We should like to see each new rally leg exceed at least two prior peaks, since, from a Hidden Pivot perspective, that is what refreshes and revitalizes the bullish trend. However, the Gold Bugs Index failed to do this in mid-February and is paying the price. Notice how the 327.84 high on February 17 fell just shy of a minor high at 330.50 recorded in October. This was a warning sign that was to become increasingly shrill since, but we’ll be better able to judge its seriousness if and when HUI interacts with a Hidden Pivot at 249.04, our minimum downside objective for now. Its sibling midpoint at 272.81 has already been breached, implying that the target itself will be achieved. Please note that a pop to 296.60 over the next week or so would annul the bearish decree, since it would create a robustly bullish impulse leg on the hourly chart. _______ UDPATE: HUI moved higher with bullion today. So that we can be confident the rally is the real McCoy, let’s set the bar at 301.40, since a print at that price would turn the hourly chart decisively bullish.

If the futures take a decisive turn higher now without having achieved the 675.50 downside target I’ve drum-rolled, it could imply the onset of a bull cycle lasting for 3-4 weeks or even longer. The word “decisive” in this context can be empirically determined, and we shall attempt to do so by stipulating the following: an unbroken thrust surpassing two prior peaks on the 180-minute chart will fill the bill. For perspective, and most immediately, that would take a pop to 751.00 over the next 2-3 days. _______ UPDATE: The futures sagged, wiping out the previous day’s spurious gains. However, with an hour remaining in the session, they’d gone no lower than 680.50. The target at 675.50 remains both viable, important — and buy-able — nonetheless. If this trade triggers in the final minutes, as it well may, I wouldn’t take it overnight unless you are prepared to use a 673.75 stop-loss in after-hours trading. _______ FURTHER UPDATE: As anticipated, the futures made their low in the final minutes of the session. Some of you may have taken the trade; however, officially we did not, since the actual bottom was at 676.25 — three presumably front-run ticks above my target. Thirty minutes into after-hours trading, the little sonoabitch had run up as high as 686.75. Take partial profits if you hold more than one contract, but don’t be chintzy on the trailing stop, since this rally has home-run potential and could be wicked.

A print at 930.10 today would begin to turn things around, but if the futures remain weak instead, the target at 889.50 given here earlier will remain a lodestone. You can bottom-fish there, but not aggressively, since, as mentioned here yesterday, it roughly coincides with some visually obvious lows recorded in February. _______ UPDATE: After stalling for a few hours, the futures finally broke through 930.10 late in the day and headed toward a target at 942.70. Crucial resistance will come at 932.50, the Hidden Pivot midpoint, but if it’s decisively breached we could infer that 942.70 is likely to be achieved on this trip up.

TBT met our trade criterion, pulling back to 46.25, but it has so far failed to gain loft after tripping an entry signal at 47.43 that we let go by. Rather than buying at that price and applying a big, rules-based stop-loss at 46.24, we’ll attempt to limit our risk considerably by getting long at the ‘d’ target of the pullback from yesterday’s highs (see chart). It lies at 47.31, which is three cents beneath yesterday’s low. Bid for 200 shares, stop 47.16. _______ UPDATE: TBT opened on a huge gap down after trading no lower than 47.36 overnight. We were shut out of the trade, fortunately, but it remains to be seen whether the promising bullish impulse leg created with the 48.71 high achieved on February 27 will realize its potential above 50. Alternatively, it would take a breach of the 43.02 low made a month earlier to imply that the bull begun with 2009 is dead.