Gold didn’t show much pluck on Friday, considering how badly stocks were getting trashed. Still, the few pokes that buyers took at a 1204.60 midpoint resistance (see inset) hinted at its permeability, and therefore the possibility of more upside to the 1214.80 target of the bullish pattern shown. Although that would be no great shakes in itself, it would put bulls back on the offensive by pushing past supply represented by some ‘external’ peaks recorded over the last week or so. Traders looking to get aboard should consider a mechanical entry at 1204.50, stop 1201.10, on a pullback from within the range 1207.20-1209.00. ______ UPDATE (10:46 a.m): Traders who took the trade got massacred when a rally that topped at 1209.00 (3 a.m.) plunged overnight to a so far low of 1191.20. The loss on a mechanical entry would have been a theoretical $340/contract. Henceforth, we will avoid bullish mechanical trades in this vehicle, since gold is in a bear market that seldom reaches the D targets of corrective rallies.
