Silver

Although yesterday’s Congressional testimony by “Helicopter Ben” Bernanke was fundamentally meaningless, it caused gold and silver prices to take a spectacular dive. They got hit after the ‘Nank, prevaricating as usual, said the central bank wasn’t rushing to crank up a QE3 stimulus.  While this may be true as far as it goes, it belies the fact that the money spigots have been wide open for years and will remain so, probably, until the financial system collapses. More on that below.  Concerning the savaging that precious metals received, they are all but certain to recover, since the forces that have been driving them steeply higher for more than a decade are still very much in place. Even so, it could take at least a few weeks for gold to build a new base for a shot at $2000, and silver for a push into the mid-$40s. In the throes of yesterday’s brutal, deftly engineered shakeout, Comex gold dropped $104, or nearly six percent, in just a few hours. The April contract hit an intraday low of $1688 after trading as high as $1793 the day before. As for Silver futures, they suffered their worst single-day loss since September, falling $3.76, or 10 percent, from intraday high to low. Mining stocks fell in sympathy, lopping three percent from the value of the Gold Bugs Index (HUI) and five percent from GDX, an index that tracks the shares of junior miners. Although Silver futures fell harder than gold in percentages terms, the technical damage was worse in the latter. Notice in the chart above that April Gold’s plunge exceeded two prior lows on the daily chart. This created a bearish “impulse leg” of daily-chart degree, according to our proprietary Hidden Pivot Method of analysis, and it is the worst such damage we’ve

Yesterday's action in April Gold was most encouraging, since the vicious pullback engineered late in the session by DaSleazeballs reversed from almost the exact midpoint pivot of a larger, bullish pattern projecting to 1801.40.  Pay close heed to today's Silver tout, however, since the May contract is nearing a potentially important rally target.

Silver looks beautiful, having leveraged the consolidation pattern noted here yesterday to launch a mini moon-shot. Beware of a possible stall at 37.760, however, since that is the clear Hidden Pivot target of the pattern shown. There's no telling how bulls will handle this resistance point, but the reaction could be brutal.  If, on the other hand, they simply blow past it, $40+  should not be long in coming.

Stocks are creeping into the red zone, according to our proprietary technical indicators. A possible end to the Mother of All Bear Rallies begun three years ago? Perhaps. But rather than guess about such things, we’ll let the charts tell us what we need to know.  We don’t have a crystal ball, after all, but we’ve learned that the stock market cannot change directions in any significant way without telegraphing the turn on the lesser, intraday charts. This they did back in January, when a pullback to a key ‘hidden” support signaled the big rally that was to follow. Specifically, using Hidden Pivot Analysis, we were able to tell subscribers to expect a Dow rally of at least 600 points, to a minimum 13085. At the time, we were bearish as all hell on the real world.  However, and as all traders come to understand, the stock market is unconnected to the events of the real world. Under the circumstances, trying to predict its ups and downs on the basis of the  headlines is futile.  Nonetheless, bearish as all hell, fearful of war in the Middle East and ever mindful of the economy’s fitful descent into Depression, we wrote the following in a Rick’s Picks “trading tout” disseminated to subscribers on January 18: “Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown [see above]. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to

A boring day on Wall Street has left index futures and other round-the-clock trading vehicles dangling in the wind. Today's touts emphasize bullish prospects nonetheless, since gold, silver and shares all look poised to move higher.

This weekend, Rick was a guest on The Korelin Economic report. Rick and Al Koreling discussed gold, silver and junior mining issues. The link can be found here. Rick's is segment #3.

Friday's highs somewhat exceeded the 35.635 target we'd been using, which is bullish.  More bullish still is the fact that price action since appears to be a consolidation above the wraith-like supply zone highlighted in the accompanying chart. It is the last distinctive pocket of supply between current levels and the low $40s, and because it has already been penetrated impulsively, bulls now should be viewed as owning the intermediate-term (i.e., four to six weeks) outlook.

Silver buyers should be spent for at least a day or two, but if not, there could be a low-risk opportunity to get on board using Hidden Pivot midpoint supports and 'D' targets of minor retracements. I've sketched out two such possibilities in the chart that accompanies today's tout for April Silver, and I'd encourage night owls in particular who are looking for action to check them out.

Following yesterday's powerful rally to within two-and-a-half cents of our target (35.635), the futures have pulled back, although not by much. Now, the sooner bulls are able to push this vehicle through the target, the more buying power we should infer remains to be spent. Crude oil's explosive rally is a wild card here, since it has been driving bullion prices higher.  Camouflageurs and night owls looking for a way in should focus on the p and D Hidden Pivot supports of minor retracements such as the two shown in the chart.