Gold’s dive on Tuesday crashed numerous minor Hidden Pivot supports on the way down, but sellers may struggle a bit harder to take out the 1222.30 target shown. Accordingly, I’ll recommend bidding 1222.50, stop 1221.90, to get long. If you want to avoid the known risks of trying to catch a falling piano, then I’d suggest using ‘camouflage’ to initiate. This implies looking for the upturn in the form of an abc pattern that is easily discernible on a 5-minute bar chart or less. Lest bulls begin to despair, they should keep in mind that June Gold would need to fall a further $80, to 1146.00, before it has retraced 0.618 of the 2016 rally. ______ UPDATE (May 25, 8:53 a.m. ET): A 1222.50 bid would have been stopped out, since the low was 1220.50. ‘Camouflage’ on the 1-minute chart could have gotten one aboard at 1221.60 (6:08 a.m.), but it’s doubtful the position, even after partial-profit-taking, would have survived the subsequent swoon to 1220.60 at 6:37 a.m. Now, if the futures take out the so-far low at 1220.50, they’ll likely be going to 1215.40. _______ UPDATE (7:11 p.m.): June Gold could always surprise us with an impulsive rally, which would require a thrust exceeding 1228.40, or 1237.60 for good measure. But the way things have been going, I’m more inclined to think the 1215.40 target given above will be reached before the futures can turn around. Don’t despair quite yet, however, since the decline would need to continue for another $76, to $1146, to retrace a not unusual 61.8% of the powerful rally begun last December from $1048. _______ UPDATE (May 26, 5:34 p.m.): No change.
