Silver

More downside over the near-term to at least 15.865 (see inset) looks very likely, so traders should position from the short side. The opportunity may be past by morning, but night owls can use an entry trigger on the lesser charts (i.e., 5-minute bar or less) to get aboard. I've highlighted the relevant ABC pattern, which appears at the rightmost edge of the chart. ______ UPDATE (9:23 a.m. EDT): Anyone who got short as advised made a pile of money overnight without much stress.  The futures have plummeted and are currently down about 63 cents, having recorded a so-far low at 15.635 that exceeded our target by by 23 cents. _______ UPDATE (November 5, 8:50 a.m.): A 14.510 target flagged during Monday's 'impromptu' Q&A remains in force.

Bulls can take mild encouragement from Silver's price action of late, although it would be premature to exhale a big sigh of relief. The rally off Monday's low is bullishly impulsive on the hourly chart and has already surpassed the midpoint resistance at 17.478.  This implies more upside to at least 17.695, the midpoint's 'D' sibling, over the near term. However, Hidden Pivots are less important here than the heap of supply that is layered all the way up to 18.00. Let's see how buyers do eating through it lest we wax overly bullish prematurely.

The futures obliterated an 18.130 Hidden Pivot support on Friday, implying more downside to the 16.820 target shown. Because a tradable bounce from that Hidden Pivot seems likely,  I am recommending bottom-fishing there, albeit with a very tight stop-loss (or with a 'camouflage' bid on charts of 3-minute degree or less).  The futures have already slightly exceeded the 17.715 midpoint pivot (p1) associated with A=32.802 (1/25/13), so the new midpoint support (i.e., 16.820) is potentially a very important number. Notice that its easy breach would put an 8.776 'D' target in play. ______  UPDATE (Sep 23, 9:22 p.m. EDT): A Hidden Pivot at 16.270 should also be mentioned as a downside target if the selling snowballs. It comes from a so-so, 'sausage' pattern on the weekly chart, where A=24.865 on 8/30/13. _______ UPDATE (September 30, 3:53 p.m.):  The low of today's selloff came within 3 cents of the 16.820 target flagged above.  For reasons noted above, this Hidden Support must not fail. _______ UPDATE (Oct 1, 9:23 p.m.): To remind you (and possibly buck you up): There are two never-say-die pivots not far below with the potential to generate a bounce:  16.500; or if not there, 16.270, as noted above. The lower number is the more conservative and promising place to try bottom-fishing with a tight stop. ________ UPDATE (October 3, 4:37 a.m.): The 16.820 target flagged above is holding, but the futures haven't gotten much loft after falling within three cents of it last week.   It would take a run-up to above 17.520 for this vehicle to get out of jeopardy.

The impulse leg on the chart shown is bogus, since the point-B low failed to exceed the 18.500 low recorded in June 2013. Ordinarily such a pattern would yield a D target that we should deem less than reliable. In this case, however, I've certified the pattern anyway because, basis the September contract, the point-B low actually did exceed the key low from last summer. Regardless, the 18.130 target is probably still good enough for government work, and so I'll suggest bottom-fishing there with the tightest stop-loss you can abide. If you initiate the trade using camouflage, you can play more aggressively by stepping up your size.

The futures came down yesterday almost as sharply as they had gone up.  Although this did not invalidate the bearish target at 19.100 given here previously, it generated a promising impulse leg on the hourly chart that should temper our bearishness, at least for the time being.  What's needed now is a follow-through rally -- a c-d leg, in Hidden Pivot parlance -- that pushes easily past the midpoint resistance (and thence the D target).  I've sketched this hypothetically, but all we can do in the meantime is keep our fingers crossed.

Silver's ratcheting descent has come to seem almost inevitable from one day to the next. We should assume it will continue to the 19.165 target, at least, or to 19.100 if any lower. If you are inclined to short each lurching step, I'd suggest using a mechanical stop-loss on entry. This implies shorting the tops of minor, upward corrections, and then using a stop-loss equal to a third of what you  stand to gain if the futures continue lower to the target.

Having neatly fulfilled our 19.655 downside target, September Silver looks primed for another leg down. My target is 19.165 (see inset), and you shouldn't hesitate to bottom-fish there was a stop-loss as tight as a few ticks.  You can trade the target more aggressively if you've been short on the way down, but it's not going to be easy to jump on the downtrend because it has been attracting its share of new fans since late July. Alternatively, a camo-style buy signal would be tripped on a small rally exceeding the 19.760 'external peak that I've labeled.

Silver has looked pretty punk lately in comparison to gold, and unless it pops above the 20.290 'external' peak shown, its next stop on the way down will be 19.655. The rally would have to be uncorrected once the initial peak at 20.185 is exceeded, but that shouldn't be a problem, since the two peaks are so closely spaced. Buyers seeking a speculative handhold should look for 'camouflage' entry opportunities on the 15-minute chart or less. As we went to press, there was a potential buying set-up on the 5-minute chart, based on a=19.990 at 1:35 a.m. EDT.

Bulls have a chance to seize the advantage with a push above the 21.790 peak shown. The futures have been in a muddle for the last month, but an uncorrected rally exceeding that peak would turn the daily chart unambiguously bullish. In the meantime, if the opportunity should arise, traders should consider bottom-fishing with a four-tick stop-loss if this vehicle corrects down to the 20.815 midpoint indicated by the red line.