Tutorials

Gold and Silver have been in such steep rallies that they are about to exhaust the supply of ‘D’ targets on their respective daily charts. This means we’ll soon have to use weekly charts to project new targets, and to adjust our calculations so that they reflect the approximation of key highs and lows that occurs over the long term on composite charts. During this session, we tackle the problem with some relatively simple solutions. We also take a close look at the yen’s lesser charts, finding technical evidence to buttress our suspicion that the U.S. dollar is about to go down for the count

We caught a beautiful bottom in the E-Mini S&Ps, using a somewhat tricky pattern to get long a single tick beneath what turned out to be the low of the day. This was done bottom fishing-style – i.e., without camouflage -- because the set-up looked so enticing. The actual trade had been advised earlier that morning during a “trading room” session attended by more than 100 people. It was an hour later, during the weekly tutorial session, that we reviewed the trade and my rationale for using a 1.00-point stop-loss. (I’d dithered over using a two-tick stop (!) but eventually decided to go for, um, broke.) We also looked at Gold and Silver as usual, finding an additional reason to take seriously a 22.505 target for the December contract that I’d been drum-rolling for weeks.

A narrow focus on bonds, gold, silver and the E-mini S&Ps produced several tradable ideas that had yet to play out when this one-hour session ended. Gold and Silver were correcting the sharp rally of the previous day, and although we found reasons to expect more corrective action, there was no evidence of a serious selloff in the offing. You should check out the scalp-short we found in Silver, since the set-up was a real beauty and hard to miss on the lesser charts.

Tedious price action is not without its value in the classroom, as we were to discover during this session. We looked at turgid charts of Gold and the E-Mini S&Ps, mainly, and although not much was happening on either at the time, we were able to project respective trends that could have tradable implications not far down the road. This session was open to customers of PFGBest, and because hundreds of them attended, there was more emphasis than usual on Hidden Pivot basics. This recording is therefore a good one for relative novices to review.

Gold and Silver bulls will get a lift from this session, since it affirms a strong technical case for both metals. The ongoing rally in Comex Silver in particular – and Silver Wheaton shares, which we also looked at – shows no sign of weakening, and it looks as though some longstanding targets above $25 in SLW are all but certain to be achieved. We also scrutinized the charts of the E-Mini S&Ps and found little reason to respect the uptrend of the last week or so. Flaccid daily and hourly charts warned us off trying to find “camouflage” for a long entry, but there were no great prospects for getting short either.

We’d had a profitable trade in Comex Gold overnight, so we took our time making useful sense of it during this session. Gold subsequently swooned on the opening, then vaulted $26 in just two hours, but there were reasons for skepticism that this robust price action was telegraphing an eventual move to new all-time highs. However, for both trading and analytical purposes, we settled on 1235.20, a crucially important and very Hidden Pivot midpoint, as the key price for the near term. The reasons are emphasized in great detail in this recording and well worth the time you might spend reviewing them. We also looked at the E-Mini S&P, which dove toward a longstanding target at 1040.25 without quite getting there. We found reasons to expect a relapse, however, perhaps providing an opportunity to bottom-fish with a stop-loss as tight as 1039.75.

Because there was a large audience on board for this morning’s session, we looked especially hard for real-time trading opportunities. Although there were no magical trades to be found in the E-Mini S&Ps, the December Gold contract turned out to be….well, a gold mine. We were able to identify one entry spot in particular that followed an important rule of camouflage trading: Trust the Force – meaning, don’t hesitate to jump on the very first northbound ABC that has followed a possible swing low. Incidentally, one person in the room said he profited on a mildly promising trade in the E-Mini that we’d identified in real time. You’ll see it in this video -- and hear our reason (though not his) for getting cold feet.

The broad averages were getting shredded on this particular morning, affording us an exceptional opportunity to examine downtrends more powerful than any we’d observed recently during these sessions. Most of the class was spent analyzing in detail the carnage in index futures, which were hell-bound in a way that made nearly every abcd downtrend “work” for Pivoteers trying to get short. In fact, a bearish target at 1085.25 that we’d identified in the E-Mini S&Ps nailed the intraday low within two ticks. All that was needed to provide low-risk entry points were periods of relative tedium lasting for perhaps 20 or so minutes, followed by subtle abc breakdowns on the 3-minute chart. Moving on to Gold’s chart, we took a finely nuanced look at what constitutes “dueling impulse legs.” Nowhere else in the tutorial library will you find so illuminating a discussion of this somewhat subjective aspect of Hidden Pivot analysis.

Gold was strong, and so we took the time to discover the evidence in the intraday charts that had predicted this. Most significantly, overnight abc retracements had failed to reach their respective midpoint supports. Were there any low-risk buying opportunities as a result? The answer is a qualified “yes,” since the best opportunities would have been signaled early in the trend, when most U.S. traders were having dinner; and in the wee hours, when they were sleeping. Following an $18 rally, about $10 worth of upside remained to a 1212.50 target, but we decided that it would take a few hours of sideways tedium to generate a good camouflage entry opportunity. We also found a logical target for Wheat’s parabolic move, and two good places to try shorting the Diamonds.