Silver

I almost never use conventional ABCD patterns any longer, but it's the only choice we have at the moment.  Fortunately, even lousy patterns that every pinhead and algo on earth see still work with respect to the predictive value of price action at p, the midpoint Hidden Pivot (p).  In this case, the decisive move through p=34.142 all but guarantees the rally will reach a minimum D=40.439. It seems odd that the freakish skew of the gold:silver ratio is about to end with so little fanfare, but in this case, all it will have taken to start bringing the two back into line is just a couple of extra-strong rallies in silver that went unmatched by gold.

Silver's long-term chart has been promising a run-up to at least 39.272 for years, but don't hold your breath. It's been stuck in an $8 range for more than a year, but bulls show little inclination to leave the comfort zone any time soon.  Moreover, you can see that even a $7 drop to the pattern's green line wouldn't have much impact on the big picture, even if investors would likely be feeling pretty disappointed by then. The most promising opportunity I can discern for bottom-fishing or augmenting a long-term position would come on a pullback to 30.033, the midpoint Hidden Pivot support of a corrective pattern projecting to as low as 26.058. The trade would be invalidated, however, by an upthrust exceeding 34.008. _______  UPDATE (Jun 3, 1:04 a.m. EDT): I'm just a tad skeptical about today's big rally, which fell six cents shy of the 34.995  'd' target of the super-gnarly reverse pattern shown. Let's stipulate that the futures close for two consecutive days above it, or trade above 35.800 intraday, before we assume they're headed significantly higher. 

Reaching d=35.982 shouldn't pose a problem, although we may be able to squeeze off a short from there, since it coincides with a voodoo resistance number. A two-day close above it would activate the 39.272 target of a larger pattern  (continuous weekly, A= 16.314 on 3/20/20). That chart has produced just one 'mechanical' buy signal, a profitable one from p=30.93, but a second dip to that price would be an appealing place to try again, stop 27.170. _______ UPDATE (Jun 3, 12:50 a.m. EDT): Silver’s big move today nearly maxed out the gnarly reverse pattern shown with a blast to 34.935 that came within six cents of d=34.995. Yes, I am just skeptical enough that we'll keep the burden of proof on bulls for now, meaning they've got to close this brick above 34.995 for two consecutive days, or trade above 35.800 intraday, to earn our confidence. 

Silver has been engulfed by tedium, almost too painful to watch. A breakdown below the sawtooth action of the last several weeks should be presumed headed to the red line, a midpoint Hidden Pivot support at 30.200. A tightly stopped buy there would be warranted if you feel like bottom-fishing, but it could take a while before the futures signal the trade. Neither bulls nor bears could be very happy at the moment, which is usually Mr Market's cue to deliver more of the same.

The midpoint Hidden Pivot support at 32.493 has repelled three bear assaults, hinting that the futures want to go higher.  Notice that the first time the futures came down to the red line, setting up a 'mechanical' short at the green line (x=32.986), the trade produced a quick $2400 profit when it plummeted once again to the red line. But this appears to have spent sellers, and that's why the chart is bullish, at least for the near term. Since I've provided a 'best bet' for a tightly stopped bid in June Gold (see tout above), let me do the same for July Silver:  32.480, exactly 40 cents below where it was trading when the clock ran out on Friday's impacted action. ______ UPDATE (May 12, 5:05 p.m.) The nice thing about no one giving a rat's ass about Silver is that when Gold gets crushed as it did today, Silver does necessarily fall in sympathy.  It just might, however, so be prepared for a drop to 31.505 (60-min, A= 33.835 on 4/29). You can try bottom-fishing there with a very tight stop-loss if you know what you're doing. 

July Silver has tripped a theoretical sell signal at 32.110 tied to a D target at 26.405. I doubt it will be that bad, but we should still be prepared for a fall to the midpoint Hidden Pivot, 30.210. We'll make that our minimum downside objective for the near term while planning to bottom-fish there with entry risk under tight control. Because of the way the pattern is constructed, with a somewhat unconventional 'A' and a 'p' Hidden Pivot in the middle of nowhere, a dip to p would provide an exceptional opportunity to bottom-fish.  This will obtain unless the futures reverse and pop above C=34.015.

The pattern shown, with a big-picture rally target at 35.445, has kept us in close harmony with the trend, but it never promised much satisfaction. Pullbacks haven't been sufficiently robust to trigger any 'mechanical' buys, and a short from d is unappealing because the target coincides with some prior peaks that are certain to attract a crowd. That doesn't mean the pattern is untradable, but it takes work. Mainly, it's a matter of hunkering down on the lesser charts to derive entry triggers from them.  The daily chart yielded up a fat-looking one at 32.565, but the turn from 15 cents above it suggests it may have had a fan club.

The reverse pattern shown, with a 35.425 rally target, is as gnarly as they come, but May Silver's forceful move through p=31.485 justified stretching for the highest target possible.  Recall that in even in lousy patterns, price action at p is still usually a reliable indicator of trend strength. Please note that using the more obvious 'a' low at 29.405 yields a 'd' target at 33.635, so be alert to a possible stall or even a shortt-term top there.

The May contract got a strong push last week to the 'secondary' Hidden Pivot (p2) of a pattern with the potential to deliver more upside over the near term to d=33.635. The initial penetration of p=30.590 was hesitant, but once the futures got past the resistance they never looked back.  Assuming silver plays hard-to-get, be ready to buy a pullback to p=30.590 'mechanically'. Your bid at that price would take a stop-loss at 29.575, so a 'camouflage' trigger of lesser degree is suggested.  An easy and decisive move through d would portend more upside to 36,769, or even 39.844.