Silver

Earlier, I'd hung out a long-term chart to show how Silver could fall to as low as 10.82 before the bear market has run its course. More immediately, however, there is jeopardy to 14.06, a Hidden Pivot target that will become an odds-on bet if the September contract cracks p2=14.52 by more than a few pennies. The futures were a spec buy Monday on the bounce from that number, but because the rally is so precarious, I'd suggest taking a partial profit on the small bounce that has occurred so far. The pivot at 14.06 looks likely to provide a precise bounce, and it can therefore be bought aggressively if you've been short on the way down. ______ UPDATE (July 26, 2:15 p.m. EDT): Like gold futures, September Silver has reversed from a low that did not quite achieve an important Hidden Pivot target -- in this case, 14.06, derived from the daily chart.  This is tentatively bullish, and it would become significantly moreso if buyers are able to drive this vehicle above July 20's 14.980 peak in the next day or two. (See inset, a new chart).  _______ UPDATE (July 27, 5:51 p.m. EDT): Monday's clueless dithering did nothing to strengthen the bullish case for the near term. If Silver goes lower, use the three levels shown in the chart to gauge weakness: p (14.275), p2 (13.923) and D (13.570). As always, a decisive breach of one would imply more weakness to the next.  Alternatively, a pop exceeding 14.960 would put bulls back in charge, at least for the time being.

I've hauled out a long-term chart because nothing of consequence has occurred in Silver futures in months -- just two gratuitous price humps that have left them sitting almost exactly where they were on St. Patrick's Day.  The weekly chart tells a more interesting story, however, especially since the pattern shown has been well corroborated by numerous tops and bottoms centered on the 17.970 midpoint pivot. The picture suggests that July contract will eventually fall to 10.820 before the bear market begun a little more than four years ago has run its course. How likely is this? I'd say the odds are about 60%, although they would decrease to around 30% if the futures were to rally above the external peak I've marked at 21.525. In the meantime, we can trade this vehicle from either side of the market, based on the trend in whatever time frame we choose.

The downtrending pattern shown is not going to win any beauty prizes, but its precise interplay with the red line, a midpoint pivot that has turned from support into resistance, lends authority to the target itself, 15.185. This is significantly worse that I am expecting in gold, but only time will tell which leads the way. If the weakness continues down to the target, however, that would be bad for both, since it would generate a bearish impulse leg not only on the hourly chart, but on the daily.  Considered as a mechanical trade, please note that July Silver was a short last Wednesday from 15.860, stop 16.085. To hint of a turnaround, bulls would need to push above 16.110 within a day or two. _______ UPDATE (9:15 p.m. EDT): A sharp rally has turned the short-term picture quite bullish (see inset, a new chart). We'll let this week's further price action tell us whether the buying is for real. _______ UPDATE (April 28, 10:14 p.m.): In robustly bullish fashion, the rally continued, knocking off two 'external' peaks in the process (see inset, a  new chart). This effectively refreshes the bullish energy of the 30-minute chart, making more upside likely in the days ahead. _______ UPDATE (May 1, 12:15 a.m.): Thursday's knockdown changed the short-term picture without turning it hopeless. Assuming the corrective rally in progress early Friday morning goes no higher than 16.195, we might expect a tradable bounce from p=15.730 on any next leg down. This midpoint pivot should be adjusted higher if point 'C' (16.195) migrates higher overnight. (Note: A=16.730 on the 30-minute chart.) _______ UPDATE (May 3, 10:47 p.m.): A slightly altered pattern yielded a midpoint Hidden Pivot at 15.795.  It is moderately bullish that the futures have reversed from above it. Now, a close above

Price action near a midpoint Hidden Pivot resistance at 17.240 should tell us all we need to know. If the futures push easily past it, expect the rally to continue over the near term to at least 18.045. The Hidden Pivot also has the potential to set up a low-risk 'camouflage' entry opportunity for bulls who missed getting aboard Sunday night's gap-up opening. Specifically, if the futures pull back in B-C fashion after exceeding 17.240 by a tick or two, you should zoom down to the 5-minute chart to look for an uptrending ABC entry pattern. The AB segment would be legitimately impulsive, since it will have surpassed the external peak at 17.195 recorded March 27 on the way down. ______ UPDATE (11:28 p.m.): Buyers probed and diddled the 17.240 pivot for nearly seven hours yesterday before taking a running start at it. This they did, however, at a time of day when durable rallies almost never happen, and this one was no exception. Buyers will need to regroup for another try, presumably within the bullish framework of the pattern shown. There's no point 'C' low here yet, but if and when one is generated, use the midpoint resistance of the resulting pattern to gauge the strength of any rally.

