Comex Gold has taken some wicked turns in recent days, none more promising than Tuesday’s 1705.70 low. We were looking to buy near there ourselves using a technically derived bid at 1702.60. However, when the futures trampolined from a low that lay $3 above our bid, we came up empty-handed. Even so, from a technical standpoint the price action was encouraging, since we regard any trend up or down that fails to reach its “Hidden Pivot” target as the last gasp of that trend. In this case, under the rules of our proprietary forecasting and trading method, 1702.60 became the calculated ‘p’ midpoint support of the ABC pattern shown. Although we expected a very precise hit because the pattern itself was so clear and compelling, the fact that bears were unable to push the futures down to the target suggests they are tiring.
But not quite down for the count. Before we assume this to be true, we require that the current rally create a bullish “impulse leg” on the hourly chart and continue to its ‘D’ target. That means the futures will need to hit 1754.80 today, nearly $8 above yesterday’s high, to give bears reason to be nervous. As traders, however, we’ll be looking to jump on the February contract Wednesday night or Thursday on any rally that pokes above 1751.30, since that would generate a fresh “impulse leg” for February Gold on the hourly chart. Under this scenario, the ideal trade entry would come following a pullback from a tick or two above 1751.30. Any higher would make the breakout too obvious to too many, creating a traffic jam for bulls. The specific technique we use to leverage very subtle breakouts is called “camouflage.” If you’d like to know more about this method, which can help reduce the risk and stress of trading, click here for information about the upcoming Hidden Pivot Webinar.
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