Comex Gold Futures

Gold did everything we might have asked of it yesterday, finally topping precisely at a 1087.00 target. This minor Hidden Pivot was identified and vetted during an impromptu webinar held for chat-roomers in the late morning.  After the close of the day session, the December futures poked up to 1088.50 in the early evening, giving way to a pullback that has been encouragingly shallow so far. My minimum upside target is still 1111.90 over the near term, with 1134.00, a familiar friend, beckoning above it. Night owls attempting to get aboard should focus on 'D' retracement targets that occur on the 3-minute chart. (Please note that there is also implied resistance at 1091.10, a target that comes from the two-minute chart andwhich uses yesterday's vertical thrust from 1060.20 as an impulse leg.  This Hidden Pivot will get vaporized if the rapacious enthusiasm behind yesterday's rally persists.)

It's all just noise until bulls challenge the status quo with a push above of October's peaks, which range from 1068.80 to 1072.00.  My immediate target is still 1111.90, signaled, presumably, by a close above the target's midpoint sibling, 1069.40. Intraday swings have been too wide to board haphazardly, but you should consider using point-X entries that trigger after a second 'C' is formed and all of the overly eager have been stopped out. Such patterns appear to have worked nicely yesterday. _____  UPDATE (1:47 p.m.):  The futures appear to have topped for the day at exactly 1087.00, a Hidden Pivot target flagged during Tuesday morning's impromptu webinar.  That leaves 1111.90 as the next logical stop, although we'll want to pay close attention to any correective patterns that develop in the meantime.

The corrective pattern sketched out here on Friday is not playing out as we'd wanted, since the c-d midpoint where one might have attempted bottom-fishing is too close to last week's lows to be of much value.  The short-term bias remains bullish nonetheless, since the futures' spirited recovery into day's end created an impulse leg on the hourly chart.  If they can push above a midpoint resistance today at 1048.00 without dipping below  1035.40 first, look for follow-through to at least 1053.80, and thence to 1057.70, my best-case target for today. _______ UPDATE(8:35 a.m. EST):  The futures have exceeded the highest target I was able to project for this morning using the lesser charts, implying there are larger forces at work. If so, a Hidden Pivot target at 1111.90 is logical, and the accompanying chart shows its provenance. Two benchmarks can tell us whether the rally is on track to deliver 1111.90:  the October 26 peak at 1060.80 whose breach is needed to refresh the bullish impulse on the hourly chart; and, a close above the 1069.40 midpoint associated with the 1111.90 target. Latecomers may have trouble getting aboard this morning, however, since the correction from overnight highs is not generating any down abc pattern even on the 3-minute chart.

Going strictly by-the-book, the futures would need to pull back to at least 1040.00 to be recharged for another blistering leg up. Thereafter, it would take a booster rally of 5.40 points to put the December contract on course for a shot to as high as 1061.50. Prospectively, and camouflage aside, the most attractive buying opportunity I could see over the next few days would arise from a pattern that traces out a path similar to the one shown in the chart.

A 1019.50  target disseminated via an update yesterday is still my minimum downside objective for the near term. Bottom-fishing there is encouraged, but I'll leave it up to you to furnish a suitable stop-loss. Incidentally, the target, a Hidden Pivot, coincides precisely with a 0.618  retracement of the rally from October 2's low.  If the support fails, however, the next tradable spot on the way down would be 1012.70, also a Hidden Pivot. _______UPDATE (12:46 p.m. EDT): You go, gold! I was skeptical earlier this morning, when gold's rally, promising though it seemed, had yet to exceed even a single prior peak on the hourly chart. After getting second wind, however,  the futures have surpassed no fewer than three external peaks, plus two more look-to-the-lefters along the wall of Monday's nasty decline. This is quite bullish, of course, especially in view of the fact that the rally is unfolding without the December contract having achieved a downside target at 1019.50 that had looked all but ordained to me.  Meanwhile, the 1074 target that was missed by $2 on the last rally stood to be an important one, and it still is. But Gold is at least  suggesting today that it has the energy to re-test the high. If it blows past it, the 1134 pivot that sits above it would become our new minimum objective.  