Silver is taking a well-earned breather after ascending from 15.51 to 18.50 in the first three weeks of January. This amounts to a 20% rally, and although it was punctuated by a couple of stalls, buyers at least kept plugging along in the right direction. There was unfinished business at the end of their trek, however, in the form of an unachieved target at 18.755 (see inset). This is not necessarily fatal, but it is sufficient to raise a yellow flag. We'll monitor the pullback closely, looking for signs of incipient strength.  Most immediately, it would be evident in a rebound from the p midpoint support of the pattern shown.

Silver hasn't made nearly as much headway as gold in recent days. Although the latter pulled back to a midpoint pivot Monday ahead of a presumptive strong push higher, March Silver has yet to even reach that threshold. That would require a 53-cent thrust from these levels -- quite a move merely to reach the starting line. In any case, while there is immediate upside potential to as high as 18.710, buyers will have to prove their mettle first with a decisive push past p=17.110. By 'decisive,' I mean to imply at least 5 cents, or 17.160. Night owls looking to get ahead of the move should note that the very minor pattern shown at the right-most edge of the chart tripped a buy signal at 16.510, and that the 16.590 mipoint resistance associated with it has already been exceeded by 5.5 cents. This would imply a follow-through Monday night to at least D=16.750, but anything significantly above it would add to the likelihood that p=17.110 of the larger pattern will be  achieved. ________ UPDATE (January 15, 11:57 p.m.): Silver has fallen well behind gold, having spent the last three days dawdling at the 17.110 midpoint pivot identified above.  My short-term forecast for gold is bullish, but it remains to be seen how far it can get with silver tugging so hard the other way. ________ UPDATE (January 18, 7:08 p.m.) The futures have pulled back after spiking on the opening Sunday night to 18.025. The 18.710 target is well in play, but you should be prepared for a pullback to as low as the 17.110 midpoint pivot noted above before buyers can complete a bull move signaled in the first week of January.

There is everything to like about the bullish pattern shown, and so it remains only for the futures to push above the 16.723 midpoint pivot in order to energize bulls for a further push to at least 17.375.  An easy move through either of those pivots would portend still higher prices -- potentially as high as 18.725 before the rally cycle begun on November 30 from 14.155 has burned itself out.  Alternatively, a downdraft that touches 15.500 would generate a bearish impulse leg on the hourly chart. Although that would be cause for discouragement, it would not necessarily be reason to despair.

Silver futures are well off their lows Sunday night after missing a 13.910 downside target by 20 cents. Given the clarity of the target, this could be read as an incipiently bullish sign. At the very least, bulls would earn the benefit of the doubt if they can generate a positive impulse leg on the 15-minute chart. At the moment, that would require a sustained push today exceeding 15.495.  Regardless, any rally to the 15.300 'midpoint pivot' should be viewed as an opportunity to get short, albeit with a tight 'mechanical' stop or via camouflage. _______ UPDATE (9:21 a.m.):  It is obviously bullish when DaSleazeballs have to resort to such brazen tactics to shake loose some contracts. Last night's powerful rebound has generated a bullish impulse leg on the hourly chart. However, before we draw any conclusions, we'll have to see how the uptrend does relative to the midpoint Hidden Pivot resistance at 16.205 and to D=16.915. Here, a=14.805 at 1:00 a.m.  _______ UPDATE (December 2, 8:39 p.m.): Silver looked to be in better shape than Gold at Tuesday's close.  If the March contract can push above a 16.723 midpoint resistance today, look for more upside to at least 17.375.

December Silver has stalled Sunday night at the precise midpoint of the bullish pattern shown. We shouldn't pretend to know how this will play out, but if the futures can push just a bit higher, exceeding the red line by perhaps 3-4 cents, it would greatly shorten the odds of a follow-through to the 16.265 target. Monitoring the very lesser intraday charts, night owls attempting to climb aboard should wait for the first uptrending ABC pattern following a breakout above 15.870. A bc-type pullback from in-between that high and the one at  15.880 would be the most appealing entry opportunity that I could  imagine at the moment.