Silver

December Silver traced out a pattern Friday morning that closely resembled the one I'd sketched to illustrate a possible 'counterintuitive' buying set-up. This time, however, we took a pass, since the entry signal came at a time of day when bullion seldom reverses vigorously to the upside, especially in the absence of crypto-dovish talk from the Fed's chief spokesclown. The decision subsequently proved to be the correct one, since the futures never even made it to the midpoint pivot, where we might have cashed out half the position. The 20.350 rally target remains valid nonetheless, and there are at least two ways to get aboard for the presumptive ride. The first would be to use a counterintuitive entry similar to the one I've sketched -- similar, actually, to the one we rejected for reasons of timing on Friday; the second would be via a 'mechanical' bid at the 19.533 midpoint pivot, stop 19.260. That would imply initial risk of about $1300 per contract, but you could shrink it to a theoretical $60-$80 by using 'camouflage'. This implies entering on an uptrending ABC pattern of very minor degree once 19.533 has been touched on the way down. This tactic is recommended only for those who fully understand it, but if you're eager to learn, stay tuned to the chat room discussion in real time._______ UPDATE (Sep 26, 7:29 p.m. ET): The futures came down to the 19.533 midpoint pivot of the large pattern shown here yesterday, tripping a 'camouflage' buy signal thereafter at 19.486 (the green-line 'x' in the new chart shown).  Half the position would have been exited for a profit at p=19.513 if you'd played it by-the-book. However, I won't establish a tracking position unless I hear from at least two subscribers in the chat room who got aboard

Buyers gave up half of the gains they'd achieved in the early going, but not before they'd generated a fresh, bullish impulse leg that exceeded two 'external' peaks on the chart shown. This is promising price action, and it can be exploited by night owls if the futures pullback in the way I've sketched. The entry signal would be 'counterintuitive' and less risky in theory, the closer the eventual 'C' is to 'A'.  The risk:reward proposition is enhanced by a much bigger ABC rally pattern driving December Silver. It has commensurately higher targets noted here earlier that range as high as 23.745.

The corrective pattern shown is not of the highest quality, since its point 'b' low did not exceed any prior lows. Even so, it can serve to project minimum downside over the near term to the 18.060 target shown. I wouldn't rely on this Hidden Pivot for purposes of precisely managed bottom-fishing against the trend, but it can be used nonetheless as a place to look for a 'camouflage' entry opportunity ahead of a possible bullish reversal. Essentially, this would entail using the one- or three-minute chart to generate an entry signal on the first a-b-c uptrend that occurs from within a few ticks of 18.060. As always, an easy move through a Hidden Pivot level such as 18.060 would imply that the trend -- in this case a downtrend -- is likely to continue.______ UPDATE (Sep 19, 8:17 p.m. ET): Today's modest rally has given bulls a little breathing room. If they can extend the uptrend on Tuesday to exceed 19.605, that would put a 20.350 rally target in play -- one for which key resistance would come at 19.533. _______ UPDATE (Sep 20, 6:24 p.m.): Bulls spent the day screwing the pooch, but at least they didn't give up much ground. Because of this, they should be presumed to hold a small edge on Wednesday. ______ UPDATE (Sep 21, 6:41 p.m.): Buyers blew past the 19.533 midpoint pivot with such force that they seem all but guaranteed to reach the 20.350 target of the rally pattern shown.  Keep in mind that there is a still larger ABC pattern pushing silver as well -- one that projects to 22.460, or even to 23.745 if any higher.

Friday's selloff blew my delicate bottom-fishing strategy to smithereens, inflicting a loss of $100 theoretical per contract on anyone who used the 19.385 bid and four-tick stop-loss I'd advised. The daily chart still looks encouraging for buyers nonetheless, since last week's downtrend followed a rally that slightly exceeded the two external peaks that I've labeled. This generated a bullish impulse leg that implies any weakness should be bought -- ideally via a 'counterintuitive' signal along the lines of the hypothetical set-up I've sketched. If you trade this vehicle, stay tuned to the chat room for further guidance in real time. _______ UPDATE (September 12, 9:36 p.m. EDT): The futures tripped a 'counterintuitive' buy signal at 19.174 off a pattern similar to the one I'd sketched. Since there were no reports in the chat room of fills, however, I have not established a tracking position. Regardless, I've posted a new chart to show you what you'll be shooting for: most immediately, a 'D' rally target at 20.400 that is subsumed by a larger pattern projecting to as high as 23.745. (Note: Only the lower target is in play at the moment.) Hidden Pivot levels x, p and p2 can all be used to effect a belated 'mechanical' entry, but because the implied initial risk is as much as $200o per contract, I'd strongly suggest using 'camouflage' to get aboard -- and even then only if you confidently understand the tactic.______UPDATE (Sep 14, 6:15 p.m.): It would take a pop above the 19.555 Hidden Pivot shown to get December futures' juices flowing. The presumptive target thereupon would be 20.345.

