Friday’s upswing reflexively mirrored the decline of stocks, triggering a theoretical buy signal at 1573.40 in February Gold. I say ‘theoretical’ because we seldom use this entry tactic due to its high-risk, low-performance track record. In this case, the implied stop-loss at 1536.30, just below the pattern’s point ‘C’ low, would risk a whopping $3700 per contract. We’ll trade the futures with a bullish bias nonetheless, predicated on an expected move to at least p=1610.30. (A 1732.80 target tied to a bigger pattern is also in play, but we’ll stick with the little stuff for the moment in order to manage risk most efficiently and precisely.) In practice, this will entail using mechanical and rABC set-ups as they become manifest each day. Stay tuned to the Trading Room and Coffee House if you care, since there are a dozen Pivoteers in these rooms at any time who can trade the bejeezus out of gold using patterns big, small and in-between to significantly limit risk. _______ UPDATE (Jan 28, 7:55 a.m. EST): The futures are diving ahead of the opening, evidently despairing over the insane strength of index futures overnight. My hunch is that it could conceivably get worse, but not much, since stocks may already be close to their daily limit for giddiness. _______ UPDATE (Jan 28, 8:58 p.m.): Things did indeed get worse, but not much. Brace yourself for another grin-an-bear-it day if the stock market continues higher. ______ UPDATE (Jan 29, 9:48 p.m.): Gold benefited from an afternoon selloff in stocks and took a spirited upturn toward 1594.60, the D target of the pattern shown in this chart. (Note: The equivalent target for the just activated April contract is 1600.50, with p=1584.20.)
