The futures have balked en route to a 984.50 rally target that should have been a piece of cake. They also failed to take out a 971.00 peak from May 20 that looked vulnerable. Taken together, these are signs of incipient timidity if not necessarily of weakness, but our suspicions would be allayed if the target is reached within the next day or two. Alternatively, the downtrend in progress at the close looked bound for 940.50 subject to last-ditch support at 945.10, its associative midpoint.
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GCM09
At Tuesday’s close the futures looked like they needed to come down to a midpoint support at 943.10 to find traction. This would present a buying opportunity, since the Hidden Pivot is so nicely defined. Accordingly, I’ll recommend bottom-fishing via a 943.20 bid, stop 942.60. Keep in mind, however, that if the support gets pulped, the futures would be telegraphing more downside over the near term to at least 931.40, the ‘d’ correction target associated with 943.10
If Gold is setting up for a big thrust, it shouldn’t have to correct any further before taking on the 970.00 peak recorded on March 20. That means no prints below 952.80 today, since that would insert a b-c correction into the impulse leg begun from 915.20 on May 18. The impulse leg as it exists so far is fairly strong and should be able to push the June contract to $1000, but it is what happens after that that is our main concern.
To be on record, the following repeats a note I posted in the chat room earlier today: ”967.30 should be used as a minimum upside objective for the near term. This is the Hidden Pivot (HP) midpoint of the pattern begun from 805.20 on January 15. The 180m chart offers a nice panoramic view.” If you work the numbers you’ll find that the ‘D’ target associated with 967.30 lies at 1069.60 a price that I did not mention earlier. Usually I would infer the move to ‘D’ is under way following a two-day close above the midpoint. In this case, however, we’ll be more cautious, making the rally prove itself each step of the way, since we’ve had evidence already that the bull cycle begun in mid-April may be a bit timid.
Based on the pattern shown in the chart, the June contract looked like a good bet to push up to at least 944.50 a Hidden Pivot, but anything above it would indicate 948.10. If the higher number gives way, especially on a closing basis, we could look for yet another upstroke to finish the week. _______ UPDATE (12:37 p.m.): Gold has followed today’s forecast precisely so far, rallying to 944.00 overnight, then hitting 948.40 in a second push around mid-morning.
We’ll breathe easier when the futures finally push above 935.80 but the significance of the move won’t be as bullish as before, since the rally has been interrupted by a so far three-day correction from the recent high at 934.80. I hesitate to read too much into it, but my hunch is that this subtle sign of timidity portends an unsuccessful struggle if Gold should approach the $1000 barrier within the next few weeks.
An hour-long bounce yesterday from a Hidden Pivot at 918.10 that I flagged in the chat room ended ignominiously with a relapse to 915.20. This implies the futures will now fall to at least 911.50, a Hidden Pivot that you can bottom-fish with a stop-loss as tight as 910.90 Please note that a print exceeding 924.80 would negate this target while turning the minor trend not-very-persuasively bullish. The bigger picture remains bullish and was unscathed by yesterday’s price action, such as it was. One might surmise that precious metals were fatigued from watching the world’s bourses celebrate the regime of paper money by making Goldman Sachs shares the star of their blanket-toss.
Our bullish benchmark is still 935.90 a tick above an unimposing but nonetheless important peak that was created April 1 on the way down. However, if a test of resistance at $1000 lies shortly ahead for the bull cycle begun in mid-April, the futures should be able to do a bit better, surpassing a second “external” peak at 948.50 recorded on March 26. Both price points are shown in the accompanying chart
It would be hard to say whether the tepid rally of the last three weeks has been more aggravating for bulls or bears, but the former should continue to use 935.90 as a go-ahead signal, since that’s what it would take to turn the daily chart decisively bullish. The most immediate Hidden Pivot target, 936.60, would do the trick, but if the futures fall back for one last consolidation, look to buy around 921.50 with a tight stop-loss, since that’s the midpoint pivot associated with the target.
The Hidden Pivot at 936.60 shown in the chart was a logical place for yesterday’s rally to top, so we shouldn’t be overly optimistic coming in this morning now that the spiky high at 931.40 has missed our number on the first try by more than five points. The target itself remains viable nonetheless, and we can all breathe easier if it gets hit or exceeded today. Alternatively, the futures would need to fall to 915.90 by day’s end to turn the hourly chart bearish.
