Silver

Occasionally there are trade set-ups so perfect that you feel like they can't miss. That was the case in Silver futures yesterday, when the ABC-type correction (see inset) bounced from a 'Hidden Pivot' support as pretty as they come.  The trading 'tout' I sent out the night before anticipated the bounce very precisely -- so precisely, in fact, that I'd suggested getting long with a 19.335 bid and a stop-loss just three ticks below it (equivalent to 1.5 cents). In the actual event, the futures fell to 19.325, two ticks beneath the bid, ensuring that anyone who followed my tout exactly would have gotten filled on the order. The May contract then trampolined 48 cents higher overnight. If you'd bought as advised and cashed out at the top, your gain would have been $2400 per contract.  The 19.320 stop-loss would have subjected you to initial theoretical risk of just $75. (I say 'theoretical' because one cannot always bail out of a position on the terms one desires.  That is one of the risks of the game.) Commodity trading can be risky, of course, and there are no assurances that future trades offered here will work out as well as this one. Could you have done the trade yourself?  Here are my verbatim instructions:  "Yesterday’s dive to 19.220 found support just above January’s 19.030 low, but the subsequent bounce is as yet insufficient for us to conclude that the worst is behind.  The very lesser charts would turn short-term bullish today on a print at 19.675, but anything shy of that should be regarded as shorting opportunity.  All that aside, night owls could attempt bottom-fishing at p=19.335 with a stop-loss as tight as three ticks (see inset, a new chart)." So confident was I in this trade that I also spotlighted

Three weeks of ho-hum price action have left the May contract with a mildly bearish bias, although any weakness would likely pick up support from lows near $19 recorded between early December and late January. Alternatively, I'll stipulate that the futures must close above the 21.168 midpoint pivot of the pattern shown before we infer that bulls are emerging from their torpor. _______ UPDATE (6:02 p.m.): Yesterday's dive to 19.220 found support just above January's 19.030 low, but the subsequent bounce is as yet insufficient for us to conclude that the worst is behind.  The very lesser charts would turn short-term bullish today on a print at 19.675, but anything shy of that should be regarded as shorting opportunity.  All that aside, night owls could attempt bottom-fishing at p=19.335 with a stop-loss as tight as three ticks (see inset, a new chart). _______ UPDATE (11:29 a.m.):  This trade worked with absolutely perfect precision, since the overnight low was 19.235 -- TWO ticks beneath where I'd suggested putting your bid. A 48-cent rally ensued.  (I also drum-rolled the trade, although without giving the exact price, in 'Today's Action'. If you filled the order please let me know in the chat room so that I can establish a tracking position for your further guidance.

Silver's histrionics over the last three days have nearly worn me out. That said, although the May futures are in a duel between bulls and bears on the lesser charts, there was a potential buying opportunity setting up on the 15-minute chart. Specifically, you could try bottom-fishing at the 19.658 target shown, using a stop-loss as tight as 3-4 ticks for a single contract. If you use 'camouflage to get aboard, it's okay to step up the size. _______ UPDATE (April 1, 10:16 p.m. ET): The actual low was four ticks beneath the target and was followed by a 28-cent rally.  However, since no one in the chat room reported a fill, I'll assume this opportunity went unexploited. _______ UPDATE (April 2, 4:26 p.m.): With today's spike, the futures have now rallied 51 cents from the forecast low at 19.655. ______ UPDATE (April 6, 4:02 p.m.): A spike on the opening bar showed promise, since it was bullishly impulsive on the hourly chart. However, the subsequent relapse reversed the effect, creating a duel between bears and bulls. On balance, my bias will be mildly positive when the futures begin a new week Sunday night. _______ UPDATE (April 7, 11:56 p.m. ET): The tedium of the last few days is bullishly impulsive nonetheless (unlike June Gold), so look for the futures to achieve a minimum 20.060, and thence 20.345 (see inset, a new chart), if buyers can surmount the persistent weakness of the broad averages. _______UPDATE (April 11, 1:07 a.m. ET): Silver's recent thrust has bettered the higher of the two targets given above by 5.5 cents (see inset), implying that still higher prices impend once this correction has run its course.  For trading and positioning purposes, I'd suggest using the pattern shown, with a 20.615 target. Camouflageurs take note: a

Sellers did some damage to the hourly chart Wednesday, opening a path to the 19.075 downside target shown, or perhaps to 18.930 if any lower. There will be a last-ditch opportunity for this vehicle to turn higher from 19.875, the Hidden Pivot target of a lesser pattern. Please be aware, however, that a rally first to its midpoint sibling, 19.875, can be shorted cautiously. _______ UPDATE (March 30, 6:48 p.m. EDT):  The futures have bounced from 50 cents above the 19.075 target, but it remains to be seen whether bulls have the guts for a decent follow-through.  If so, they should have little trouble pushing this vehicle to at least 19.945, the target of a small pattern that comes from the hourly chart (where A=19.595).

