We need to keep reminding ourselves that even during those frustrating cycles when gold is being treated like garbage by investors, it is still in a long-term bull market. However, it has been so slow in developing that even hard-core bulls will find their patience tested to the limit. Accumulation is the strategy of choice, coupled with perseverance and discipline to make the ordeal seem worth the wait. To that end, we should be prepared for the correction begun from May's all-time high at 2112 to come down t0 at least 1908 before bulls are sufficiently rested to mount another charge (of the Light Brigade?). The corrective segment shown in the chart has yet to trip a 'mechanical' short, but it would on a rally to 1983.40. Check for details in the chat room if the set-up should ripen, since the $10,000 theoretical entry risk on four contracts can be cut by 95% if we do it right.
As usual, Gold is taking its sweet old time going anywhere, never mind to the 2027 midpoint Hidden Pivot of the pattern shown. We'll need to see how buyers handle this resistance before we can judge the likelihood of a rally to the 2154.20 target. The August contract is on a theoretical 'buy' signal at the moment, but the only way to use it with risk tightly controlled would be to set up a 'camo' trigger on an intraday chart. Stay tuned to the chat room if you care, since I may be able to signal a timely opportunity tied to this vehicle's wonted morning reversals. _______ UPDATE (Aug 4, 8:43 a.m.): Gold has slipped back into its accustomed 'garbage mode', in a bull market more reminiscent of The Flying Dutchman in search of land than its 1970s heyday. Here's a chart that shows an 1895.10 downside target for the October contract.
August Gold spent the week consolidating just above the green line, where a theoretical buy signal triggered the previous week. We should assume minimum upside to p=2028.30, a not very ambitious target but one that would nonetheless fix $2000 in traders minds as support. That's assuming the futures can close for at least two consecutive weeks above the midpoint Hidden Pivot (p). They should be trade with a bullish bias in the meantime, using 'reverse-pattern' triggers drawn from the lesser charts. Stay tuned to the chat room and email 'Notifications' if you trade this vehicle.
Although I am watching August Silver closely for signs of a bullish breakout, August Gold's price action calls unambiguously for a 'mechanical' short using the green line. I've suggested paper-trading this one, but I will be tracking it closely nonetheless in order to effect a 'camouflage' short that would limit entry risk to a practical minimum. As of now, that implies using an $8.50 trigger interval off any rally that hits 1969.40 or higher. ________UPDATE (Jul 18, 6:23 p.m.): The paper short would trigger on a drop to 1979.50, but I am no longer recommending it, even if your camo 'chops' are up to snuff. Bulls should want to see the trade stopped out, since the 'textbook' features of the 'mechanical' set-up made it a pretty good bet. If the short doesn't work, it would add to the evidence that bulls are finally in command again. ______ UPDATE (Jul 20, 1:45 p.m.): Our paper short is profitable, and that is not a happy sign for gold. We'll keep a close eye on gold, since the picture would darken further if minor abcd patterns start to exceed their d targets, or even p midpoints. _________ UPDATE (Jul 21, 12:19 a.m.): Thursday's impulsive selloff points toward 1957.70 (60-min, A=1985,90 on 7-20 at 7:20 a.m.). Now let's see if sellers have grown a pair.
The unorthodox reverse-pattern shown has worked so well, generating three profitable 'mechanical' buy signals at the green line, that we should confidently expect it to produce yet another winner when it trips a 'mechanical' short at D=79.68. The trade will require some adroit calculations in real time, however, since the most efficient trigger interval that I can come up with at the moment is 78 cents, implying entry risk of at least $780 per contract.
August Gold has struggled for loft after bouncing from just beneath a Hidden Pivot support at 1903.90 that I'd flagged on June 29. Bullion tends to taunt us with weakness before rallying sharply (albeit fleetingly) to nowhere in particular. In this case, however, it looks like it wants to go lower in order to get better footing for a sustained uptrend. We can use the 1875.00 downside target shown for now, but we'll switch to a more bullish outlook for trading purposes if buyers can push above an external peak at 1949.00 recorded two weeks ago. _______ UPDATE (Jul 13, 10:15 a.m.): The futures tripped a 'mechanical' short when they came within a hair of x=1969.30 at 8:35. The subsequent $12 dive could have been shorted with a reverse-pattern trigger, but I am suggesting only that you paper-trade this one. If it is stopped out with a rally above the pattern's 'C' high, that would be the most bullish event we've seen in a while. Even then, we shouldn't trust the rally until it has created a series of impulse legs on the lesser charts.
August Crude's histrionics have been easily tradeable, most recently via a nasty dive on Thursday from within three cents of a rally target advertised here when fresh touts went out to you last Sunday evening. The futures rampaged to a strong close on Friday that could get legs, but more immediately they will face resistance from the 74.29 Hidden Pivot resistance shown in this chart. Pivoteers familiar with reverse-pattern (rABC) trades can try it with a trigger interval no greater than 16 cents, but be alert to a possible short squeeze that blows the target to smithereens when trading resumes this evening.
August Gold turned from nearly exactly where expected, a 1903.90 Hidden Pivot support of middling importance. The actual low occurred at 1900.60, strongly suggesting that our bid was front-run by others using the same, visually obvious pattern we employed to project a downside target. If it turns out that too many smart guys got aboard for this reason, we should expect the futures to screw 'em all by stopping out the 1900.60 low before embarking on a sustained rally. This should have a positive impact on our ability to trade this vehicle profitably, since exploiting fake-outs is our forte. In any event, an alternative target at 1875.00 will remain viable, at least in theory, until such time as 2000.70 (i.e., an alternative 'C' high) is exceeded to the upside.
The bullish pattern shown is so fetchingly gnarly that we could expect it to work a second time for a 'mechanical' buy if the futures revisit the green line (x=69.78). Another feature of the pattern is that it looks likely to reach the D target at 72.31, notwithstanding that the initial upside penetration of the midpoint Hidden Pivot was feeble. A run-up to the target would be a shame, especially if it is merely prelude to an even bigger rally, since gas prices have recently fallen below the $3 level for the first time in a long while. They hit $2.92 last week in the rural North Carolina town I am visiting, but if my forecast has got it right, pump prices will soon be headed once again above $3.00.
August Gold looks bound for a minimum 1903.90, but if that Hidden Pivot support gives way, look for the downtrend to continue to at least 1875.00. (A related p2 support at 1906.40 could also engender a precise, tradeable bounce). Both of those numbers can be bottom-fished with 'reverse' patterns and a theoretical trigger interval of $11. Since that would imply entry risk of more than $4000 on four contracts, you should initiate the trade only via an rABC set-up on the 15-minute chart or less and initial risk held to no more than $200 per contract.
