Comex Gold has been dancing at the edge of a cliff, although it’s not possible to predict quite yet whether it’s going to fall.  However, the outlook for bullion could conceivably turn very ugly quickly, since, if the February contract were to dive below 780.40 this week, it would generate a robustly bearish Hidden Pivot signal on the daily chart. According to our technical rules, such a decline would exceed three prior lows, as the chart below shows, creating a strongly bearish impulse leg in the process.

(Click on chart to enlarge)

Although the negative implications would be somewhat muted if the futures were to hesitate at any one of the supports on the way down, we cannot rule out the possibility that all three supports will be breached in one fell swoop.  Were that to occur, there would still be one last “fail-safe” support at 755.50 to lean on, but if it too gives way, Gold would be signaling weakness, probably, for at least the next 2-3 months.

False Signals Rare

Those of you who have been in the Rick’s Picks chat room lately will know that Comex Gold futures have moved very precisely and predictably to Hidden Pivot targets on the hourly chart. Moreover, because we have paid close attention to the formation of impulse legs on both the intraday and daily charts, we have been fooled by an intermediate-term trend change in Gold only once in the last two-and-a-half years (when we jumped the gun on a marginal, and very subtle, signal back in May, 2006).  

By and large, the key to accurate forecasting has been to shun “billboard” predictions of spectacular rallies or declines. In that regard, since Gold was in the mid-$600s, we have been focused on a $907 target that is still valid.  It would take a $250 washout to negate that target, but, as implied above, a mere $18 decline from Friday’s settlement price could be warning of stagnant prices at best into Spring.

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Free Hidden Pivot Demo in Real Time

Can a novice learn in mere months how to interpret stock and commodity charts more accurately than many experts who do it for a living? Rick’s Picks  invites you to find out for yourself. Click here, then on the “Upcoming” tab, to sign up for this Tuesday morning’s Free Hidden Pivot Demonstration. It will be held during market hours and is open to anyone who might be interested in attending a Hidden Pivot Seminar, including the online Webex session slated for January 5-6.  During Tuesday’s free session, we will attempt to find actionable opportunities, in real time, in such popular trading vehicles as Comex Gold, the Diamonds and QQQQs.

If you are skeptical that chartist “voodoo” can correctly call the trend in any time frame, or that it can consistently identify price reversals to within mere hundredths of a point, then I would urge you to attend this session.  You will come away convinced not only that it is possible, but that you can do it yourself with just a few hours of training. You’ll learn to look at stock and commodity charts in a completely different way, using your eye to discriminate winning trading patterns from losers as you would good art from bad.

Seats are limited, so register soon if you want to be assured of getting a spot.