It’s late Sunday night, and the futures are up $18 at the moment. To avoid having emotions cloud our judgment, however, I’ll suggest viewing the rally with cynical detachment rather than hope. In the first place, the move has come off a low that crushed some important Hidden Pivot supports at, respectively, 1198.00 and 1194.00. And for two, the downtrend that preceded it breached every significant low recorded since February. That makes the downtrend powerfully impulsive on the daily chart. Under the circumstances, we should look for opportune spots to get short rather than watching prayerfully from the sidelines. A rally exceeding the small peak at 1224.00 would turn the daily chart bullish again, at least in theory, but we should set the bar much higher to be sure. Specifically, I’ll stipulate that the futures close for two consecutive bars above the red line before we wax enthusiastic again about gold’s long-term prospects. That’s $130 above current levels, so bulls have their work cut out for them.
