We gave an all-clear signal for April Gold yesterday, only to see the futures reverse direction and go into a kamikaze dive after having touched a bullish tripwire the previous day. The tripwire was in fact a Hidden Pivot rally target at 676.80, and a short-term top there had been predicted when the futures were trading $14 lower. Sure enough, on Valentine's Day, the April contract came within two ticks of our target, touching $676.60. This gave us reason to expect a pause for a few days, then a bullish lunge toward an even more important Hidden Pivot obstacle -- a pair of them, actually, at, respectively, 680.60 and 682.00. We thought this thrust was under way on Monday when the futures popped to 677.80, a dollar above the original target. However, it proved to have been a false alarm when the April futures went into a steep dive yesterday. So how bad was the damage? To answer that question, we've reproduced a chart above that helped us to anticipate the rally to 676.60. I've labeled the two prior lows that the current decline would need to surpass in order to create a bearish impulse-leg of daily-chart degree. Specifically, the decline would need to breach the lower of the two lows, 646.60, by at least a single tick. Moreover, this would have to occur without an intervening rally lasting more than a single day. Bottom line: Yesterday's selloff fell well shy of creating a significant bearish impulse leg. Also, the fact that it came from within $1 of a projected top is all the more reason to infer that we are witnessing a correction rather than end of the bull cycle that has dominated since October. And even a fall to $630 would not be worrisome as long as there
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