December Gold is primed to test a double bottom near 1180 that has produced only weak rallies since the first was recorded about 15 months ago. Odds are not good that the ostensible support will hold, but neither is it farfetched to think that a fake-out breach of the low might give way to a rejuvenated bull market that stretches back more than a decade. This, then, is what we should look for now: a running of stops just below 1180, followed by an all-but inevitable bounce higher. My hunch is that if that bounce achieves 1325 without pausing for breath, it will be the real McCoy. Notice, however, that any downdraft that exceeds the ‘external’ low at 1155.60 recorded in July of 2010 would be bad news for bulls, since it would refresh the bearish impulsiveness of the weekly chart. These numbers will not be exact because this is a composite chart that blends many monthly contracts. But the numbers should be close enough for us to gauge the incipient strength of any selling. _______ UPDATE (October 3, 11:03 a.m. EDT): Several in the chat room recalled an old target at 1198.40. It worked briefly and very precisely for bottom-fishing, promoting a $5 bounce, but the fact that it was subsequently demolished was warning of how weak this vehicle remains. My minimum downside target is still the 1126.05 pivot that I tweeted, Stock-Twitted, talked about during the Wednesday tutorial session, and posted in here the other day. _______ UPDATE (October 6, 2:43 a.m. EDT): The futures have rallied after dipping just beneath the 1285.00 low recorded back in December, but the bounce so far is feeble, suggesting the futures are about to plumb new depths. Alternatively, it would take a print today or tomorrow at 1211.10 to resuscitate the hourly chart. _______ UPDATE (October 7, 3:22 a.m.): The futures have rallied to within a millimeter of the 1211.10 ‘external’ peak. A bc-type pullback from just above it could set up the first good ‘camouflage’ buying opportunity we’ve seen in a while. If the signal triggers and you get aboard, please let me know in the chat room so that I can establish a tracking position.
