The pattern shown is only weakly bullish, but don’t let that scare you off if you’re itching to trade gold from the long side. Initiate a mechanical trade in either of two ways: 1) bid 1179.90, stop 178.30, with 1184.60 as a minimum objective; or, 2) buy a pullback to p=1184.50 after this midpoint pivot has been exceeded by 1.80-2.20. Minimum objective would be 1189.20. Notice than in neither instance are we using the actual ‘D’ target of the pattern. That’s because rallies tend to fail to reach their D targets when the dominant trend — in this case a bear market stretching back to April 2011 — is bearish. (Note: Moments ago, as we went to press, the first trade triggered with a dip down to 1179.60. I’d suggest passing up option #1 and spectating just to get the hang of it, win or lose.) _______ UPDATE (3:40 p.m.): The Whoopee Cushion bounce came from an 1173.90 low on the latest Fed ‘news’, so there was no trade. The $14 rally has no consequences unless you are a day trader.
