SPDR Gold Trust

GLD's daily chart looks better than that of gold futures, but not much. The A-B impulse leg (see inset) is not especially promising because it failed to exceed any 'external' peaks. Still, it looks good enough for us to give bulls the benefit of the doubt, at least for the next 4-7 days, in assessing the odds for a push to the 121.62 target. That would still leave this trading vehicle more than a tad shy of last November's 124.76 peak, which should serve as our benchmark for judging the power of the rally cycle begun in December from 107.  Only a decisive push past that number on first contact would give us reason to be very bullish. In the meantime, I'd view a pullback to as low as 115.93 (i.e., the green line) as a 'mechanical' buying opportunity, although doing so at the 117.83 midpoint pivot seems too risky (although we cut cut it down to size by using a 'camouflage' entry trigger.  For the moment, however, I have no swing or position trades to recommend, other than what we might find intraday on the sub-hourly charts. _______ UPDATE (Mar 30, 7:15 p.m.): Gold futures look like hell, but we'll take a shot with this vehicle anyway just to have something to do on a Friday.  I'll recommend bidding 1.08 for four April 13 118 calls, but stop yourself out if GLD falls to 116.55.  The rationale for the trade is that GLD itself would become a 'mechanical' buy on a pullback to the red line shown in the original chart (see inset). We're bidding for the call just above the midpoint pivot, the most logical spot for a price reversal if it -- and GLD -- are about to turn around. Click here for a chart of the

GLD brushed aside a midpoint Hidden Pivot resistance so easily on Tuesday that there should be little doubt about whether this gold trading vehicle will reach the 121.61 target shown (see inset).  Even so, we should want to monitor price action at the 119.71 secondary pivot closely, since a precise hit followed immediately by a pullback could be warning of a fatal retracement to below 'C'. If there's a pullback in the meantime to p=117.82 that meets our criteria, a 'mechanical' bid there could be warranted. The best place to keep apprised of such developments in real time will be the chat room, but I will also send out an email alert if a trade is explicitly signaled. Be sure to check 'EMail Notifications' on your account dashboard if you want to receive these bulletins. _______ UPDATE (Mar 22, 9:25 p.m.): Today's upthrust didn't get very far. However, it nonetheless refreshed the bullish energy of the hourly chart by generating a small but technically significant impulse leg. This occurred when GLD exceeded an 'external peak at 119.12 recorded March 1 on the way down (click here for chart). This increases the odds the rally will reach the 119.82 'secondary pivot'; and thence, perhaps, D=121.72. _______ UPDATE (Mar 23, 7:38 p.m.): Today's weakness generated a bearish impulse leg on the hourly chart, mildly dimming the bullish scenario given above. We'll know by how much once we've seen this pattern play out: click here. If GLD is going to reverse and turn higher, the most bullish way for this to occur would be from the pattern's 118.39 midpoint pivot. If, on the other hand, the downtrend exceeds the 117.92 target, that would be bearish, at least for the near term.

I'd raised the prospect last week of placing a 'mechanical' bid at the green line (see inset) if GLD pulled back to it, but my appetite for risk has diminished because of how hard this vehicle has gotten sold down. This generated a bearish impulse leg on Friday. Under the circumstances, if we are to do any buying, I'd prefer that it be on a second leg down, assuming there is one. Otherwise, buyers will need to push above 119.84 within the next day or two to imply that they're game for more. If GLD slips below 115.71, that would probably generate enough downforce to test support near 113._______ UPDATE (Mar 7, 7:05 p.m. EST): Yikes! This morning's gap-down opening crashed several prior 'structural' supports, all but ensuring more slippage toward 113. _______ UPDATE (Mar 10, 12:19 a.m.): 'Yikes!" for sure. GLD's collapse has unfolded more quickly than I might have imagined, and further slippages into the $13s now looks like a done deal. To be more precise, I now expect the stock to hit the 113.77 Hidden Pivot target shown (see inset, a new chart)  on Friday. Any lower would make a test of late January's low at 112.81 very likely. ________ UPDATE (Mar 12, 8:08 p.m. EDT):  GLD reversed on Friday from a low at 114.13 that was 40 cents above my target. Now, however, I'll need to see a print exceeding 115.36 to be convinced this move is going somewhere.  Above 117.93, I'd become a true believer, at least for the time being. _______ UPDATE (Mar 14, 8:35 p.m.): Rallies have gone nowhere, so the 113.77 minimum downside target and the analysis above still obtain. ________ UPDATE (Mar 15, 9:21 p.m.): GLD has rallied from a 114.02 low that missed the downside target flagged above by 25

