Tutorials

The emphasis during this session was on spotting camouflage opportunities and steering clear of traps in real-time charts for Gold, Silver, Corn and the E-Mini S&Ps. Although it will nearly always be possible to force a long or short trade in some time frame, we can reduce stress and effort by initiating trades only when they are based on impulse legs that conform strictly to our rules. In particular, we should expect to find the best – and easiest – trades at swing highs and lows that have been signaled on charts of higher degree. In all instances, finding the first such signal amidst the panic, fear and uncertainty of others will afford the most trouble-free path to success.

Because the day’s touts had anticipated explosive moves in Silver and Gold that were in fact occurring, we took extra time to scrutinize the charts of both. Silver in particular was on a rampage, having exceeded the extremely bullish target I’d provided by five cents. Owing to the “chopped liver rule,” this had bullish implications going forward, and we explored several ways in which they might be tradable. To round out the session, we also pondered gold and the E-Mini S&Ps. The latter was in the throes of a 17.00-point surge that missed a touted target at 1328.75 by a single point.

Bullion’s retracement from the May 2 peak has now dragged on for more than two months, providing not only the usual tedium of bull market corrections, but also some lows that may have evoked despair in more than a few investors. It is at such times that we should put aside “feelings,” and focus solely on our mechanical indicators, since they have yet to signal any real trouble -- only the kind that is intended to shake loose the timid and the impatient. It is with the foregoing in mind that this session focused intensively on Comex Gold and Silver futures in the throes of their first promising rally in a while.

The k-A segment – bane of the Hidden Pivot novice but ultimately of little concern in most trading or forecasting – gets a workout in this session, since we stumbled on several instances in which the “window calculation” was not only useful but necessary. There is also a segment delving into the failure of gold and silver to generate bullish impulse legs on the lesser charts since the correction began from early May’s highs.

We spent much of this session belaboring the soon-to-be-mistaken notion that the broad averages were headed higher. In fact, stocks were bound for collapse the next day, notwithstanding the fact that the E-Mini S&Ps had generated a very powerful bullish impulse leg a day earlier. The lesson here is that it’s okay to trust your gut feelings, but always to verify them by monitoring impulse legs on the lesser charts. In this case, a signal to get short was triggered on the 5-minute chart just five points off the high of a very nasty selloff. Not all went awry for us, incidentally. The reiteration of a bearish call on crude, for one, in the face of a sharp rally was borne out by a plunge in prices the next day.

Although we’ve turned up numerous instances where ‘k-A’ measurements were needed or even required, rarely in the course of these weekly tutorials have we discussed such subtleties as we found this morning trying to trade a downtrending E-Mini S&P. And speaking of subtleties, looking at Gold’s chart, we considered some subjective concepts related to the impulse leg, discovering in the process that making Hidden Pivots work sometimes requires a little artistry.

There were some near-bullseyes in the day’s touts, and so we looked closely at the patterns that had produced them: in the E-Mini S&P, Gold and Silver. A prediction earlier in the week of more tedium was holding, and although bullion futures were having their tradable ups and downs, there was little net movement to suggest a trend. We also found reason for extreme caution if Comex Gold should spike to a marginal new record high, since, for reasons of a long-term Hidden Pivot target, it has the potential to be the Mother of All Bull Traps.

Stocks were in a broad retreat as this session began, with the Dow down more than 200 points. This made for an especially interesting lesson that was entertaining as well. The selloff follows a week in which shares had trended strongly higher, but with a peak the day before that had failed by a small margin to generate a fresh, bullish impulse leg on the daily chart. Silver and Gold were moving in opposite directions, but there was Hidden Pivot evidence the latter would prove strong enough to drag the former higher over the next few days.

After falling more than 55 points, the E-Mini S&Ps were bouncing off a correction low we'd predicted within a single point. But where to get long? In fact, there were numerous camouflage opportunities, and we found them by zooming in on the lesser chats. We did the same in Gold, which was oscillating near a crucial midpoint resistance whose breach would imply the onset of a 60-point breakout. We also took a close look at Silver, which, unlike Gold, was forging boldly higher without pausing for breath.