Comex Gold Futures

The futures struggled in vain yesterday to notch a recovery high above the 928.50 threshold I posted intraday in the chat room. That leaves us still looking for a possible swing low at _____; or if any lower, _____.  Alternatively, if bulls are going to turn this vehicle around, it will take nothing less than a print at 945.10 by no later than Thursday to do the job. _______ UPDATE (3:00 p.m.):  The futures spiked to 944.40, then detumesced almost as swiftly, falling $17 so far. We did not get caught  in this bull trap, however, because the seemingly impresssive rally failed by 0.70 to reach our bullish trigger price at 945.10.

The futures have fallen to within $2 of the _____ pivot we were using as a minimum downside objective for the short term, but in off-hours trading Monday night they appeared capable of pushing the support aside and continuing down to ____.  I'll recommend bottom-fishing there with a minimum 0.40 stop-loss, but if it's hit we should infer more downside to at least _____, a Hidden Pivot that can also be bottom-fished with a very tight stop-loss. Both targets are shown in the accompanying chart.

All signs point moderately lower over the near-term, but there are too many Hidden Pivot supports to choose from to make for compelling bottom-fishing opportunities. If forced to choose the most attractive of the lot, I'd say _____. We'll make that our minimum downside objective for now, subject to negation by a rally today exceeding _____. That would be the most promising sign we've seen on the hourly chart in more than two weeks.

If the futures fall, the first place where I would recommend aggressive bidding is at _____, a Hidden Pivot derived from the somewhat obscure pattern shown in the chart.  Alternatively, it would take a pop to _____ -- one tick above the look-to-the-left peak shown in the chart -- to turn the  lesser oontraday charts bullish (although not the hourly).

We tend to overtrade and over-analyze bullion, especially in the chat room, but if you meditate for a moment on the August futures' daily chart, you'll see that there's not much going on.  In fact, gold is trading almost exactly where it was back in February, notwithstanding some less-than-mellow ups and downs in-between.  My gut feeling is that bullion quotes could hang out for quite  while longer -- and I don't mean for just a few more weeks -- before they blast off for outer space. In that regard, gold is not a particularly good trading vehicle right now in comparison to other tradable issues that have been trending strongly, such as bonds, currencies and crude.  My suggestion to anyone too wrapped up in bullion's hourly price movements would be to get out and see the world, in a manner of speaking; otherwise, you're liable to start imagining things.

The futures will need to punch through a midpoint resistance at 938.00 to convert yesterday's impulsive rally into something we can root for. A Hidden Pivot at ____ would become the minimum upside objective at that point, and just a dime more (i.e., 945.10) would renew the bull trend on the hourly chart for yet another surge.

The 925.50 target has been a while in coming, but I wouldn't buy it on the second pass today after yesterday's near-miss. Instead, I'd recommend bidding down near ____, using a stop-loss just beyond the ____low recorded ____. That could prove to be too obvious a support to work, but even if so, there should be a bounce from above it the first time it is approached.  The safest way to get long would be to use camouflage, which in this instance would be available on a pullback from a tick or two above  a 939.70 peak-let made on the way down yesterday. I have drawn a map of sorts to help you visualize this entry tactic, but keep in mind that its success will depend on how nondescript the point 'B' high is. If it overshoot 939.70 by more than three ticks, that would negate our edge.

The head-and-shoulders pattern flagged here recently appears to be playing out in textbook fashion, although we may be able to improve on the forecast by using a  Hidden Pivot target at _____ that was mentioned here earlier. You can try bottom-fishing there with a stop-loss as tight as _____, but please note that a picture-perfect bottom based on the head-and-shoulders pattern would imply a reversal near ____-- or perhaps even in the low 880s if the selling gets a little crazy. Alternatively, bulls could seize the advantage today, turning the hourly chart positive with a print at _____.

A small pattern that developed during yesterday's briefing turned out to have been the best entry opportunity of the day. The subsequent rally reversed early-morning damage, but without engendering a true impulse leg on the hourly chart.  In fact, we need to drop down to the five-minute bars to find a qualifier (see inset) -- one with a 'C' low that is just a tick higher than 'A'.  That's enough to give us an uptrend to calculate, however, and a c-d midpoint at 959.00 that so far has stymied the August contract's recovery. If and when the futures get past it, we could expect the thrust to continue to at least ____.  However, if weakness prevails, a Hidden Pivot at _____ corroborates the head-and-shoulders implications noted in today's commentary.