By featuring “hula numbers” for Comex gold, I’ve tried to take some of the guesswork out of trading an increasingly volatile bull market. Okay, so it’s also a marketing gimmick. But why shouldn’t a guru be made to dance a hula in Times Square if he is wrong, wrong, wrong? You say that if even a mere fraction of America’s lame stock forecasters were to show up in their grass skirts on the same day, ukuleles in hand, midtown Manhattan would be inundated by a hula tsunami? So what, then, would be a reasonable compromise? And don’t tell me a guillotine in Central Park, since that might have a “chilling effect” on the guru industry. Think about it. For every Abbey Joseph Cohen that deservedly went to the scaffold, delighting the mob, you’d wind up beheading a…Joe Granville.

(Click on picture to enlarge)

Whatever you decide, I have no qualms about putting my reputation on the line whenever Comex Gold invites a hula number by telegraphing its next move with the intricate precision of a bumblebee doing a hive dance. So where is Comex June Gold head next? My current hula number is 709.50, a target that I first broached when the futures exceeded the last “sure thing” at 665.50.

Like Fred and Ginger

I should caution you, though, that merely “knowing” where gold is headed is no guarantee that trading it will be painless. Take yesterday, for instance. Gold danced with our hidden pivots like Fred with Ginger. But oh, what a day! Here’s the forecast and recommendation, exactly as it was disseminated on Wednesday night:

+  $ June Gold (681.50)
05/03/2006 18:27:08 EST 5863
This correction could come down to as low as 653.20 over the near term, but a lesser pivot at 663.10 has the potential to turn the June contract around. That's a delicate spot to try bottom-fishing, but if you can abide a stop-loss as tight as 662.90, give it a try. This one's good during the night session only, since that's when Gold has been strongest lately.

So how did June Gold reward prescience? The following intraday updates, published via the Rick’s Picks bulletin launcher Thursday morning, tell the story:

Update 10:44 a.m. EST: The actual overnight low was 662.80. Since this was just 0.30 below my projection and one thin dime below the suggested stop-loss, we hold no position officially. However, if you widened the too-tight stop-loss by just a hair and are now long, use a 681.30 target as a minimum objective. The so-far high this morning at 679.80 implies a trailing stop no wider than about 75 cents.

Update 2:27 p.m. EST: Nasty little sonofabitch, isn't it? The futures have just now achieved my 681.30 target, plus 0.70, but not before they swooned for a couple of hours down to 668.00! In any event, the slight push minutes ago above 681.30 implies that my earlier forecast of a larger-cycle rally to at least 709.50 remains on track.

Below is a graphic picture, from Wednesday night forward. Of course, Fred and Ginger rarely achieved perfection in a single take.

(Click on chart to enlarge)

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