SIZ11

The bullish pattern in December Gold that I pronounced "good enough for government work" is evident in this vehicle as well and projects to 35.870, a Hidden Pivot resistance. For trading purposes, we can start with the impulse leg at the right-hand edge of the chart. It has achieved impulsive status in night trading, exceeding a key peak at 33.585 recorded on September 27. My gut feeling is that the first point 'C' will be stopped out in the manner shown, so caution is advised if you are using "camouflage" to get aboard.

Close, but no cigar. Like December Gold, silver futures narrowly failed to generate a robust bullish impulse leg on the intraday charts by exceeding a prior peak -- in this case, one at 32.150. If they should do so now, it would be less supportive of the bullish argument than if buyers had managed this feat on the first try. If weakness re-emerges, the first place where we could look for a bullish reversal would be at 30.930, the midpoint Hidden Pivot of the pattern shown.

A small "external" peak at 32.150 remains the number to beat, since that would generate a promising new impulse leg on the hourly chart. The futures got a running start on this task early Sunday night, but buying sputtered out somewhat shy of a 32.005 target. If the weakness persists, the first place you could look for a bullish turn -- and a potential 'camo' buying opportunity -- would be at 30.610, the 'p' midpoint support of the pattern shown.

Silver is lagging gold tonight, unable thus far to generate a bullish impulse leg on the hourly chart. Because the futures have been meandering for a month, we should set an ambitious benchmark for turning bullish on the short-term picture. Specifically, let's stipulate that the futures must exceed the small external peak at 32.150 shown in the chart before we dive in. If they do so without ruffling the 32.355 high made a day earlier, so much the better, since that would create a very enticing camouflage pattern on an intraday chart of higher degree.  Any pullback thereafter should be used to time-stop your way aboard at the given point 'X'.  My hunch is that, from the time point 'C' is created, you would not have more than about 60-90 seconds to pull the trigger.  The scenario is sketched out hypothetically in the chart.

The 240-minute chart shows Silver from the same, sobering perspective as the chart accompanying today's gold tout. Notice, however, that there is no middling point 'A' here, only the one all the way up at 40.780.  It implies that the gentlest climax we could hope for to the month-long correction would be down at 26.27, the midpoint pivot of the pattern shown. The 'D' target with which it is associated is a hair-raising 18.955, but we needn't be overly concerned unless the midpoint gets smashed.

Caterwauling its way to nowhere, December Silver was mildly impulsive at the bell yesterday, then fully corrected by midnight. From the so-far overnight low at 31.760, it would take a 50-cent thrust to create the theoretical entry point for a pattern with the potential to reach 33.745. Night owls should continue to monitor the corrective b-c, and zoom down to the 5-minute chart for 'camouflage' if it gives way to an upthrust that engenders an 'x' entry point. I've sketched this out for your further guidance in the accompanying chart.

The over-under thresholds can stand as drawn here yesterday (see 10/17 archive posting for chart and details), but more immediately, we might focus on the corrective pattern shown, since it has the potential to drop a low-risk "buy" into our lap. That would occur at the 30.785 Hidden Pivot support shown. 'Camouflage' will be essential here, though, since the target is closely coincident with a structural support at 30.710 from October 7 that is all but certain to draw the rabble. _______ UPDATE (9:16 a.m. EDT): December Silver got whacked well beyond our target, creating a quite-bearish impulse leg on the hourly chart in the process. The so-far 73-cent bounce must be presumed to be setting up a D-C follow-through leg to the downside, but bulls would earn the benefit of the doubt if they can turn this disconcerting price action into "dueling" impulse legs with an upthrust, by tomorrow, that exceeds a micro-peak 31.725.

Higher or  lower, the direction of the next, probably meaningless, feint is a coin-toss right now, so there's no point in getting all het up about the supposedly bullish or bearish pattern you may have detected with your magnifying glasss trained on the 5-minute chart.  Like the chart I've reproduced with today's Gold tout, the one for December Silver (see inset) shows where to set alerts that can tell us when to get excited.  Incidentally, the pattern that produced the lower alert is findable on the 60m chart, where A=36.680 on  9/22.

Silver has moved down and away from its rebound high of 33.585, cancelling Wednesday's impulsive bullishness and leaving us with a trendless picture.  The silver bears defended their "goal line" of 33.585 yesterday, pushing the price back down to, what, the fifteen yard-line?  After surpassing a whole collection of prior highs on Wednesday, silver turned around and wiped out the "C" point and both of the "A" points that we were watching.  That move down might emerge as an impulse wave that we can use, but we'll have to watch for a "C" point to emerge, and then we'll have to choose from among several "A" candidates.  So what is there to say?  We should continue to respect the magnetism of the rebound high of 33.585.  Somehow a breach of that level almost seems necessary before we get the follow-through to the downside that our method tells us is probably coming.  (Posted by Doug "harry" McLagan)