The minor Hidden pivot support at 1335.90 where I’d suggested bottom-fishing last night evinced no support whatsoever, stopping out traders who followed my guidance exactly with a loss of $70 per contract. The easy penetration of the support telegraphed the weakness that was to follow. It may also have made traders skittish about trying to catch the eventual low at 1320.40 and the so-far $17 bounce that has ensued. All of this occurred within the context of a bullish pattern projecting to 1416.70 that on Tuesday tripped a ‘mechanical’ buy signal at 1335.30, stop 1308.10. The initial risk of $2700 per contract made this trade too risky to advise, but the signal itself still holds analytical value, since the somewhat subjective idea behind mechanical trades is that they be initiated only on patterns that look like shoe-ins to reach their D targets. That looked to be the case two weeks ago, when August Gold spiked impulsively in response to the Brexit vote. But the consolidation since then, assuming it is a consolidation, has been flaccid and disappointing — so much so that I can advise long entries tonight only if you are able to use camouflage to get aboard. The four-minute chart has plenty of handholds for this purpose if you’re interested.
