First the good news: December Gold looks like a great bet to reach the 1462.70 target shown — a exhilarating, 10% move from these levels. The not-so-good-news is that the futures could relapse $105 to the green line at 1220 without compromising the bullish look of the weekly chart. That would be a terrific spot to place a ‘mechanical’ bid, assuming we still had the stomach to be in there buying with the futures plummeting. But in the meantime, we’ll need to be on our guard as the correction from the recent high at 1362 gathers steam, as appears likely. The 30-minute chart suggests the decline is bound for a minimum 1317.10 Sunday night. Any lower, however, would beget more downside to 1314.30, a Hidden Pivot whose decisive breach would be warning bulls to back away. Worst case for the next two weeks: 1295.30. _______ UPDATE (Sep 18, 11:14 p.m.): December Gold has fallen to a level where it is starting to look enticing as a possible ‘counterintuitive’ buy. I’d like to see the point ‘C’ low form in the range 1301.10-1303.50 before I give the go-ahead, but in any event the entry trigger will ultimately lie exactly 15 points above ‘C’. That implies $750 of theoretical entry risk per contract, but we may opt to use a ‘camouflage’ entry instead if the move from C to x takes more than a day. Stay tuned to the chat room if you want to stay closely apprised. ________ UPDATE Sep 19, 6:22 p.m.): Tuesday’s dirge didn’t inspire much confidence that buyers are about to take a leap. We’ll give it another day, but a fall to at least 1295.30 is still looking likely. _______ UPDATE (Sep 21, 11:38 p.m.): Gold has gotten pounded recently, but the selloff has generated only a weak impulse leg on the daily chart. If the December contract were to come down a little more, creating a point ‘C’ low near the one at 1283.00 shown in the chart (click here), I’d recommend getting long using a ‘counterintuitive trigger’. That means that if the low were to occur at 1283.00, you would buy-stop yourself into the trade at 1305.30, stop 1282.90. There is more than $2000 of implied entry risk per contract using this strategy, so you would most surely want to convert the CI signal into a camouflage entry trigger with initial risk limited to perhaps $40-$70 per contract. This trade is intended only for those who familiar with both entry tactics, camouflage and counterintuitive. Regardless of whether you do the trade, if it is triggered, that would hold bullish implications up to at least 1326.
