Welcome back everybody. We hope your weekend was a good one, but if not, you'll get another - and better - shot at a great weekend in just a few days. The calendar has cued up the 4th of July holiday for Thursday. Not only does this mean the market will be closed that day, but it also means Friday's apt to be very uneventful as traders stretch the holiday into a very long weekend. We'll be publishing the newsletter for you all the same on Friday, however, and given how it's the first weekday before earnings season begins, you might want to make a point of checking it out. We'll also have a Q2 earnings preview for you by then. We'll cross that bridge when we come to it. We've got some other business we absolutely have to take care of today, including a look at today's surprising (to me anyway) action for the market. But, there's something even more important we need to take care of first. Trade Updates Well folks, I really, really hope you read all the way to the end of Thursday's newsletter. That's when I called the bottom in gold and silver [the day they both made another sizable plunge], and said both were buy-worthy. I didn't get a chance to show or tell you exactly why at the time, but I think it's worth explaining in detail now. You may recall in Wednesday's newsletter I pointed out the technical importance of $18.00 per ounce of silver, and why $1190 per ounce was such a big deal for gold. I don't want to rehash the whole thing. I'll just refer you back to Wednesday's newsletter for the theory and the pictures. I want to update those charts for you today. It'll become clear why we went bullish when we did. Here's the silver chart. It never hit $18.00 per ounce. The lowest it ever got was $18.50, on Friday. But, based on Wednesday's dip and Thursday's fading bearish effort, I just had a feeling the sellers had done all the damage they could do to the commodity. Sure enough, silver opened at $18.67 per ounce on Friday (the earliest you could have stepped into it based on my call), and it made its way up to nearly $19.80 per ounce today. The move puts silver back above the key $19.37 level, and with several gaps left to fill in, I still think the rebound's just getting started. The proverbial 'big gun' is still gold, but silver and gold are in the same boat. Take a look. Remember, $1190 was the biggie for gold. Care to guess what Thursday's low was? It was $1196, which was actually enough 'down' for me considering it was the result of a bottom-making 1.9% dip. But, just for good measure, gold hit a low of $1179 per ounce on Friday before gaining 2.8%. It was a textbook head-fake reversal right at a key line in the sand, and today's bullish follow-through seals the deal. For the record, I'm certain there will still be some down days en route to higher prices. Just don't mistake them for a renewal of the downtrend. We'll be keeping tabs on both of these charts, and report any significant changes. Since we're on the topic of trading ideas, the one semi-random ticker we threw out to you on Friday is off to a great start. We deemed Northwest Pipe (NWPX) was buy-worthy in the newsletter from the 28th, but would be particularly enticing if it could just push through the ceiling at $28.50. Like clockwork, Northwest Pipe flew past that resistance today, in spades. NWPX reached a high of $29.36 on Monday, with no hesitation. I've got a sneaking suspicion that little nudge got the bigger ball rolling. No news. It was just time for it to happen. It's not too late to wade in though. Just wanted to keep you up to date on a can of worms we opened. While we went bullish on gold in general, I know we didn't offer up any specific ways of trading it. You can always dive into the SPDR Gold Trust ETF (GLD), but honestly, as over-traded as it is and as inefficient as it's been of late, that ETF may well be one of the worst ways to actually get into a gold-based position. You know who cued up a much smarter way to play gold (also on Thursday afternoon)? The guys over at the SmallCap Network Elite Opportunity. I can't tell you how they took on a gold-based trade, but I can tell you it makes a lot more sense than taking a swing on GLD. The SCN EO trade is already up quite a bit, but knowing what I know about the - and what's going on with gold right now - there's still plenty of room to get on board. You can find out what their pick is too, for free. Just get yourself a two-week trial to the SmallCap Network Elite Opportunity newsletter. That may not be long enough to get the official exit alert, but you'll at least get the pick early on in its useful life span. You'll also get their rationale for the pick. Here's how. Or, copy and paste the following link in your browser: http://www.smallcapnetwork.com/?vmpd_ckstr[click_track]=SCN+Newsletter&vmpd_ckstr_redirect=/pages/SCNEO/v1/ Whoops Well, I don't mind telling you I was a little surprised to see the market's major indices move above their 50-day moving average lines today. I'm not surprised, however, they fell back under them before the close, with the bulls giving up before they could get anything going. It jives with my personal theory that (1) there aren't actually a lot of convinced buyers out there right now, and (2) that we've yet to hit the ultimate bottom. Just to set the tone, the market may have closed with a small gain on Monday, but the shape of the bar screams downside reversal. Have I ever explained the importance of a hammer-shaped bar to you? I think I have, but just in case I haven't, here's the deal: Bars that have the same basic shape as a hammer (or more accurately, a mallet) that occur after decent moves generally mark a reversal of that trend. The theory is, the shape of the bar marks the last efforts of the buyers, and the beginning of the selling efforts; the transition is happening on an intraday basis. Anyway, today's bar for the S&P 500 - as well as for all the other indices - was a hammer-shaped bar after last week's rally. All it took was a brush of the 50-day moving average line to kick-start the pullback. This is all fairly typical action. While it's certainly possible the market could rally again tomorrow and actually get and keep the rally going, the odds don't point in that direction. A lower close and/or a lower low tomorrow should renew the bigger downtrend that started in late May. Let's check in again on Tuesday.