Thursday, December 12, 2013

We'll grudgingly give bulls the benefit of the doubt for now, since the pullback from Tuesday's high looks like a classical consolidation. However, there is no getting around the fact that bulls lacked the cojones to push past the external peak at 1268.00 (see inset) on the first try.  This display of timidity is almost certain to have implications going forward, but at the very least it suggests that gold's true believers lack the energy or the conviction to end a bear market that is now in its third year. The futures remain a bull trade at the moment nonetheless, and traders should look to do their buying on a pullback from just above 1253.50.  That's equal to a small peak made near the end of Wednesday's session that's easily visible on the 5-minute chart. The relevant point 'A' low would be 1252.00 (6:25 p.m. EST). ________  UPDATE (December 12, 9:44 a.m. EST):  Gold has gotten dumped for the umpteenth time, so far retracing a little more than 70% of the recent, apparently gratuitous rally. If you need a slender reed of hope to cling to, the  1212.10 low is still intact. A longstanding bear-market target at 1139.50 remains viable.  This corresponds to the 1125 target given for the December contract. _______ UPDATE (December 13, 12:04 a.m.): As long as the 1210.10 low holds bulls are entitled to the benefit of the doubt. But they'll need a 'booster rally' of at least $14.40 to get out of crisis mode, and exactly twice that to set up a recovery next week. Assuming such a rally were to occur from no lower than yesterday's 1222.60 bottom, that would imply that 1237.00 is where encouragement begins, and 1251.50, a sigh of relief.

Wednesday's dreadful performance produced only a couple of rally attempts, both of them feeble, but I wouldn't expect much from this vehicle until it hits the 1772.50 target shown.  Night owls should look to get short via camouflage, using oscillations around the midpoint pivot as your focus. Bottom-fishing at the target will probably be easier, if that's what you prefer, and you can do so via a 1772.50 bid, stop 1771.75, for a single contract. _______ UPDATE: The low was 1771.75, but at least one chat-roomer managed to hang on with a stop-loss at 1771.50.  While it is natural to assume that DaBoyz 'run stops' above and below key supports and resistances, it is another matter when they hit stops slightly above or below Hidden Pivots, since since we are the only ones who know about these swing points.  My judgment is that institutional traders are tuned to my numbers and perhaps even present in the chat room. Henceforth, I will try to be more guarded in presenting them.