For subscribers not keen on facing the sometimes considerable risks of trading gold futures, you can substitute this equity vehicle. For today, I'll specifically recommend placing a 'mechanical' bid for 200 shares at 117.58, the midpoint Hidden Pivot, stop 117.10. If the trade goes well, take off half the position at 118.99, two cents shy of the 119.01 target. If you would prefer to use call options, I'd suggest focusing on the March 03 118 calls. They settled on Thursday at 1.16, but if GLD dips to the red line in the early going, I would expect them to be trading for around 0.78 - 0.88. Don't pay up for them, since you'll already be giving up edge by trading options, whose value decays over time, instead of stock.  Decay tends to be particularly noticeable on Fridays, when longer-dated options come under pressure as the nearest ones expire. _______ UPDATE (Feb 20, 8:18 p.m. EST): The stock's 117.62 low just missed our bid, so nothing should have been done on the orders.  They can stand as given above. _______ UPDATE (Feb 21, 9:59 p.m.):  GLD opened beneath the stop-loss I'd advised, so there was no trade. Cancel it if you haven't already, but please note that the 119.01 target will remain valid as long as 116.15 isn't exceeded to the downside. If the rally should surpass the target, the next stop would be 120.60. _______ UPDATE (Feb 22, 10:39 p.m.): GLD has been stabbing at p=118.38, but with no penetration so far. That midpoint pivot will need to give way for the 120.60 target to become an odds-on bet. Alternatively, a print below 116.60 would be signaling trouble. _______ UPDATE (Feb 27, 6:06 p.m.): That should be it for now, since the rally in the first half of this morning's

In The Morning Line (see above), I characterized as imbeciles and knaves those who chased stocks higher Wednesday on the latest non-news from the Fed. However, we shouldn't overlook the fact that these same dolts and broad-tossers threw enough money at gold in the space of an hour to cause its price to spike wildly. Should we be worried?  Not if my respective forecasts for stocks and bullion are correct. I remain cautiously bullish on the latter while looking for a potentially important top in the broad averages as early as today.  From a technical standpoint, I'd suggest using the pattern shown to trade this ETF, either with stock or options. It has been confirmed by the pause almost exactly at p=120.60, and a decisive move past it would portend more upside to at least 122.22, or possible even 123.85. As always, an easy move past any Hidden Pivot implies the trend will continue. Meanwhile, p, x and D can each be used in the usual ways to get long or short, or to exit a trade.

Thursday's precise stall at the 118.43 midpoint resistance shown has validated the bullish pattern and its 122.36 target.  The easiest way to get long would be to place a mechanical bid on the green line at 116.44, stop 114.49. If GLD pushes above the red line without first pulling back to the green, we could attempt a mechanical buy at 118.41, stop 117.09. This would be somewhat less risky than doing so at the green line. To meet our criteria for this type of trade, GLD would first need to exceed the red line by 0.60 (or so), and then it would have to hover above it for at least three bars. I've sketched this hypothetically for your further guidance. I wouldn't recommend substituting options for stock, since we typically buy puts or calls only at swing highs or lows that can be predicted fairly precisely. (Note: The green price bars show off-hours trading.  They are necessary here because one of the three coordinates, the point C low, occurred in the evening.) ______ UPDATE (February 22, 11:35 p.m. EST): Back away for now.  GLD gapped down through the green line on the opening, negating our strategy. If you bought the clumsily rigged opening anyway, you bought on the low of the day but you should still scratch the trade.

