Comex Gold Futures

We should make yesterday's hesitation at 1144.50 our little secret, since the event, which we had predicted precisely, could conceivably provide us with some very useful intelligence in the future concerning Gold's underlying mood. If we were to interpret the pause at this Hidden Pivot  midpoint strictly by-the-book, we could not say yet with confidence whether the highs near the pivot will prove to be the top for gold for the next ten years, or the next ten hours; or whether instead the price of gold is about to embark on a thousand-point rally. What we do know, however, is that if and when the April futures blow past 1144.50,they will become an odds-on  bet to cruise up to at least 1244.50, the 'D' target sibling of our so-far stubborn midpoint. And here is something else we might "know" very shortly:  In the ABC pattern that governs our current analysis (see chart), it has taken April Gold four-and-a-half months to reach the 1144.50 midpoint. That's a long time, and so we shouldn't expect the midpoint to give way in a mere day or two. If  give way it does, however, we would have good reason to infer that the rally is quite powerful -- i.e., well capable of getting to 1244.50  more quickly than we or perhaps anyone but Jim Sinclair might have imagined. This doesn't exactly square with the weak-euro story that now enjoys -- if you'll pardon the expression -- currency in financial circles, but then, that's why we use charts; otherwise, one could blow out all the circuits in one's brain trying to parse the logic of "weak" and "strong" currencies (or the ups and downs of T-Bonds, for that matter).

Yesterday's thrust petered out after poking an inch above the 1144.50 benchmark we'd been using as a minimum upside target.  The action was bullish on balance, but there is still work to be done if buyers are going to take charge. As noted here yesterday, a close above 1144.50 is needed, at least, but just as persuasive would be a push today that surpasses   a key high at 1148.00 that was recorded on January 14.  The nearest minor Hidden Pivot resistance lies at 1156.90, so let's make that our minimum upside objective if and when gold moves decisively above 1144.50.

Gold peaked overnight a dime from the 1144.50 target flagged here earlier.  This is bullish action, of course, but as I noted in the original tout, the April contract will need to close above that Hidden Pivot resistance before it embarks on a new leg up.  Once under way, the rally from that launching pad should be assumed bound for 1244.50 exactly.

With the dollar benefiting from perceptions that other currencies are in even worse shape, and with institutional mindset still riveted on the idea of the dollar as a "safe haven," gold has shown no great eagerness to resume the long-term bull trend.  If and when it does, however, the initial lurch should carry to 1144.50, the midpoint resistance of the pattern shown in the chart.  However, a close above it is needed to light a fire.

Gold mildly disappointed on Friday, hesitating for six long hours before taking on a relatively minor resistance peak on the hourly chart.  While the futures could have pushed past four such peaks by day's end, they instead made gratuitous noise by flagellating beneath the remaining three the entire day. Buyers will have another chance to show their stuff today, and the most bullish outcome we might look for would be an unpaused thrust past the three numbered peaks shown in the chart.  Please note in any case that bulls are in no imminent danger, since it would take a  collapse to 1078.00 to turn the hourly chart bearish.

Today's commentary speculates that the correction from the December 3 high is over.  However, we'll let the evidence speak for itself over the next day or two, since April Gold will need to keep banging out new impulse legs on the hourly chart to prove its mettle. The good news is that there are five closely spaced peaks from the last four days that remain to be dispatched, like ducks in a shooting gallery. Check for a progress report intraday, since I'll be updating this tout on-the-fly. _______ UDPATE (11:44 a.m. EST):  The futures are acting poorly today relative to a current 1124.50 target.  They should get there eventually, since the 1113.90 midpoint posed no problem. But on the hourly chart, the rally is not getting past any prior peaks on the first thrust, and this suggests timidity if not weakness.  However, bulls will have a chance to make up for lost time by spearing two peaks just above, at 1121.70 and 1125.80, in an unpaused thrust.

The futures look bound for 1073.20, a Hidden Pivot support whose provenance is shown in the chart.  Price action Wednesday night would appear to corroborate this, since gold is presently bouncing from a low four ticks beneath the target's sibling midpoint, 1088.90.

A minor midpoint support at 1101.30 looks usable for bottom-fishing with a stop-loss as tight as 1100.70, provided the point 'C' of the pattern, 1108.80, has not been exceeded to the upside first.  A breach of the pivot would imply more short-term weakness to at least 1093.90.  If you're looking for a decisively bullish turn, set an alert today at 1125.90.  _______ UPDATE: The futures sliced through both pivots enroute to a 1090.20 low intraday.  An interim bounce from 1099.60 would have stopped out the long for a trading loss of $60 (or so).

Gold looks so comfortable going bouncy-bouncy off $1100 that one might think its bullion-banker enemies had gone quiet for the moment. An 1148.70 rally target given here earlier remains viable, but if the move doesn't come soon -- say, within the next day or two -- buyers may need to pull back below 1098.10 (aka point 'C') to develop thrust. Night owls can try bottom-fishing at 1109.50 with a very tight stop-loss, but this midpoint support looks a tad too close to Monday's low to be considered a high-confidence support. A breach would imply more downside to 1101.60.  _______ UPDATE (10:40 a.m. EST): The futures are in a so-far weak bounce after sinking overnight to 1101.50, a dime from our target.