Comex Gold Futures

The pullback from yesterday's final day-session peak was bearishly impulsive, as you can see in the hourly chart, since it exceeded the required internal and external prior lows. This has negative implications for the near-term, but they would be negated by a snap-back rally today that exceeds 1222.40. That would give us "dueling" impulse legs and a technical picture implying that bulls are still in charge.  A less convincing show of confidence would come if the rally in progress early Friday morning fails to clear any peaks at all, then falls to a midpoint support and reverses.  These possibilities are sketched out in the accompanying chart and should be monitored closely intraday. My gut feeling is that the futures will need to spend more time in purgatory before they take on the 1237.90 pivot noted here earlier.  A bearish outlook for the near-term would become more compelling if the futures were to create a southbound impulse leg on the hourly chart for a second day in a row.

Bulls should have been heartened to see gold so resilient on a day when the dollar stood firm. The payoff appears to be coming this evening, with a bullish thrust by the February futures above the day's range. I still like 1227.90 as a minimum upside target, or perhaps 1230.00 if any higher, but we should turn cautious when that range is reached. It seems likely to show some stopping power, but if none is discernible that would sharpen the focus on the 1337.00 target given here earlier.

Too bad December Gold couldn't close above $1200, since it would have turned up the heat on the cabal that has been struggling in vain to hold prices down. They'll have their hands full on Wednesday nonetheless, given the niggardly correction from Tuesday's high, 1204.00. For now, let's use a 1227.90 target that comes from the hourly chart (see inset). The midpoint support lies at 1181.80, so a pullback to that price should be used as a buying opportunity if there's a minor reversal-rally pattern to leverage (i.e., "camouflage").

We should give it a few more days for bulls and bears to digest Friday's drama, but my expectation is that the next big thrust will be higher rather than lower.  In the meantime, we can put in a stink bid at 1156.40, stop 1155.90, in case the March contract should swoon again.  That's the Hidden Pivot midpoint of the pattern shown in the chart, and it would be invalidated by a move overnight above 1185.00, point 'C'. That's quite possible, since a very minor rally pattern in play at around 11 p.m. EST projected to 1188.80. ______ UPDATE (3:36 p.m. EST):  Another ugly day for the bullion bankers and commercials as Gold rallied a brisk $24 to peak at $1204.  The pullback has been too shallow to give the scoundrels any comfort, so look for them to inadvertently befriend bulls once again on Wednesday as they scramble for cover. 

For all of December Gold's histrionics on Friday, the intraday low failed to take out any prior lows on the daily chart; it therefore didn't even come close to creating a bearish impulse leg. Moreover, the first of the prior lows should have been a piece of cake, since it comprised a single-bar bottom anchoring a modest, three-day consolidation (see chart). This low would not likely have provided much support if it had been tested, but in the end, sellers looking down the barrel of a pea-shooter  declined to shoot it out.  These are all subjective considerations, but they contribute to a picture that was bullish to begin with and which has now become moreso because sellers showed such cowardice. Looking just ahead, we should note that the futures ended the week with Friday's sharp recovery still in motion. The nearest unachieved Hidden Pivot worth noting lies  at 1183.50 -- the target of a minor uptrend on the three-minute chart, where A=1167.70 (Friday, 10:33 a.m. EST).  Day-traders should make entry using A-B impulse legs on the lesser charts that have surpassed look-to-the-left peaks, of which there are many.

Gold telegraphed tonight's rally through resistance by an earlier failure to reach the 'd' target of its initial correction and by the shallowness of that correction.  A secondary target at 1185.50 could still contain the rally, and bulls should not break out the bubbly until it is left behind in the dust.  More immediately, as of 1:25 a.m. EST, the futures were just a tad shy of a minor Hidden Pivot at 1178.90, but any progress above it would put the 1185.50 pivot in immediate play.  Here are two other minor pivots where we should expect a pullback that the nimble can trade: 1180.40 and 1199.20

The futures turned up tentatively after make a run at an 1155.00 downside target that was missed by $2.70. This is bullish as far as it goes, but it would take a print Monday night at 1168.90  to suggest that buyers are not terribly intimidated by the 1174.90 resistance pivot we've been using for so long. I've hung out a headline target at 1337.00 if it should get shredded, but I am not expecting this, at least not so soon after the lower pivot was achieved.  Keep in mind as well that the futures could feint to 1185.50 without affecting the odds of a serious correction.

A key target at 1174.90 remains viable, but we'll focus on a more conservative objective for now at 1155.60. That's a Hidden Pivot, and it comes from the pattern shown in the accompanying chart.  An easy move past it would activate another at 1158.20. These two numbers can be used by scalpers, but from an analytical standpoint any lack of resistance will confirm a swift finishing stroke to 1174.90.

December Gold appeared to be struggling Thursday night to seize the advantage afforded by its breach of a midpoint resistance at 1142.80.  The sibling target is 1155.60, and we should therefore use that Hidden Pivot as a minimum rally objective for the near term. Alternatively, a dip below 1125.2o today -- unexpected at the moment, based on the technical evidence -- would turn the hourly chart bearish.