Silver

Shortly after midnight EDT, April Gold was tracing out a modest but promising bullish impulse leg on the  30-minute chart.  I've shown this in the chart accompanying today's GCJ12 tout, since it could yield 'gold' for night owls.  There are a couple of caveats, however, including the fact that May Silver has failed so far to generate a similarly bullish signal.

Last Wednesday's decisive breach of a 31.950 'D' target implies that a lower one at 31.230 is now in play, and thence an even more important one at 29.355 noted here earlier. The short-entry trigger (aka 'X') associated with that last downside Hidden Pivot lies not far above, at 33.170, and is therefore a logical place to try to get short, albeit belatedly. The trade, if it comes, should be attempted only via camouflage.  Alternatively, bulls would need to hit 33.285 today to show a pulse.

We bought the E-Mini S&P futures during this session, so it could be an especially illuminating one if you want to see a ‘camouflage’ trading opportunity rationalized in real time. There are also some finely nuanced observations concerning certain uses of the k-A segment. Issues covered include the E-Mini S&P, gold and silver futures and the Dollar Index.

I've set some ambitious benchmarks for gold and silver today for those of you who are wondering what it would take to put bulls back on the offensive. There's also a short recommendation in the E-Mini S&Ps that would effectively reverse the long position we took home overnight on Thursday.

A Hidden Pivot at 31.230 remains our minimum downside objective, and it would take nothing less than a surge above 34.380 to turn the intermediate-term outlook back to bullish. Moreover, a two-day closed beneath 31.230 would put into play the 29.355 target noted here yesterday.  Look on the somewhat bright side, yesterday's thrust was weakly impulsive on the hourly chart -- "weakly" because it surpassed no true 'external' highs -- and projects to 33.390 via a 32.910 midpoint resistance that lies just two ticks above yesterday's high. From our Hidden Pivot perspective, the most bullish thing that could happen today would be an unpaused thrust that exceeds external peaks #1 and #2.

As implied her yesterday, a Hidden Pivot at 31.230 is now our minimum downside objective, and it would take nothing less than an explosive move exceeding 34.380 to the upside to annul that decree. Bottom-fishing is recommended to anyone who can hold risk to $70 or less per contract, presumably via camouflage, but my hunch is that there will be a tradable bounce from within no more than 2.5 cents of the target. You should be aware in any case that a two-day closed beneath 31.230 would put into play the 29.355 target of the pattern shown.  Notice that, unlike the larger downtrending A-B pattern shown in today's charts for April Gold, this one's A-B leg is the real deal -- i.e., not sausage because it exceeded the 32.715 'external' low recorded on February 16.  Indeed, it is because Silver's chart is so clear in this respect that I have given my worst-case forecast for gold the benefit of the small doubt.

Gold and Silver have recovered modestly after being down earlier Wednesday night, but the bounce has been too feeble so far to imply that bulls will have an easy time of it. For night owls, the first camouflage opportunity available in April Gold would come on a b-c pullback from just above 1652.80. You'll need to call up a 60-minute chart to see this.

A U.S. banking system that is being held aloft solely by hot air and brazen lies took an ebullient leap toward November 6 yesterday with the release of an Administration-friendly Fed report declaring most banks sufficiently capitalized to weather severe adversity.  How severe? It’s hard to tell, since there were only passing references in the New York Times to a still-deflating housing market that has helped make The Great Recession and a plummeting standard of living an entrenched fact of life for most Americans, if not for their bankers. And nowhere in the front-page article was there even a word about the Fed’s warehousing of trillions of dollars’ worth of mortgage paper once held by the banks – debt paper that might never recover in value.  Under the circumstances, far from being healthy as the Fed and its shadowy masters would have us believe, the banks are afflicted with the financial equivalent of stage four cancer. Not that anyone on the Street would care to notice. In fact, with this week’s big stock market gains, Wall Street seems to be literally banking on the ability of the spinmeisters to hide the financial system’s deathly pallor with the skill of Sonny Corleone’s mortician. In the meantime, many on the Street, and even a contributor or two in the Rick’s Picks forum, were seeing cloudless skies at least till the election. “Money is going to be pouring into the stock market at the expense of other investments,” noted one forum regular, Gary L. “I now see the possibility of a 20 percent rise in the stock market year over year,” he continued. “If external factors don’t derail this trend, we are in a perfect sunny day lasting perhaps another nine months. This will make Obama’s chances of winning re-election an odds on

The bearish target at 31.230 (see inset) will become our minimum downside objective if and when its p sibling at 32.835 fails as support.  The latter number will nonetheless be an appealing place for aggressive bottom-fishing, provided traders can limit entry risk per contract to no more than $70  theoretical.