SIU10

Silver has been making steady headway, so let's set the bar high today to tell us whether there is breakaway strength percolating below the surface. Specifically, we'll monitor the "external" peak at 18.820 recorded on June 30. A  move above a lesser peak at 18.690 just to the right of it would probably do the trick, but we'll want to demand "max" performance just to be sure.  Entry for night owls has already been signaled at 18.455 (implying midpoint resistance at 18.530), so you'll be on your own in finding camouflage to board belatedly. The five-minute chart looks right for this, referencing some very small peaks made on the way down from Tuesday's high.

Silver's ostensibly sharp rally on Friday, like Gold's, looks mediocre even on the 15-minute chart.  We should want to see a push this week to at least 18.680 before we take serious encouragement, since that's where a bullish impulse leg would be generated on the lesser charts. As always, the number of prior peaks surpassed without a pause will be crucial to our assessment of strength (or weakness) in the underlying vehicle.

A Hidden Pivot target not far below, at 17.185, seems unavoidable. It is analogous to the 1140.10 target proferred here earlier for August Gold. Like that target, it can be bottom-fished with a very tight stop-loss -- in this case as tight as six ticks. ______ UPDATE (3:13 p.m. EDT):  Bullion has rallied today, going against my expectations, and so I've updated today's gold tout by noting two peaks that the August contract will need to surpass to create a bullish impulse leg of daily-chart degree.  The corresponding peaks for Silver lie, respectively, at 18.280 and 18.535.  Keep in mind that, in order to signal a trend change with the kind of unambiguous power it will take to push Silver for once and for all above $20, the rally must not break into a b-c correction once it has surpassed the lower peak.

A trendline we've looked at before will continue to have consequences. On the weekly chart, it comes in now at 17.325, so we'll use that number as a correction target for the near term. A breach by a few cents would not necessarily be fatal, but if one occurs we'll want to monitor the lesser charts closely for signs that could corroborate a serious breakdown. FYI, a Hidden Pivot at 16.830 is equivalent to the one at 1140.10 in August Gold. ______ UPDATE (10:33 a.m. EDT): Silver fell to exactly 17.325 this morning, demonstrating yet again that it, and nearly all markets these days, are being driven by purely technical considerations and traded by machines. The bounce so far has been to 17.545 -- substantial, although hardly sufficient to lift Silver from the danger zone.

Silver's intraday charts continue to look more encouraging than Gold's, although it seems likely the latter will drag the former lower rather than both heading higher on Silver's strength. If there's a bullish surprise, however, use a midpoint resistance at 18.330 as a bullish "trigger" threshold for a further move to as high as 18.680.

Silver appears to have bounced from a too-obvious place yesterday, a penny above the previous day's spike low. We'll give this evening's moderate rally the benefit of the doubt nonetheless, and infer the possibility of more upside over the near term to 17.880 -- or possibly to 17.975 if any higher. A negative offset, however, is that tonight's thrust failed by a tick to generate an impulse leg that would have provided "camouflage" for a long entry.

Two weeks of upward progress, if you could call it that, have failed to produce even a single new, bullish impulse leg on the hourly chart.  The futures therefore remain vulnerable to a fall to the trendline we've been monitoring, which comes in today at 17.375. Alternatively, it would take a thrust, merely, to 18.845 to send bears diving for cover. ______ UPDATE (1:16 p.m. EDT): Today's nasty spill actually projects lower than the trendline -- to 16.830. The midpoint support at 17.680 will offer bulls a last-ditch opportunity to turn things around, but if it's breached on a closing basis, brace for more downside to 16.830.

If we ignore yesterday's gratuitous hiccup, Silver looks poised for a more durable thrust, having exceeded the Hidden Pivot rally target shown in the chart by more than four cents yesterday.  However, the futures weren't providing any solid hand holds Wednesday night, even on the 2-minute chart. A midpoint resistance at 18.395 might work as a breakout number, but you'll need to improvise your own tactic if you want to get long.

Silver is stuck in the same rut as Gold, notwithstanding yesterday's superficially impressive 49-cent thrust.  The trendline that we've been using to project the next test of support comes in at 17.365 today, a tick higher than yesterday.