Feb Gold has fallen back to unchanged after bolting from the gate Sunday night, but not before generating a fresh, bullish impulse leg (see inset) on the hourly chart. The move has set up a possible buy signal on any follow-through leg that occurs from a low of 1232.30 or higher. I’ve sketched this hypothetically for night owls who trade this vehicle, but I’d suggest using ‘camouflage to get aboard if you try it, and to limit theoretical entry risk to 5 ticks or less by using a chart of lower degree (i.e., the 3-minute or less). However, if you’d prefer to enter via a conventional buy-stop on the hourly chart, you should wait for a second point ‘C’ to form in order to give the overly eager their chance to get stopped out with a loss on the first try. There is risk of missing the trade, but it is justified because gold traders were being pretty coy Sunday night. _______ UPDATE (10:01 a.m. EST): It was actually the third point ‘C’ that worked, yielding an entry point at 1237.50 that is nicely profitable at the moment. If you got aboard, please let me know in the chat room so that I can establish a tracking position. Since the rally from the entry point has been $10 so far, and because the high came within $1.25 of the 1248.25 target, you should be out of at least half of any initial position by now. The futures will need to improve on the so-far high by at least 0.70 to generate a fresh bullish impulse leg on the hourly chart. (There’s an ‘external’ peak at 1247.60 from December 17.)
