Bullion has perked up nicely in the last few days, delivering on the promise of certain bullish technical signs that I cited here last week in an intraday bulletin: “Some VERY bullish action in gold this morning,” I wrote back then. “The ABCD pattern I've labeled in the August Gold  chart below projects to a crystal-clear hidden pivot at 429.80, but the futures have exceeded it by 70 cents. Moreover, they've generated a strong impulse leg by exceeding the 430.10 high recorded on July 7. The impulse leg began with the July 19 low, 418.90, and not the more recent one achieved on Wednesday at 421.80. This means that when this rally finally corrects, it is all but certain to produce a follow-through leg of at least 11.60 points.

(Click on chart to enlarge)

Especially encouraging is that the latest impulse leg, without having corrected yet, has since tacked on an additional $7. This suggests that when the current, minor-cycle high is made and the futures pull back a bit, we could see a follow-through thrust of 18 points or more from the correction low, basis December. We currently hold tracking positions in several mining stocks that are showing substantial gains as a result of timely profit-taking at various times, and of excellent entry points. The stocks are: Coeur d’Alene, with a cost basis of 2.57, versus yesterday’s 3.83 close; Canyon Resources, with a cost basis of 0.55, versus a current 0.65; and Bema Gold, with a cost basis of 1.60, versus a current 2.50. If the rally continues we will want to expand the scope of our precious-metal holdings as aggressively as opportunity allows, always trying to buy and to augment long positions at hidden-pivot supports while taking partial profits at hidden-pivot rally targets. I will also continue to offer technical analysis and trading strategies for your personal favorites each Wednesday morning during the increasingly popular, real-time Q&A sessions.