Thursday, October 1, 2009

The nearest Hidden Pivot above lies at 16.750. It can serve as a minimum upside objective for the very near term, but any higher would be a bullish sign going forward.

The rally off last Frida'ys low projects to 427.15, but HUI will have to do somewhat better than that, hitting 436 today, to set bears a-scrambling.

If the futures can close above a _____ midpoint resistance, they presumably would be bound for a minimum 1086.00, its 'D' sibling. They are showing surprising timidity, however, and so a downside target at 1025.75 must be given equal weighting. The midpoint support corresponding to that number is ____, so a close beneath it, or a decisive penetration intraday, would hint of more weakness to come. Actually, yesterday's low at 1041.50 was probably decisive enough to imply the futures are already bound for _____. That last number can be bottom-fished with a stop-loss as tight as two ticks, but don't do the trade unless there is enough time remaining in the session to exit it.

On a wrenching day, gold managed nonetheless to shinny two-thirds of the way up the flagpole created by last Thursday's dive. In the process, the December contract settled just above the 1006.80 midpoint resistance shown in the chart. This portends more upside to its 'D' sibling, _____, but I don't trust that target so thoroughly that I'd simply buy here with a 7-point stop-loss.  Better to use camouflage, which can be found in a look-to-the-left peak at 1011.90 that on the hourly chart is not really a peak at all. The assumption is that if you zoom in on the "knob" with a 5-minute chart, you'll find a look-to-the-left peak there, just waiting to be used.

(Gold lurched back into bullish gear yesterday, lifting the spirits of those who may have read too much into last week’s apparently gratutious decline. Before lapsing into despair whenever gold corrrects, as it is bound to do from time to time, we should consider the big picture and ask, Is this the way a top would look?  Here are some of the signs we might expect to accompany a real top in bullion, courtesy of our friend Chuck Cohen. ) No sane gold bug, if there really is one, would dare to pinpoint an ultimate top both in distance and price in gold, but I believe that when it approaches, there will be definite signs to the discerning and pure of heart. The following are some of the signposts I envision as we near the great, final high. They are listed in no order of significance or chronology. Things to look for when gold is making its ultimate top: • Bill Murphy, minus any censoring, is a regular guest on CNBC • Barron's has an issue with two articles on gold • Abbe Joseph Cohen turns bearish and announces that 50% of her money is now in gold-related assets • A CNBC host is heard recommending gold • The New York Times runs a major front page headline highlighting the price of gold and its price chart • Jim Sinclair is chosen "Man of the Year" by Time magazine • Gold is the lead item on the national news every night for a week • Wal-Mart announces they will begin to sell tiny amounts of gold • Jon Nadler starts a fashion craze wearing gold lamé suits, and, in an announcement that shocks the financial world, reveals that he is starting a round-the-clock precious metals channel. Another coup is that Dennis Gartman and Leonard Kaplan will be his featured analysts.

If our favorite market bellwether is to point the way higher for the broad indices, the current weakness should go no lower than ____, a midpoint support tied to a 'd' target at _____.  A bullish reversal and final top above $190 would still be possible on a pullback to _____, but that would strongly suggest that the rally would be Goldman's last gasp.