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-- Posted 6 May, 2010 | | Discuss This Article - Comments:
Source: SilverSeek.com
Rick’s Picks Thursday, May 6, 2010 “Phenomenally accurate forecasts” Silver quotes have come back down to earth with a thud, so perhaps it’s time to review our outlook, which was, and still is, quite bullish for both the intermediate and long-term. The Comex July contract has shed a hefty 10 percent of its value since Tuesday, settling at 17.51 yesterday after peaking just two days earlier at 18.89. Although this has caused some gnashing of teeth and sporadic expressions of anguish in the Rick’s Picks chat room, long-term bullion players who frequent the room seem to be taking the move in stride. We ourselves sounded an especially bullish note a week ago when we wrote that it would be a “piece of cake” for Comex silver futures to push above some daunting reservoirs of supply on the intraday charts. The June contract duly obliged shortly thereafter, but as you can see in the May futures chart below, the rally left one key high at 18.91 recorded in January undisturbed. Although climactic buying missed exceeding that peak by just 2.5 cents, it was enough to make any selloff that followed a possible threat to the short-term picture.
That threat was “actualized,” as they say, by this week’s steep selloff, but it remains to be seen how much more damage will be done. So far, it is minimal, and we therefore still expect the futures to hit a very bullish 21.53 by mid-June. That is our target for the July contract, and it was mentioned in last week’s commentary along with a secondary target at 20.21. At what point would our outlook turn intermediate-to-long-term bearish? That would take a print below 13.89 (!), since, according to the rules of our proprietary Hidden Pivot trading system, that’s what is required to turn the weekly chart bearish. With respect to the daily chart, the July futures need only dip below 16.590 by Friday to hint of serious trouble. That’s hardly unlikely, but even if it were to occur we would give the long-term bullish trend the benefit of the doubt until such time as the weekly chart confirms the negative. Six Weeks of Purgatory In the meantime, we’ll view the futures as being in purgatory, tasked with consolidating for the expected push within six weeks or less to 21.53. Our position in silver at the moment consists of 800 shares of Silver Wheaton stock with a cost basis of 11.75. We have been doing covered writes against the stock to further reduce its cost basis and, in line with this strategy, are short eight May 18 calls for 0.64. If you’d like to tune in to Rick’s Picks daily analysis and predictions, you can sign up for my newsletter and receive one of my forecasts free each day; or consider taking a risk-free trial of the full service, which includes all of my forecasts and access to my chat room. *** Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted 6 May, 2010 | | Discuss This Article - Comments:
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