Silver has lagged gold so far this year, but it could make up for it with an unpaused push exceeding the 23.145 peak shown. Note, however, that even if the move happens, it will have required a pullback and a running start from the 21.025 low recorded last week. That would have mildly negative implications down the road, since it would suggest that silver buyers, at least for now, have reservations that do not seem to be troubling buyers of gold. Silver could eventually come to lead the charge with an uncorrected rally that blows past not only the peak at 23.145, but the next at 24.780. I've labeled these price points in the chart for your further guidance. ______ UPDATE (March 10, 8:10 p.m. EST): The pullback from February's peak has at least temporarily negated any possibility of a powerful impulse leg such as the one described above. Now, unless the next upthrust surpasses the three labeled tops without correcting, we would have to infer that Silver's 2014 rally is not destined for greatness. _______ UPDATE (March 17, 1:44 a.m. EDT): A rally with immediate potential to 23.025 has stalled precisely at the 21.818 midpoint pivot associated with that number (see inset, a new chart). I expect the midpoint resistance to fall soon, but camouflageurs and Pivoteers should note in the meantime that any breakout above it would trip a buy signal. _______ UPDATE (March 20): The May contract has maxed out the corrective pattern shown (see inset, a new chart), implying that conditions will be more felicitous for bulls in the days ahead. _______ UPDATE (March 26, 1:04 a.m.): The futures appear to be in distribution below my worst-case target -- not exactly a healthy sign. Bulls could remedy this today with an upthrust exceeding 20.260. That would

Sunday night's leap has generated a strong impulse leg on the intraday charts, decisively surpassing Thursday's would-be nettlesome high at 21.515. The implication is that this rally will reach 21.740 if it can blow past midpoint resistance at 21.540.  Because the rally has already triggered a buy signal at 21.450, it is fair game for camouflageurs looking to board Sunday night. ______ UPDATE (9:20 a.m. EST):  Silver topped, to the exact tick, at my 21.740 target, then fell 36 cents. Hope my tout was useful.

The March contract has been tediously biding its time for more than a week, presumably consolidating for the next push higher. Although yesterday's price action tripped numerous false 'buy' signals tied to the big pattern shown (with a Hidden Pivot target at 22.300), we can focus on much smaller stuff to reduce the risk of getting aboard. There are many 'external' peaks on the 5-minute chart (see inset) that could prove suitable for this purpose, but the goal in any case will be to hold theoretical entry risk to $50 or less per contract. _______ UPDATE February 26, 10:28 p.m. EST): Yesterday's downdraft has the potential to send the futures down to as low as 20.395 this week, although bulls will have a rescue opportunity at exactly 20.870, the midpoint support shown (see inset).  Either number can be bottom-fished, but I'd risk no more than 3-4 ticks theoretical per contact if you use a limit bid. _______ UPDATE (February 28, 2:43  a.m.): Bulls turned a potential rout into a duel Thursday, but it was too close to call early Friday morning. If they have prevailed overnight, look for the rally to hit  21.465, and anything above that would likely set a bullish tone for next week. Alternatively, a resumption of the downtrend could catch a bounce from 20.955, but any lower would portend more weakness over the near term to as low as 20.430.  Both scenarios are shown in the chart.

March Silver still needs to pop above the November 6 'external' peak at 22.080 (see inset) before we can breathe a sigh of relief. The recent peak failed by 11 cents to do this. Last Friday's rally suggests there's enough power remaining to drive this outcome, but it will need to occur without a b-c correction on the daily chart to imply there is nascent-bull-market strength behind the move from the January 30 low.  Camouflageurs, please note that Tuesday's 21.980 peak was about as subtly impulsive as it gets. The bullish ABC remains intact as of this moment and implies a long entry would be triggered by a 21.542 print. _______ UPDATE (10:27 a.m. EST): The trade is a 'go', having tripped the entry price and subsequently reached the midpoint pivot at 21.708. That made it possible to take a partial profit on an assumed initial position of four contracts. The remaining two contracts would have a cost basis of 20.924 if the theoretical gain of $835 per contract is imputed to them.  If anyone actually did this trade, please let me know in the chat room and I will establish tracking guidance. For now, you should use a break-even stop at 21.370, just below the point 'C' of the pattern. A third contract should be exited at D=22.040. ______ UPDATE (February 24, 1:36 a.m.): After popping to within six cents of the 22.040 target, March Silver has swooned Sunday night, stopping out any tightly stopped positions that may have remained after Friday's partial-profit-taking opportunity.  Since we have a relatively straightforward and painless way to get long again, there is no need to abide swings against us of more than a few pennies while we wait for the rally that will take silver to new recovery highs. At present, using

Silver has shown somewhat more pluck than gold lately. Although the bulls' safety margin for more weakness has eroded, it  is not quite down to the nubbins, as is the case with February Gold. As such, the benefit of the doubt we might accord the good guys is somewhat more elastic than that which obtains for gold bugs.  Assuming the 19.280 point 'C' low holds, the daily chart would turn quite bullish on a print at 20.925.  That would exceed an external peak 'along the wall', generating the most impressive bullish impulse leg we've seen since last August.