Gold savaged my forecast yesterday, uncorking a powerful rally on a day when I’d expected just the opposite. The downside target at 1250.50 remains valid nonetheless, and although I could continue rooting for it until I’m shamed into retreat, I’ll revert to the purely mechanical analysis that you have come to rely on. From that perspective, yesterday’s $40 rally was still not very impressive, since the reversal failed to generate a bullish impulse leg on the hourly chart. That would require a print at 1337.90, about $21 above current levels. Traders needn’t wait for so obvious a signal to get long, since there’s a nice ‘hook’ for camouflage in the form of a look-to-the-left peak at 1324.90 (10/1 at 9:00 a.m. EDT) It doesn’t even display properly on the hourly chart, but any rally that pulls back in ‘b-c’ fashion from a tick or two above it would provide a very enticing opportunity to get long nonetheless.
