GCQ09

Yesterday’s low fell a tick above the 50% retracement line relative to the July 13 bottom, but if the futures were to go still lower today they’d hit a theoretical support at 927.50 that equates to a 0.618 retracement. These numbers will probably serve as well as any Hidden Pivot that I can identify (one of which caught yesterday’s low fairly closely — i.e., within less than 1.00 point).

Gold popped a dime above a 959.90 rally target we were using, implying that the next thrust should carry to 966.50, the first minor Hidden Pivot resistance above it. Please note in the accompanying chart that just a smidgen more than that — specifically, 966.80 — would be needed to kick the buying spree into a higher gear. ______ UPDATE (11:15 a.m. EDT): Gold is getting whacked gratuitously today, with the August contract down more than $14.  The actual low is 939.10, a precise midpoint support that if broken will imply more downside to as low as 932.90 over the near term.

These days, we speak of the price action in Gold as “bullish” in the same way we would describe a patient on life support as “alive”.  It’ll get better, I’m sure, but probably not before the Great Bear Rally of 2009 (/2010??) ends with either a bang or a whimper.  I’ve tried to sound encouraging by saying Gold futures are at least tradable while we wait, but after snoozing through Friday’s dirge, I’m not so sure. Check out the graph if you want to see a picture of accumulation so quiet that a mere $10 rally would be a relative thunderclap. _______ UPDATE (11:21 a.m.): Gold has topped today a dime above a modest target given here earlier, a Hidden Pivot at 959.90. You can go back to sleep now.

Perhaps it is merely boredom that is inspiring new rally targets each day, but the one that caught my eye Wednesday evening is 966.50.  Its provenance is shown in the accompanying chart, and either it or a lesser Hidden Pivot as 968.10  looks likely to contain the next thrust. The lower number is now my minimum upside objective for the near term, but either target can be shorted by scalpers with a stop-loss as tight as four ticks (0.40).

The 959.90 rally target given here yesterday still obtains, although the futures may have to pull back to as low as 943.60 to get a running start for the next leap.  The turn could also come from 945.10, a Hidden Pivot, but I’d suggest using the lower number and a 0.70 stop-loss if you’re going to take a stab at bottom-fishing. _______ UPDATE (11:05 a.m.):  It is moderately encouraging that the futures are having such trouble pulling back to midpoint supports. However, there does not seem to be muich buying enthusiasm at the moment to capitalize on this with a push to 959.90. 

The most useful benchmark I can cite right now is 959.90, a midpoint resistance derived from the pattern shown in the accompanying chart. It’s not very compelling because the larger pattern has experienced so many disruptions, but we can use it as a minimum upside objective for the near term nonetheless. Its sibling ‘D’ target lies at 1014.90, a number mentioned here before.  As noted earlier, the most powerfully bullish signal we could see would be an impulsive rally that exceeds both of the numbered peaks without taking a corrective breather.

We took a good look at the August futures during yesterday’s tutorial session, finding a few reasons why this rally should hit $1000 even if it is not the one that’s going to get us to the Promised Land.  Two things to notice:  1) the last selloff failed, by a few dollars, to reach an $899 target that I’d flagged as a minimum downside objective; and, 2) the subsequent reversal has had little difficulty banging out a series of fresh impulse legs on the hourly chart. So what would it take to suggest the intermediate-term picture is more than just moderately bullish?  Answer: An uncorrected thrust from 940.10 to 966.80, creating a bullish impulse leg on the daily chart (see inset). We’ll wait for this crucial piece of evidence before we get excited about the promising move off $900. _______ UPDATE (from the chat room):  The daily chart shows a pattern that got shapelier with yesterday’s rally: A=882.00 (April 30) and B=992.10 (June 3). It yields a ‘D’ target at 1014.90, with a midpoint at 959.90 that can serve as a minimun upside target for the near term.

All of the numbers are located on the chart so I don’t feel that I have to go over them.  This is what my trading screen looks like.  I have left off the Pressure indicator for clarity purposes.  The daily chart still has upside pressure being applied to it.   Price moving toward the 935 level.   Price did find support at the 907 level.

The 15 min. chart has upside pressure being applied to it.  Price found support at the short cycle po2 level for the down move and is currently oscillating around P for the move up at 925.   The  price objective on the 60 min chart at 926 is currently acting as resistance to a move higher.   There is also upside pressure being applied to the 60 min chart.   For price to start down again it would have to go through 921.80 and then 915.90 would be P and a possible temporary support. Ira

There seems to be question with gold at this level.  The pressure indicator is over extended and it is trying to turn higher.  There is divergence at the lows right now which indicates that the internals for gold are stronger than price indicates at this time.  The second price objective for the move down is at 886 and it doesn’t appear that price will reach there on this leg down.  For price to make a new run at 1000 it would have to go through 935.50 and then the first price objective, P, would be 966.  A short cycle retracement higher could start with price movement above 918 and then the resistance levels would be 931, 945 and finally 958.  If this this takes place then there could be a retracement down before the 966 is reached.  Price would have to go through 950 to void the current down move.   All upward price projections are based uon the current low at 904.80