Thursday, January 26, 2012

Use the 1362.25 target shown as an incentive for getting long. The gap through the 1252.25 midpoint strongly implies the target will be reached, although camouflage will be most difficult to come by with the rally so ridiculously overextended. The chart shows how two subtle details shorten the odds of the target being achieved.

So far so good. Actually, yesterday's thrust was even more promising than it may have looked, since it cleared the external peak shown by one crucial dime. This is bullishly impulsive -- but also a possible camouflage entry set-up, since the peak failed to exceed the marquee high at 33.740 that most other traders will be focusing on.  Traders should wait for a legit B-C pullback to develop before initiating a buy-stop on a chart of (much) lesser degree.

With a decisive push past the Hidden Pivot midpoint of the pattern shown, the Gold Bugs Index appears to be easily on its way to the 548.18 target of the pattern shown. The extended move has doubtless enticed too many bulls to yield good camouflage, but traders should note nonetheless that because the spike has yet to exceed the 532.87 'external' peak from January 12, there exists the possibility of a B-C pullback on a lesser chart that would set-up a usable point 'X' entry.  This advantage will be there only if the coordinates develop quickly, so be prepared to act. ______ UPDATE: (January 29): Bulls easily achieved the target -- and now surpassed it with a so-far high at 551.36.  The move has healthy implications, since it exceeded mid-December's  549.79 peak, creating a new and bullish impulse leg on the hourly chart in the process. A legitimate B-C pullback has yet to occur, but it would need to be at least 0.618 of the k-A segment shown to recharge HUI for another leg up.

Let's use the 29.61 Hidden Pivot shown as a minimum upside objective for now.  The point 'B' of the pattern is pure sausage, so we shouldn't count on an exact hit -- just a rally target good enough for government purposes.  That implies that if 29.61 evinces no resistance whatsoever, bulls should be deemed capable of an assault on  early December's high at  30.76, a key structural resistance.  Camouflageurs should position themselves for a hair-trigger entry following a shallow B-C pullback from above the 29.09 peak recorded on December 9.  You can learn how to do this trick yourself! Click here for information about the upcoming Hidden Pivot Webinar and a $50 discount.

Yeah, yeah, I know. Yesterday's rally felt absolutely fabulous! Color me slightly skeptical, though -- skeptical enough that I'm going to continue to take this uptrend's vital signs each and every step of the way. Which means that we cannot ignore the fact that the $65 reversal failed to surpass even a single 'external' peak on the hourly chart (see inset). Bulls could easily remedy that today with a print at 1728.00, but let's not jump the gun. Camouflageurs will likely find themselves in the midst of a riot this morning, so I won't even pretend to offer you an easy way in. However, you'll have a 1741.70 target to shoot for, subject to confirmation by, and possible resistance at, 1717.70, the midpoint pivot associated with the target. My hunch is that the first impulsive ABC pattern that takes out Wednesday night's 1714.20 so-far high will produce a winning trade. _______ UPDATE (11:06 a.m. EST): And it did: with ABC coordinates on the 10-minute chart at, respectively, 1703.70 (4:30 a.m.), 1719.80 and 1713.20. Entry was triggered around 6 a.m. at 1717.30; then partial profit-taking on half the position at=1721.30, and a second round of profit-taking at 1729.30 (aka 'D').  For your further  guidance, I'll track a single, remaining contract from an initial buy of four. It's effective cost basis, reduced by paper profits taken so far, would be 1701.30. For now, used a fixed stop-loss at 1713.10, since a print there would turn the lesser charts impulsively bearish.