Although I've suggested covering a short position in gold futures, this vehicle's steep decline over the last six weeks looks like it has farther to go before a firm bottom is reached. Not only is the unfulfilled downside target at 99.54 still in play, GLD would become an enticing 'mechanical' short on a rally back up to p2=103.15. The most bullish thing that could happen over the near term would be an uncorrected rally that exceeds the 104.65 'external' peak shown (see inset). That would turn the daily chart impulsively bullish for the first time since August. For purpose of getting short at 103.15, use near-the-money puts if and when GLD gets within 0.10 points of that number. A 103.36 stop-loss is suggested. Alternatively, we can use the 15-minute chart (24-hour) to stake out a speculative long early in this rally.  A pullback from just above Friday's  102.46 peak (9:00 a.m. EST) could generate a camouflage entry opportunity with relatively little risk. _______ UPDATE (December 1, 6:10 p.m. EST): The pullback we were looking for has indeed occurred, but amidst such nutty price action that I will suggest another way in: bid 0.94 for four Dec 24 103 calls, good through Thursday and unless GLD slips below 101.50._______ UPDATE (December 2, 11:40 a.m.):  The trade was canceled, since GLD traded down to 101.20 before the bell, and opened at 101.35.  The weakness leaves zero doubt about where it's headed next: to the 99.54 target flagged above._______ UPDATE (10:26 p.m.): If and when the downtrend hits 99.60, bid for four December 24 100 calls. I estimate they would be an excellent buy for around 1.36, but you can adjust the bid if it looks like they won't come quite that cheap. I'll post a stop-loss here if the trade fills, but

Elsewhere in today's touts I've outlined a strategy for hedging a short position in December Gold when it reaches a longstanding target at 1044.50. However, a separate trade in this vehicle appears warranted regardless of what the futures contract does. Specifically, I'll recommend buying 200 shares of GOLD with a 101.61 bid, stop 101.38, day order. This is an attempt to leverage an expected bounce from the 101.56 target shown, and it is independent of my strategy for the December futures. If you can improve on this trade using real-time Hidden Pivot information as it becomes available Wednesday morning, I would encourage you to do so. And if you'd prefer to interpolate using call options, I'd suggest a cautious bid for Nov 27 calls at the 102 strike. Be prepared to exit half of any position entered thereof if the price of the calls doubles. _______ UPDATE (5:23 p.m. ET): I've moved the target lower, to 101.35 (see new chart),  so adjust your option bid accordingly. If you plan on buying shares of the ETF, use a 101.37 bid with a stop-loss at 101.15.  The original target at 101.61 comes from a very long-term pattern on the weekly chart, but we may be able to get aboard closer to the actual bottom by using a chart of much smaller degree._______ UPDATE (November 20, 2:26 a.m.): GLD turned from 101.98, stranding our bid. For now, do nothing, since I don't want to chase this vehicle higher.

Yesterday's trade in this vehicle had not been offered as a tout, but a timely question in the chat room helped us identify an opportunity to pick up some cheap call options intraday. Here is what I wrote in the chat room:  "The Auggie 160 market is 0.22/0/26, so 0.24 is the right price with GLD at 132.88. So, if GLD falls to our 131.83 target, the Auggie 160s should sell for about a nickel less (they have a delta value of about 0.04). So let's bid 0.21 (an extra penny for good measure) for 28 of them., stop 0.18. We'll worry about what to spread against them later."  Although the intraday low at 130.95 exceeded our target, the result was that subscribers were able to buy August 160 calls for 0.21, a penny off the intraday low. This position is highly speculative, since there are two very bearish targets outstanding, but it has the potential to pay off at about 60-to-1. With a three-cent stop-loss on the calls, we've limited our theoretical risk to about $84.  However, I'm now going to suggest giving the position a little more room by lowering the stop to 0.16. At the same time, and on a one-order-cancels-the-other (OCO) basis, I'll suggest offering 28 August 163 calls short for 0.30 against those we hold.  If the order fills we'll own a virtually riskless position that can make us as much as $8400 if Gold rallies strongly between now and late August. _______ UPDATE (June 4):  With a print at 0.16, we exited the calls on May 31 for a $120 loss. (They subsequently traded as low as 0.11.) Just to have a horse in the race, I'll recommend bidding 0.31 for four August 150 calls, good till June 10.