I suggested exiting a long position on Friday for a theoretical gain of about $2800 per contract, but not for reasons of bearishness. We were simply sticking with our discipline, which called for a stop-loss if a bearish impulse leg formed on the 15-minute chart. That was a yellow flag, to be sure, but strictly speaking, the rally begun from 1141.70 on November 30 is intact and looks healthy. Moreover, gold’s resilience in the face of collapsing oil prices is encouraging. To get back aboard, I’ll now recommend bottom-fishing at the 1208.90 target shown. You can use a stop-loss as tight as four ticks, but be alert to a possible turn from above this Hidden Pivot. The first logical place where this might occur is from 1212.00, and thence 1211.10 . A very tight stop-loss could be used below a bid placed just beneath the higher number, but ‘camouflage’ is recommended. _______ UPDATE (8:32 a.m.): Sellers pounded gold through every Hidden Pivot support identified above, so the bull no longer deserves the benefit of the doubt for the near-term. The closest downside target at the moment is 1204.40, but it would take a 1215.00 print to the upside negate it and perhaps turn things a round. _______ UPDATE (11:23 p.m.): The futures have rallied $8 from an 1191.80 Hidden Pivot target that came from a pattern that I characterized as “gnarly” in the chat room Monday. We should be faintly encouraged by this, but the February contract would need to push above 1221.30 by Thursday before we could confidently infer that a sustainable rally is under way.
