. I expect the nastiness to come down to at least 16.948, the midpoint pivot indicated by the red line. If bulls are going to turn things around, that's where they'll have the best chance of succeeding.  If the futures instead crush the pivot, especially the first time they encounter it, that would shorten the odds of a completion of the move down to 15.400. _______ UPDATE (Mar 5, 7:06 p.m.):  Silver took a leap out of a deep hole Friday, but so far it hasn't recouped even half of the previous day's nearly 70-cent loss. The May contract would need to hit 18.405 by Wednesday at latest to offer any reason for encouragement. Otherwise, the analysis proffered above can stand as given. _______ UPDATE (Mar 8, 10:20 p.m.): Use the midpoint Hidden Pivot at 16.885 (see inset, a new chart) as a minimum downside target for the near term. If it fails to generate a significant bounce, expect May Silver to fall below $16 -- possibly as low as 15.355, or even 15.230. _______ UPDATE (Mar 9, 7:11 p.m): In after hours trading, the futures have bounced -- weakly so far -- from a low at exactly 16.855, the minimum downside projection I'd provided above. The bounce had better be a good one or silver could find itself in big trouble. _______ UPDATE (Mar 12, 8:13 p.m.): The rally off my downside target has been unimpressive so far. Let's set an alert at 17.315, just above a key peak recorded last week on the way down, so that we

The rally pattern shown, with a Hidden Pivot target at 18.260, was so clear and compelling that we should assume that because the futures exceeded it decisively, they have sufficient energy for another leg up once the current correction has run its course. The more quickly this occurs, the better the odds that the next upthrust will take out the key high at 19.120 recorded on election night.  That's a very important benchmark, since any rally that exceeds it would put a 22.024 target in play. (Note: I don't expect that number to work precisely as resistance, since it comes from a blended weekly chart.)

The gnarly rally pattern shown in the chart is a very good one that meets all of our criteria, meaning its 18.055 target has the potential to provide us with valuable intelligence if and when it's hit. If the futures bulldoze their way past it on first contact, that would strongly imply that buyers have the moxie to shoot for the cluster of highs near $19 recorded on election night. Many bulls would have gotten badly trapped up there, and that's why the specific level should be regarded as crucially important resistance.  There is not much supply between $18 and $19, so expect a relatively quick move through that range if and when the futures bust past 18.055.  _______ UPDATE (Feb 13, 10:29 p.m. EST):  No change. Please note that there is an open trade on The Scoreboard that is currently showing an $11,000 paper gain. The wide-stop-loss just added to the post is intended to let subscribers who still hold the position swing for the fences. _______ UPDATE (Feb 14, 7:11 p.m.): The peak of today's gyrations hit 18.090, just a hair shy of an old target at 18.115. If buyers can push above it on Wednesday, bulls can take encouragement. _______ UPDATE (Feb 15, 9:14 p.m.): Bulls continued to lollygag just beneath the 18.115 target. The good news is that the so-far shallow retracement probably has the bad guys -- i.e., short sellers -- on the ropes. _______ UPDATE (Feb 16, 8:46 p.m.): Another day of lollygagging, although the futures finally touched 18.115 for the first time in this recovery cycle. _______ UPDATE (Feb 22, 10:40 p.m.): Zzzzzzzz. No change.  ________ UPDATE (Feb 23, 4:00): 18.320 is the highest target I can project for the rally begun just before Xmas. I will now recommend exiting the position --

Because of the gratuitous nastiness of yesterday's reversal, I've selected a chart for today that  shows a bullish pattern big enough not to have been affected by it.  Indeed, in this picture, March Silver would become a speculative 'mechanical' buy on a pullback to the red-line pivot; and an even more enticing one if the futures were to fall all the way back to the green line 65 cents below.  That would represent a decline of about 3.6%, so we needn't be terribly concerned  if sellers were to hit this vehicle hard for another day or two, driving it down by perhaps a further 40-50 cents; for the move would still look merely corrective. This is no guarantee, however, that Silver won't disappoint us as it has so many times since July, when its 25% decline, presumptively corrective, began. For now, we'll wait for buyers to get traction. They'll have their work cut out for them on the next rally, since it would need to surpass November 9's 19.120 peak -- a nearly 9% move from here -- to reinvigorate the daily chart.

Bulls impaled a Hidden Pivot obstacle at 17.815 that I'd flagged here last night, setting a path to as high as 18.730 in the weeks ahead.  First, though, we should focus on a lesser target at 17.925 associated with the bullish pattern shown (see inset). Because Wednesday's high hit yet another HP target almost exactly, however, we should expect a retracement that takes at least a day or two to run its course.  If buyers instead decide to take March Silver higher without such a correction, we could infer that the anticipated move to 18.730 is all but in-the-bag. In the meantime, a pullback to the red line (17.593) can be used to get long 'mechanically' at 17.590, stop 17.400. The implied entry risk of this trade would be a theoretical $950 per contract, but you could cut it down to sized by substituting a 'camouflage' entry provided you are familiar with the tactic. A third way to get aboard would be by way of a 'counterintuitive' entry if the point 'C' low falls within a few ticks of Tuesday's 17.560 low.  The chart illustrates this hypothetically.