Gold has bounced as usual from the depths of disappointment, if not quite the brink of despair. This tripped a ‘counterintuitive’ buy signal at the green line (1340.40) that I very deliberately chose to ignore. Let it be a learning experience if buyers go on to reach the 1371.40 target, particularly if they do so effortlessly. This would become more likely if they get past the 1350.80 midpoint Hidden Pivot without pausing for breath. Once this has occurred, a pullback to 1340.00 would trip a ‘mechanical’ buy signal that we’ll consider on its merits at the appropriate time. _______ UPDATE (Feb 6, 6:32 p.m. EST): Gold has reverted to its wonted sludgepot mode, although the 1350.80 benchmark noted above kept us from waxing unnecessarily enthusiastic about the last rally. Now the futures are headed down to the 1318.40 target shown, a Hidden Pivot support that, just for the hell of it, you could bottom-fish with a 1318.50 bid, stop 1317.90. If it fills, good luck! You’ll be on your own.
_______ UPDATE (Feb 7, 7:36 p.m.): Gold stopped out the 1318.40 trade, but the April contract would become a ‘counterintuitive’ buy in theory if it rallies today to 1327.70. Here’s the chart. _______ UPDATE (Feb 8, 5:59 p.m.): A weak rally tripped a ‘counterintuitive’ buy signal at the somewhat altered price of 1323.20. It could be good for a ride to 1337.30 or even 1365.60, but I am not recommending the trade unless you found it yourself and know how to manage the risk. Please report any fills in the chat room if you’d like me to consider a tracking position. Note: I have projected 3.11% for the Ten-Year Note, currently trading around 2.85%. As long as rates continue to rise, and the dollar to strengthen, my enthusiasm for gold will be lukewarm at best. ‘Counterintuitive’ and ‘mechanical’ trades from the long side might work occasionally, but not as well as when gold is in a strong uptrend._______ UPDATE (Feb 12, 6:25 p.m.): Gold’s rallies have been so pathetic lately that the contrarian in me says it may be about to pop. Experienced Pivoteers only: Use this pattern, with a 1332.00 minimum target, to trade the April contract. For starters, a pullback to 1321.70 would be a mechanical buy, stop 1318.30. _______ UPDATE (Feb 13, 7:48 a.m.): Gold did in fact pop overnight, to a high at 1333.50 that exceeded my target by $1.50. It looks raring to go for another leg up, but we shouldn’t get our expectations too high because of the rally’s so-far failure to leap the 1334.80 ‘external’ peak from 2/7. If and when buyers push above it, they should be presumed bound for the next at 1349.30. Additional peaks are arrayed all the way up to January 25’s Matterhorn at 1370.50. As always, the more easily and decisively each is exceeded, the more likely gold should be presumed to reach the next. Click here for the latest chart.
