Gold futures crushed an important hidden-pivot support at 599.40 yesterday, on their way to one of the worst single-day losses on record. The breach of the pivot, which I’d advertised here prominently, implies that the correction will continue to at least 549.40, basis August. That is the closest important hidden-pivot support below yesterday’s 566.80 settlement price, and it should be considered a minimum downside objective for the near-term. If achieved, it would amount to a slightly more than 25 percent pullback from mid-May’s multi-decade high near $740. However, measured from the start of the bull cycle launched from $546 two months earlier, the correction would be approaching 100 percent.

If the support at 549.40 fails decisively, implying the futures have exceeded it by $1.00 or more, it would have negative implications for the long term, at least in theory. Still, we would want to give the bull the benefit of the doubt, since it would take a dip below 507.50 (see chart above) to create a bearish impulse leg on the weekly chart.

For the record, I’ll note as well something that will come as no revelation to you -- that the broad market looks like hell. I’ve provided a precise downside target for the Dow Industrials in the Touts section of Wednesday’s edition, as well as an analogous support in the Mini-Dow futures that you can bottom-fish with a very tight stop-loss. However, if the cash-index pivot is exceeded even slightly, we would infer that the Dow’s by then thousand-point fall is just the beginning of a decline that is likely to be far, far worse.

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