I reaffirmed my long-term bullish outlook for Gold here yesterday, but without preparing you for the worst over the next 2-3 weeks. With August Gold currently trading around $651, I am now projecting a decline to at least $638, a Hidden Pivot target that will remain valid as long as the futures don’t rally above $679 first. If correct, that would imply a fall of about 2% from current levels. If and when the August contract comes down to the target, I’ll provide explicit trading instructions for subscribers who would like to initiate or augment a long position, or perhaps cover a short one.

(Click on chart to enlarge)

The bearish target is not chiseled in stone, but the evidence is strong at the moment that it will take at least somewhat lower prices to shake out the last of the nervous nellies. We would have to re-think our bearishness, however, if the futures were to thrust above two prior peaks in the manner described here yesterday. For that to occur this week, August Gold would need to surpass the two peaks shown in the chart above, the higher of which is 661.40.

Nibbling at Yamana

In the meantime, we’ll continue to nibble at mining shares whenever we can do so with relatively little risk. We attempted this painlessly in Yamana Gold yesterday with a buy-stop entry, but the stock headed lower, negating our strategy. Here is the actual recommendation, from the Touts section of Tuesday’s Rick’s Picks:   “Assuming Yamana doesn't dip beneath yesterday's low at 12.84, the stock could be ready to pop to 13.67. The midpoint resistance associated with that Hidden Pivot is 13.25, implying you could get long on a 13.27 buy-stop. A more conservative way to get aboard would be to buy the stock on the close if it looks like it will fall between 13.27 and 13.35 and AUY has traded no higher than 13.39 intraday.”

In practice, we can try to buy gold stocks at minor-cycle lows; or, as above, on breakouts that are defined by Hidden Pivot rules rather than by the usual conventions of trading on trendlines and support & resistance. In practice, we have seen that it is possible to buy mining stocks and gold futures as they fall, and to be “wrong” in each instance, yet still make money or do no worse than break even on most trades. There is no reason to take an aggressive stance, especially since the precious metals sector has been in correction mode for more than a year.

An Eye for Art

When analyzing charts, we like to think of promising price patterns as resembling paintings that are pleasing to the eye.  Indeed, with just a little bit of practice at developing an “eye for art,” one can reach a point where a chart simply “looks” appealing from a bullish or bearish perspective.  (Click here for your free copy of “About My Method,” a detailed discussion of the Hidden Pivot Method.)

Moreover, when a big move is coming, it cannot possibly occur without tipping us off with a thrust exceeding the requisite two prior highs or lows. Knowing which prior highs/lows are important requires a certain adjustment of the eye, but making such distinctions is no more difficult, really, than identifying in a painting elements of harmony, symmetry and balance.

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June Seminar: Last Call!

Only a few students have signed up so far for the June 30-31 online Hidden Pivot Seminar, so if small class-size appeals to you, this is the session you’ll want to attend.  The seminar will likely be the last I will offer at a time of day that is convenient to students from Australia and New Zealand, but the show will go on regardless of how many students enroll.

If you have been waiting for just such an opportunity,  please click here (then click the “Upcoming” tab)  to reserve a place in the classroom, or here for detailed information about the course itself.  Incidentally, these hours will work for anyone in the U.S. who would prefer to take the course in the evening. The hours, in Eastern U.S. time, are from 6:30 p.m. to 9:30 Friday and Saturday, June 29-30.  This translates to 8:30 a.m. to 11:30 a.m. Sydney time, Saturday/Sunday; or 6:30 a.m. to 9:30 a.m. Hong Kong time.

Free to All Graduates

Incidentally, all seminar grads will soon have free access at all hours of the day to a recorded version of the seminar, as well as to the Q&A forums held in conjunction with each class. In addition, I am in the process of creating an advanced tutorial built around some especially difficult charts. It will also be free to seminar grads and accessible round-the-clock.