Gold is in the fourth week of a modest uptrend that projects to 1127.70. I suggested bailing out of a long position on Friday for a small loss simply because there are easier ways to make a buck. Our goal when we initiate a trade is to have it go in-the-black as quickly as possible. We should choose trading vehicles that we don’t care about, since trading boils down to catching a profitable ride aboard a dot that moves up and down on a chart. If gold as a trading vehicle had a better track record — i.e., one that offers better odds of actually reaching a ‘D’ rally target — I’d have had no problem sticking with the position. Perhaps at some point we will; for if and when gold’s uptrends start reaching, then exceeding, minor Hidden Pivot targets with ease, we can start to take it more seriously. But using gold futures for leverage instead of any of ten-thousand other trading vehicles? It’s simply not worth the aggravation. _______ UPDATE (10:56 p.m. EST): At day’s end the futures were head-butting the secondary pivot at 1113.55 (see inset), presumably bound for the 1127.70 target flagged above. Any progress above it would hint of more upside to come — perhaps even a test of mid-October’s high near 1192.00._______ UPDATE (January 26, 9:40 a.m.): It was out of boredom that I suggested exiting the long position. Now, however, an exit has been signaled using a ‘dynamic’ trailing stop. Based on an overnight high of 1118.00, there remained $9.70 of potential profit from a move to the 1127.70 target. That implies that bulls should have stopped themselves out around 1114.70, which would have kept intact the 1:3 risk/reward relationship that I always recommend. The 1127.70 rally target remains valid nonetheless. If it should be exceeded, especially if decisively, that would be reason for bulls to perk up.