Today's strong rally surpassed two external peaks on the daily chart, implying there's real power behind it. Even so, buyers will need to torpedo a midpoint Hidden Pivot resistance not far above, at 20.460, to suggest they've got the wattage to power this vehicle to the pattern's 22.460 target. A pullback to the green line in 2-3 days would trip a 'mechanical' buy, stop 18.455, but we'll convert any such signal into a less risky 'camouflage' entry if the opportunity should arise. _______ UPDATE (September 7, 8:22 p.m. EDT): Today's high exceeded Tuesday's by only a few ticks, but that was sufficient to take out yet another external peak on the daily chart -- August 16's 20.220. This effectively refreshes the bullish energy of the chart and shortens the odds that any weakness in the next few days -- assuming there is weakness -- is merely corrective and should be bought._______ UPDATE (September 8, 8:56 p.m.): 19.600 is my immediate downside target on the 5-minute  chart: a=20.235 (9/6); b=19.815 (9/7); and c=20.020, but if it's exceeded by more than three ticks, the next place we might look for a bounce is from 19.450; or thence, 19.385. You can bottom-fish that last Hidden Pivot, also drawn from the 5-minute chart (a=19.950 at 9:40 a.m.) with  stop-loss as tight as four ticks.

Shifting to the December contract, we see a compelling bearish pattern with the potential to take Silver all the way down to 17.135 before the two-month-old correction has run its course. That would completely erase the Brexit rally, but it is hardly a done deal at this point. In fact, although we should use the 18.178 midpoint Hidden Pivot support as a minimum downside objective for the time being, it is positioned to offer a very enticing bet for traders looking for a good spot to try bottom-fishing with a very tight stop-loss.  If the bounce we might expect from this number goes on to exceed the external peak at 20.055 that I've labeled, it would be reason for shorts to dive for cover, since bulls by then will have regained control. ________ UPDATE (September 1, 12:01 a.m.): A pop today or tomorrow exceeding August 23's 'external' peak at 19.220 would turn the short term picture robustly bullish. Otherwise, there is no change in the analysis given above.

Monday's opening-bar dive turned Silver's all-but-interminable correction of the Brexit spike into a picture that is ever so slightly menacing. It overshot an 18.800 target (60-minute, a=20.515 on 8/10; b=19.375 on 8/17) by a whopping 14 cents, implying that the futures will likely need to go lower before they can find traction.  If so, I'd suggest putting Hidden Pivot targets aside for the moment and using the chart shown to stay abreast of the trend.  Alternatively, it would take a pop above August 16's peak at 20.120 to put bulls back on the offensive. _______UPDATE (August 25, 1:22 a.m. EDT): A midpoint Hidden Pivot at 18.475 broke September Silver's fall yesterday, but if it buckles, the futures will be on their way down to 17.860. Click here for a look at the pattern on the 60-minute chart._______ UPDATE (August 28): Friday's manic, meaningless Yellenbounce made the downtrending ABC pattern less compelling visually without altering its target, 17.860. That would require a thrust above the 19.090 point 'C', which would also generate a bullish impulse leg on the hourly chart.  ________ UPDATE (August 30, 1:21 a.m.): The futures turned ever-so-mildly bullish on the 15-minute chart with this pattern: a=18.705 (8/29 at 12:30 a.m.); b=18.940 at 8:30 p.m.); and c=not yet formed.

Ironically, yesterday's wacky histrionics, driven by Fed drivel, generated a promising 'counterintuitive' buy signal when the futures bounced to the green line. The target is 20.855, and this Hidden Pivot resistance will have a better chance of getting hit if the rally reaches the red line today, especially overnight or in the first half of the regular session. The 'counterintuitive' aspect of the trade is to be found in the point 'C' low, which fell a hairsbreadth above our point 'A' low. This barely qualifies as an uptrend, but that is why we call the trade 'counterintuitive. While most traders are focused on the question of whether the structural support represented by 'A' will hold, we're more interested in whether the barely-an-uptrend ABC trips a conventional buy signal. _______ UPDATE (August 19, 1:22 a.m. EDT): Yet another disappointing day, although the 20.855 rally target is still valid and will remain so unless 19.375 is exceeded to the downside. _______ UPDATE (August 19, 9:10 a.m.): This vehicle has found its way, almost to-the-tick, to a 19.205 downside target on the 120-minute chart, so expect a bounce. Here are the coordinates: a=20/825 on 8/2; b=19.616 on 8/7; and c=20.515. Notice that I have used lower-case letters for the coordinates, implying that the futures' dispiriting dirge since early August is merely corrective -- a bullish flag relative to June's powerful rally. _______ UPDATE (August 21, 1:07 p.m.): Friday's low just a hair above the 19.205 Hidden Pivot held, but the bounce so far has been unimpressive. Taking a step back, the selloff from early August's high still looks no worse than corrective in relation to June's steep rally. However, that doesn't necessarily mean this retracement cycle is done punishing bulls. _______ UPDATE (August 22, 1:10 a.m.): Silver looks horrendous. The absolute worst I

The bullish pattern shown has a lot of things going for it. The bad news is that if it fails to propel the futures to the 20.995 target on Friday and instead heads lower, more weakness would become likely next week. Like December gold, a pullback to the green line is technically a 'mechanical' buy. However, if it doesn't pan out, we should expect the weakness to continue down to the 19.300 Hidden Pivot support. A breach of this level, or even worse a closed beneath it, would imply that sellers are not yet done. ______ UPDATE (August 15, 7:12 p.m. EDT): Bull are running out of time and room for a push to 20.995, although the target will remain valid in theory until such time as C=19.515 is breached to the downside.