You have to stretch yesterday's  rally across a one-minute bar chart to see how painful the trek was. It was like walking from the Battery to Harlem in ballet slippers.  By day's end, nothing had changed a mildly bearish, 1020.70 target that I disseminated in the chat room. The so far low at 1032.90 missed that Hidden Pivot's sibling midpoint by just four ticks, so the target itself looks like a good one.  The bearish case would start to unravel, though, if buyers can push this contract above 1045.90 overnight or Wednesday morning. That would imply an impulsive rally above two nice look-to-the-left peaks etched on the way down Monday at, respectively, 1 p.m. and 2 p.m. They are both visible on the 5-minute chart. _______ UPDATE (12:07 p.m. EDT): An analysis done during this morning's tutorial session found good reason to expect December Gold to fall to at least 1019.50 before it can turn. The best shorting opportunity of the day so far is already past, but bottom-fishing at the pivot with a very tight stop-loss is recommended.

Is this the start of a big correction in gold? I have my doubts, although we shouldn't fail to notice that a search for conventional support could take the December contract down to lows in the $980s made in late September/early October.  Mining stocks would get hit harder, of course, but that's not telling you anything you did not know already. We'll have a better idea about how bad the damage is likely to be once we see how the impulse leg from yesterday's high plays out on the hourly chart. So far, however, there is not even a 'b-c' correction to work with. _______ UPDATE (1:45 p.m. EDT):  Moving with a raggedy kind of nastiness, the downtrend has found tentative support within two ticks of a Hidden Pivot midpoint at 1032.50. (A=1060.80, from the hourly chart, 10/26.) The actual low is above the midpoint, and that is mildly encouraging, but if it is decisively breached -- say, by 0.60 points or more -- you could infer that the selling will continue down to at least 1020.70, the 'D' target associated with the midpoint.  A close beneath 1032.50 would likely clinch the climactic selloff.

On Friday, as the week drew to a close, the December futures appeared to be groping for traction near 1053.20, a midpoint HP support.  Some bounces during the afternoon from lows just a few ticks above that pivot produced barely any loft, implying that if the support is breached the correction is likely to continue down to at least 1045.00. If this minor breakdown occurs, a tradable low occurring very near 1045.00 seems assured, since it is backstopped by the conventional support of some lows recorded earlier this month.  You can try bottoming-fish there with a very tight stop-loss, but if it's hit, the next likely stop on the way down would be 1040.70, a Hidden Pivot. Alternatively, to effect a bullish signal on the hourly chart, the futures would need to thrust above 1070.60.  However, it would take just 1064.10 (an ideal spot to look for camouflage) on the very lesser charts to do the trick. _______ UPDATE (1:50 p.m. EDT): 1045.50 held for about half an hour, but the bounce was feeble, and the futures subsequently broke down to a so-far intraday low of 1041.10.  This is most surely bearish for the near term, but it would become more seriously so if today's selloff goes a little farther, exceeding an external low at 1039.00 recorded on October 7. FYI, I am using a 180-minute chart to spot the external lows that matter.

Gold's price action is still too choppy to watch, although the best way to board more or less risklessly for the next leg up would be to hunker down on the 5-minute chart and simply wait for the first speck of evidence of a breakout. We did some hunkering down during yesterday's weekly tutorial session, aware that the somewhat bigger picture -- i.e., the hourly chart -- promised little in the way of excitement.  The day's ups and downs invalidated a 1073.00 rally target identified here yesterday, however, although not the prospect of higher prices in the near future.  A 1080.00 target looks like a turkey shoot in the accompanying graph, but it raises the question of why gold would be consolidating so diligently right now if its next leap is only going to be a 20-pointer.  For now, we'll accept the obvious answer -- that a more important target at 1134 will be in play when buyers return in earnest.