Here's an unpopular point of view that surfaced yesterday in the Rick's Picks chat room: 'Gold is at the top of a parallel trend channel started from the rally off the 1999 low. The sentiment index is at 95% bulls. The handful of times where the sentiment index has pushed this high over the past decade have all resulted in a market correction, sometimes a sharp one. The fact that even the financial media is saying $1000/oz gold is a no-brainer makes my contrarian bone ache even more. Good luck out there, I'll wait for the pull back.' (Click on chart to enlarge) Now, there's no denying that $1,000 gold has become something of a no-brainer among us professional bloviators. But does that mean we should back away from it in anticipation of a punitive correction? We think not, and here's why. For starters, over the last month or so, Comex Gold contracts have been blowing past major and minor Hidden Pivots as though they were chopped liver. Yesterday, for instance, there were two nasty-looking ones at, respectively, 902.10 and 909.00 that should have stopped bulls cold. Instead, when the dust settled, all-but-insatiable buyers had dispensed with both of these obstacles before New York traders even got out of bed. No Warning Yet We'd gone on record earlier with a prediction that the Comex February contract would be on its way to at least 973.90 if it closed above 909.00 for two consecutive days. We'll stick with that forecast. Although the futures failed to achieve our benchmark yesterday after pushing as high as 915.90 overnight, we were still impressed with the ease with which the lesser pivot at 902.10 was demolished. Bullish sentiment aside, we have no trepidation whatsoever about going with the flow, since, the moment Gold turns weak,
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