Tuesday, August 12, 2014

There are three bullish patterns of different degree driving gold right now, implying a possible buying opportunity in the day(s) ahead. For details and a chart to illustrate them, check out my latest tout for the December Comex contract. I've also provide a correction target where buyers, presumably working the night shift, could try bottom-fishing with a stop-loss as tight as three ticks.

Gold's stall almost precisely at the 1325.00 midpoint Hidden Pivot shown implies it will go to at least 1368.90 once past it. Since there will be three bullish ABC patterns driving the rally at that point, you should use an entry signal generated by the small pattern to get long -- preferably via camouflage, since the initial risk otherwise would be at least $5 (from A) and as much as $10 (from A2).  For night owls, I'll make an additional suggestion: Get long at the 1299.00 D target, on the 15-minute chart, of a= 1320.50 ( August 8 at 6:45 a.m.); b= 1305.70 at 8:45 a.m.) Some very precise bounces so far from p=1306.40 suggest the futures will fall to exactly 1299.00 if p is decisively breached. _______ UPDATE (August 12, 10:30 a.m.):  Gold has rallied moderately, albeit from a 1306.80 low that negated the bottom-fishing tactic suggested above. Next stop on the way up should be 1327.00, but if the futures blow past it, expect 1341.00. These targets come, respectively, from A and A2 in the chart.

Many in the investment world are anxious to see how quickly the broad averages recoup the sharp losses they suffered in late July and early August.  The bull market has been chugging merrily along for 69 months, and seeing it get hit hard for more than a day or two was disconcerting, like watching Muhammad Ali hit the mat. Can this actually be happening, you may have asked yourself?  Well, it did, and there are more than a few technical reasons why July's peak could turn out to have been an important one, even if it isn't the Mother of All Tops that permabears have been waiting for so patiently. As of Monday, the S&PS had clawed back 53% of the loss -- a logical place for a bear rally to sputter out.  Another would be the 0.618 Fibonacci level mentioned here earlier. It comes in at 1949.50, exactly 8.50 points above yesterday's high. I've told subscribers to try shorting there, albeit gingerly, but if you've been short all along and don't know how stubbornly you should fight the tape, let me suggest using an impulse leg-based stop-loss. This is a technique I teach in the Hidden Pivot Webinar, and I explain it as it applies specifically to the E-Mini S&P right now in the chat room.  The relevant sequence of prices is: 1941.25, 1956.75, 1971.75, 1974.50 and 1979.75. If you want to know exactly how to use these numbers to easily manage the risk of a would-be long-term short position you hope to avoid bailing out of; and, moreover, to prevent yourself from getting stopped out by a sucker rally, check out my 20:59 post in the chat room for detailed instructions.  If you don't subscribe, you need only click here for two weeks' free access to the chat