April

News of a U.S. air strike on Syria has goosed June Gold to within easy distance of the 1275.80 Hidden Pivot we've been using as a minimum rally target for the last week. The target and the pattern that produced it are sufficiently clear that we should expect a stall precisely at 1275.80. However, if the futures get past it easily, especially if this occurs within hours of first contact, that would imply the trend is likely to continue. It would also be reason to regard any pullback from above the target as a buying opportunity. In the meantime, night owls can use p2=1267.20 (aka the secondary pivot) to set up a 'mechanical' bid, stop 1264.30. Do not attempt this trade unless you are familiar with the simple rules we use to determine whether a proper pullback to the pink line has occurred.

Gold's performance this week has been underwhelming, to say the least, so today's chart, although bullish, sets a low bar. The April contract tripped a mechanical 'buy' signal today, but the initial risk of nearly $500 per contract makes it an unappealing bet, especially considering the tepid price action that had preceded the signal. Instead, I'll suggest we look to do our buying after the futures have popped above the 1256.20 midpoint resistance. That would exceed the labeled peak at 1255.90 as well, generating an encouraging impulse leg on the lesser charts.  Selling Wednesday evening has been lackluster so far, suggesting it won't take much of a push to get things rolling in the right direction.

Another bullion rally laid an egg. So what else is new?  Under the circumstances, I'm featuring a 15-minute chart with a very modest rally target at 1262.80 rather than one that appeared here last week with a 1277 objective. The pattern shown is gnarly enough to work very precisely, and it doesn't hurt that Friday's rally stalled almost precisely at the 1251.80 midpoint Hidden Pivot. That implies that a decisive move past it would reach 1257.30 at least, or 1262.80 if any higher. Judging from the way the futures sold off into Friday's close, however, it is not exactly a foregone conclusion that bulls will take a flying start when trading resumes Sunday evening. Despite this, the pullback to the green line was in theory a 'mechanical' buy, even if in practice we would have used a 'camouflage' entry to reduce the initial risk significantly. _______ UPDATE (Mar 27, 12:22 p.m. EDT): Gold is doing its version of the Acapulco cliff dive after failing to reach my "modest" target at 1262.80. What a stretch! But yes, I did promise I wouldn't diss bullion, only read the charts disinterestedly. In that regard, GCJ 17 would become a so-so-mechanical 'buy' on a pullback to p=1251.80. Odds would be better buying x=1246.20 mechanically, stop 1240.70, but even then I wouldn't look for a subsequent rally to get to the still-obtaining 1262.80 target. _______ UPDATE (March 29, 1:40 a.m.): This evening's dirge has dampened my enthusiasm for bottom-fishing at 1246.20. If you're eager to go against the trend anyway, I'd suggest trying it at 1243.50, two ticks above the minor corrective target shown (click here for chart), with a 1242.90 stop-loss.

Just a small push would put gold on track to hit the 1277.00 target shown. The April contract has stalled precisely at the 1235.90 midpoint Hidden Pivot, meaning a decisive push past it would make the 'D' target an even-odds bet to be reached. Judging from the trajectory of the rally, we might expect this to happen within the next 4-7 trading days.  Also, the target should show very precise stopping power, given the precise pullback from the pattern's midpoint pivot. If it doesn't and the futures surpass it easily on the first try, that would imply the rally is capable of getting legs. Yes, we've been down this path many times before, teased and tempted but ultimately disappointed.  That's why we should simply go by-the-numbers here, using a very compelling ABCD pattern that will give us a firm handle on trend strength. _______ UPDATE (Mar 21, 11:25 a.m. EDT): The decisive push past 1235.90 has put p2=1256.40 in play as out minimum upside target (while also making a pullback to p=1235.90 a 'mechanical' buy in theory. In practice, use the entry trigger to create a 'camouflage' one.) Be alert to a possible stall, or even a significant trend reversal, from p2=1256.40.) _______ UPDATE (Mar 23, 8:20 p.m.): Today's gratuitous feints had no effect on the benchmarks given above.

Buyers extended Wednesday's perplexing rally -- perplexing because if gold were acting normally, it would be falling on Wednesday's headline news of a 25-basis-point rate hike by the Fed. Rising returns on risk-free paper are supposed to attract money away from bullion, right?  Whatever the case, day two of gold's surge conspicuously failed to reach the midpoint Hidden Pivot at 1236.00, never mind punch through it. A decisive move past the pivot would all but guarantee a further push to the 1277.10 target, but there's no point in guessing about whether this will occur. We'll give it another day or two, but the longer it takes for the April contract to move above the red line, assuming it does, the greater the suspicion that this so-far spirited rally is not headed for greatness. It may in fact turn out to be yet one more bull tease/trap. _______ UPDATE (Mar 19, 6:00 p.m. EDT):  Gold disappointed us for the umpteenth time on Friday, going no higher than 1231.50 while oscillating all day long in a tedious, five-point range.  Granted, it looks like a consolidation when viewed on the intraday charts. Regardless, buyers will need to rip through 1236.00 to persuade me they're serious.

