Comex Gold Futures

All charts point higher, but it will be most useful to settle on one that can tell us how high the current, minor cycle is likely to go.  The pattern I like comes from the weekly chart (see inset) and yields a Hidden Pivot target at 1208.80. We'll use that number as our minimum upside objective for the near term -- and please note that I consider this a very high-confidence call.  A pullback  to 1166.60 should be considered felicitous, since that's the midpoint associated with our rally target and therefore an excellent place to attempt to augment long positions.

A minor Hidden Pivot resistance at 1192.60 can serve as our minimum upside objective for the moment, but any higher would imply a finishing stroke to at least 1208.90. We hit the jackpot yesterday with a trading recommendation that went out late at night and which was based on a minor retracement in the after-hours.  Just 50 cents of initial risk could have gotten one aboard for a $10 ride.  June Gold is showing no such softness this evening, however, so night owls may have to buy a minor rally pattern rather than waiting, as we did last night, for a pullback to reach its 'd' target.

We'll use a Hidden Pivot at 1180.90 as our minimum upside projection for the moment. Since the pattern that produced that target is far from intuitive, I've reproduced a chart alongside to show the provenance of  'D'.  You can short this number with a stop-loss as tight as six ticks, but boarding for the ride north will be trickier, requiring a nuanced approach (i.e., camouflage) on the 3-minute chart. _______ UPDATE (11:15 a.m. EDT):  An 1162.70 pivot noted in "Today's Action"  worked beautifully as a place to go bottom-fishing, since it caught the low of a $10 bounce within 50 cents.

June Gold came through for us with flying colors yesterday, achieving every item on our technical wish list.  I did not stipulate that the futures had to close above the look-to-the-left peak at 1171.80, only that they exceed that number -- as indeed they did.  While this is no guarantee of significantly higher prices over the near term, it does give bulls a little more breathing room, since it would now take a print below 1132.00 to even faintly darken the outlook, and  below 1102.40 (aka "The Trouble Zone") to turn the picture outright bearish. If buyers are to seize the advantage in the days ahead, we should see price action that roughly conforms to what I've drawn on the chart.

A look-to-the-left peak at 1171.80 (12/07/09) is still the number to beat, since a breach would create a very promising bullish impulse leg on the intraday charts. A move through the resistance would also make amends for the failure of the last attempt, which died at 1170.70. There is one more resistance worth noting: 1166.60, a Hidden Pivot lifted from the daily chart (A=1086.10 on March 24). Its 'D' sibling lies at 1208.90.

Gold rallied sharply on Friday but still fell a smidgen shy of our bullish benchmark.  The shortfall is likely to be remedied today, since it will require only a further push of 40 cents to do the trick.  Thereafter, you should use 1171.50 as a first line of resistance, then 1192.60 as a minimum objective following a close above 1171.50.  Both are Hidden Pivots derived from the hourly chart, where A=either 1123.50 (4/6) or 1102.40 (3/30).

A trendline noted in the chat room yesterday by erstwhile cheese farmer 'Nutcase' looks magnetic, so we shouldn't be too surprised if June Gold tests the line before the next rally.  With an upward slope of about $7 per day, trendline support will come in around 1115.00 today and 1122.00 on Monday. If the rally occurs without such a test, however, it would still need to get past the 1171.80 resistance noted here earlier to get seriously airborne.  More immediately, the futures were in a minor uptrend at day's end with the potential to reach 1150.50.  The move would be subject to midpoint resistance at 1145.60. Alternatively my worst-case number is 1119.90, a Hidden Pivot support that can be bottom-fished with a stop-loss as tight as 80 cents. ______UPDATE (7:15 p.m. EDT):  The 1150.50 rally target has been trashed by a nasty downdraft that took out the point 'C' low at 1140.70. The nearest support is 1138.30, a Hidden Pivot midpoint. _______ FURTHER UPDATE:  Gold got quite a goosing this morning and was up $15 when it peaked at 1157.90.  The rally was not sufficient to create a bullish impulse leg on the hourly chart, however -- that would have taken a print at 1158.90 -- so let's be pleased but unexcited and leave it at that.

June Gold's old nemesis at 1171.80 has returned to challenge the mettle of bulls once again.  Check out the chart if your memory needs refreshing.  Although this is not a conventional or even a look-to-the-left peak because there is no stick-down low preceding it, it validated itself by precisely containing the last rally top --  1170.70 on April 12.  Bears would be seriously on the ropes if the two peaks shown were to be exceeded by an unbroken thrust on the daily chart.  But it is equally valid to say that bulls should avoid all hubris until such time as the peaks have been breached.  In the meantime, we can take encouragement from the fact that Gold is working on a bullish impulse leg to begin with -- even without having surpassed the peaks #1 and #2 (respectively, an internal and an external).

A midpoint support at 1131.10 is valueless for purposes of bottom-fishing because it coincides with a key low recorded on Monday; however, it can serve as a minimum downside target if sellers dominate today.  If it is buyers who are in charge, the key resistance is a Hidden Pivot midpoint at 1145.70.  Its breach would telegraph a move through yesterday's high, 1146.80, followed by a finishing stroke to 1153.50. ______ UPDATE (2:00 p.m. EDT):  The futures are on track to hit 1153.50, but they took a roundabout route. After marginally exceeding the 1145.70 resistance in the wee hours Wednesday, it took buyers 13 hours to get second wind.  They've since pushed the June contract as high as 1151.20 today.