Comex Gold Futures

Friday's rally was a breakout in conventional terms, as the accompanying chart shows. However, from a Hidden Pivot perspective it generated no heat at all, only a flaccid peak that failed to surpass any prior tops of significance.  On balance, I'll be cautiously bullish at the bell, but I will also stipulate that a print at 1142.40 is needed today to turn the intraday charts decisively bullish.

The trendline resistance we've been using as a reference point comes in at exactly 1121.00 today (or 1122.30, basis June)  , but if the futures exceed it by more than 3-4 ticks, look for the rally to continue to at least 1125.00 (June=1126.20), a Hidden Pivot  lifted from the 180-minute chart (where A=1090.80 on March 26).  Worst case if sellers romp:  1094.10 (1094.50, basis June), a hidden support that you could buy aggressively with a stop as tight as seven ticks. Entry should be attempted only if the opportunity occurs with at least 90 minutes left in the session.

The trendline that we used as a rally objective yesterday comes in around 1122.20 today, and it still looks like the number to beat.  A push above it -- or even better, a close above it -- would light a fire under buyers.  However, if the futures simply roll over, look for a tradable bottom at exactly 1090.10, a midpoint pivot that we can use for now as a minimum downside objective.  Please note that its breach would portend more downside to as low as 1065.50.

Putting Hidden Pivots aside for a moment, we’ll use a garden-variety trendline as a minimum upside target for today. It comes in around 1123 and looks solid enough to challenge buyers if they should try to make a run for it.  A close above 1123 would be quite bullish, although I’m hard-pressed to offer a precise rally target due to the wishy-washy nature of discernible rally patterns up to the level of the hourly chart.

The daily chart yields a mildly bearish picture for the near-term -- in this context, meaning the next 4-7 days. The outlook would change to very bullish if the futures can hit 1148.25 this week, a feat that would surpass no fewer than three external peaks.  There are no compelling camouflage opportunities in this environment, although a rolldown from around 1120.00 would set up a possible bottom-fishing opportunity near 1089 later in the week.

There is no change in my outlook, given here earlier as follows:  "The pattern from which the 1073.20 target disseminated yesterday was derived looks too pretty not to play out.  You can bottom-fish aggressively, and this time I’ll leave the stop-loss up to you.  It can be as tight as 4-6 ticks.  If the target gets bombed, however, we’ll need to consider the 1044.50 structural low — early February’s bottom — as a minimum downside objective."  Alternatively, a print today at 1096.90 would be most encouraging, since it is where complacent bears who watch the intraday charts closely might start to feel threatened.

 The pattern from which the 1073.20 target disseminated yesterday was derived looks too pretty not to play out as drawn (see inset).  You can bottom-fish aggressively, and this time I'll leave the stop-loss up to you.  It can be as tight as 4-6 ticks.  If the target gets bombed, we'll need to consider the 1044.50 structural low -- early February's bottom -- as a minimum downside objective.

Gold has been screwing the pooch since Christmas, really, and there is therefore no point in getting worked up about intraday swings of $20 or less -- especially when they fail to create fresh bullish or bearish impulse legs on the hourly chart.  Today, that would require, respectively, a print at either 1127.00 or 1088.40.  Bulls looking for something subtler, albeit riskier, can infer a breakout at 1108.90, since that's where the 3-minute chart would turn positive. _______ UPDATE:  The April contract has dipped below 1088.40, creating a bearish inmpulse leg on the daily chart. Although I am not inferring any significant weakness at this point, neither does it portend an imminent rally to new all-time highs. What gold is telling us is that, even though there is good supportive buying underneath, a period of consolidation lies ahead. I wouldn't be surprised to see Gold trading a month from now about where it is today. Most immediately, the futures appeared bound for a minimum 1073.20.

 I jumped the gun when I flagged a bearish target at 1082.70 yesterday morning before another at 1090.00 had been breached. That last number, a Hidden Pivot support, not only survived, it birthed a promising rally that was continuing into the early evening.  The rally will become more than merely promising if and when it exceeds 1109.75, breaching the look-to-the-left peak shown in the chart. Thereafter, we could expect clear sailing to at least 1120.60, the midpoint pivot of an uptrend begun on February 25 from 1088.80.