Our downside target for the near-term is 1156.60, a 'midpoint' Hidden Pivot that comes from the weekly chart. April Gold had a chance to rally out of the hole this week from a bouncy-looking pivot at 1195.40. Instead, the futures popped for a few measly points before falling back to the support. This is pretty feeble price action, especially considering the rally had round-number support at 1200.00 going for it as well. Under the circumstances, we should expect the futures to continue lower, eventually turning 1200.00 into resistance. I'd return reluctantly to the bullish case, at least for the near term, if this vehicle were to leap above 1214.50 in the next day or two. That would generate a bullish impulse leg on the hourly chart -- one that presumably would be tradable. _______ UPDATE (March 15, 7:47 m. EDT): Gold's loco leap on Fed news is bound for at least 1236.00, the midpoint Hidden Pivot of a rally pattern projecting to as high as 1277.10 over the near term (click here for chart). But count me  skeptical and unenthusiastic for the time being, since the clear-as-day 1156.60 downside target identified above has placed the burden of proof squarely on bulls' slippery shoulders. For starters, they'll need to turn the 1236.00 midpoint resistance into suet to persuade me that this rally is for real.

Wednesday's pummeling generated a bearish impulse leg on the daily chart -- the first time this has occurred since mid-November. If the down-leg shown continues without interruption, exceeding yet another 'external' low at 1182.60 that I've labeled, it would deepen gold's malaise. Even so, we'll remain open-minded to the possibility of 'counterintuitive' buy signal that would come from a rally begun fro just above 1182.60. I'd be skeptical of its chances to reach the 'D' of the a-borning rally pattern, but we could still make a few bucks and enjoy a bullish ride, however fleeting. ______ UPDATE (Mar 9, 6:41 p.m.): Round-number support at 1200.00 is a mighty slender reed for bulls to lean on. Instead, I would make preparations for a fall to at least 1156.60, the midpoint Hidden Pivot support of the pattern shown (see inset, a new chart). _______ UPDATE (Mar 12, 7:42 p.m. EDT): Keep the 1156.50 downside target flagged above well in mind as a minimum downside objective for the next several weeks, but more immediately we can give bulls the benefit of the doubt, since buyers generated a weak impulse leg with Friday's moderate rally. Take encouragement if it exceeds two or more of the labeled peaks  Sunday night or Monday, since that would generate a promising impulse leg on the hourly chart.  _______ UPDATE (Mar 13, 8:48 p.m.): There was little to encourage, since today's upward blip exceeded only the lowermost of the four peaks shown in the chart before dropping back. Nevertheless, if buyers can pop this vehicle decisively above 1207.30 today, I'd make it an odds-on shot to hit 1213.60 over the near term.

There can be little doubt that the futures are about to fall to the 1208.90 target shown, and soon. It should engender a precisely tradable bounce, but I am recommending this only to subscribers who have made a few bucks on the ride south via a short position. If the target, a middling Hidden Pivot support, gives way, especially easily and the first time it is hit, that would strongly imply more slippage to 1182, where a test awaits of a key low recorded there on January 27. _______ UPDATE (Mar 8, 9:33 a.m. EST): The 1208.90 Hidden Pivot  I'd identified evinced little support as the futures fell to a so-far intraday low at 1206.80. The implications are bearish, as noted above.

April Gold tripped a buy signal when trading got under way Sunday night as 1236.00, but upside potential was limited to perhaps $9 over the near term, and so I am not recommending the trade except to night owls who know how to execute a 'camouflage' entry. A push past the 1238.90 midpoint pivot would make the 1244.80 target an even-odds bet.  Until Friday we'd held a single-contract tracking position with a cost basis that had been reduced by profit-taking to 1174.40. The 1225.00 stop-loss triggered late in the day, terminating the position with a theoretical gain of $5060. The details of the trade, with time stamps, are on the chat room Scoreboard. For what it's worth, Porter Stansberry mailed out a letter from Steve Sjuggerud that is calling for an imminent bottom in gold.  For my part, I'll need to see more evidence on the charts. Specifically, if and when the April contract pushes above the election night high of 1343.90, I'll become more receptive to his and other bullion bulls' arguments.