Comex Gold Futures

In the histrionics of the last few days, gold has shown no great eagerness to decisively reverse the correction from early December's high.  While it is true that Wednesday's sharp rally created a bullish impulse leg on the intraday charts, the follow-through has been less than inspiring.  Let's set the bar at 1148.10 for now so that we don't mistake mere noise for a potentially meaningful resurgence. The rally could chop around as much as it likes, but once it crosses the starting line at  1128.70, the thrust would have to carry, unpaused, past 1148.00. In the meantime, we'll monitor the corrective pattern in the chart closely, since incipient strength would presumably be telegraphed by a turn from the midpoint pivot shown, or from somewhere above it.  The pattern is hypothetical at the moment, since 'C' might not survive the night.

Gold appeared headed for a midpoint pivot at 1094.90, which will remain in play so long as 1106.30 is not revisited.  The sibling D target is at 1083.50.  A rally of $12.70 off a session low would activate a larger bullish pattern that began at 1178.10. ______ UPDATE (11:02 a.m. EST): Gold reversed above the midpoint and exceeded 1106.30, cancelling the targets.  The rally was indeed more than $12.70, which confirmed upside targets at 1123.40 and 1148.70.  The midpoint of this pattern at 1123.40 was punctured minutes ago, signalling more upside to come. ______ FURTHER UPDATE (04:18 p.m. EST): In the chat room, two different intraday patterns were discussed which have identical midpoints at 1128.50, two ticks below the daily and weekly high of 1128.70 made yesterday.  The intraday midpoints are therefore not "hidden," but they presumably add significance to the 1128.70 high.

The critical zone for gold is between 1106.80 and 1112.00, where a cluster of prior highs on the hourly chart intersects with the prominent descending resistance line on the daily chart.  Fireworks could begin in this area, especially with a print exceeding 1112.00.

The rally in the futures is facing four closely-spaced hurdles just above:  the 1098.40 prior high, the round number of 1100, a hidden pivot at 1102.40, and an "external" prior high at 1106.80.  The most bullish prospect immediately in sight would be a thrust exceeding all of these resistance points without pausing for rest. However, until the first, 1098.40, is touched or surpassed, a downside target mentioned here on Friday at 1057.40 will continue to exert magnetic force. ______ UPDATE (05:54 p.m. EST):  Gold traders on duty in the early morning had a chance to scalp about three dollars out of the pullback from two ticks above the 1102.40 pivot, but afterward the target was surpassed, thus completing the pattern and suggesting more upside to come.  The 1057.40 downside target was negated by the rally.

A 1102.40 target disseminated in the chat room Thursday is still viable, but any progress above it would be telegraphing more strength. If this occurs, however, the futures would need to continue up to 1106.90 to refresh the bullish impulse on the hourly chart.  This booster rally would be most powerful if it has traversed the range  1098.50 - 1106.90 without a discernible pause on the hourly chart.  Alternatively, a downtrend could be expected to reach a minimum 1057.40. That Hidden Pivot could be bottom-fished with a 0.50-point stop-loss, provided 1098.40 has not been exceeded to the upside first. ______ UPDATE (10:41 a.m. EST):  A run-up in the Dollar Index to within o.03 points of an important HP resistance has put pressure on Gold this morning, but the futures are still having a technically meaningless inside day so far.  FYI, they'd need to pop above 1148.00 to turn the daily chart bullish.

With whacky swings intraday, the futures have so far resisted the magnetic pull of a 1014.20 downside target given here earlier. They could shoot up to 1085.10 today, or even as high as 1102.40, if this condition persists.  However, if sellers return in force, the first place we could try bottom-fishing aggressively would be 1042.80, the Hidden Pivot midpoint of the pattern shown in the chart. _______ UPDATE (1:22 a.m. EST):  Although the dollar was getting whacked early Thursday morning, Gold was not reciprocating.  Bullion seems likely to win this showdown, but it is evidently going to take more than the 0.32-point drop that has occurred so far tonight in the Dollar Index (DXY) to stoke the requisite buying. ______ FURTHER UPDATE (3:06 p.m. EST):  1102.40, here we come!  This Hidden Pivot target was not proffered as a great place to get short, but rather as a bullish price objective to buck up anyone thinking about getting long on the way up.  The pattern itself is a rule-breaker, as I've tried to make clear, and the target is therefore not a high-odds place to jump in the way.

The 1091.60 rally target has been slow in coming, but we'll stick with it for now because it's pretty and it's all we've got. This Hidden Pivot sits in the middle of a void, so it can be shorted with a stop-loss as tight as 0.50 points.  Looking at a bigger picture, a 1014.20  downside target is still viable and will remain so unless 1166.70 is exceeded to the upside.

As we found in the E-Mini S&P, all signs point lower.  The 1037.90 target I'd employ for bottom-fishing seems out of range for today, but we should use it nonetheless as a minimum downside objective for the next 2-3 days.  It's not a healthy sign that my second choice, 1052.80, got pasted on Friday.  Enjoy a rally if it comes, but get your guard up if it approaches 1081.90.  That's a Hidden Pivot support turned into resistance by last week's minicrash, and it would be a great place for DaBoyz to spring a bull trap. Pivoteers can find it on the 180-minute chart, where A=1163.40 on January 11. _______  UPDATE (8:59 a.m. EST):  Who are we to complain if index futures are leading Gold around by the nose?  The April contract now looks bound for at least 1091.60 (subject to the caveat mentioned above), a midpoint resistance at 1076.70 having become nominal support.

A fleeting lunge to 1073.00 Sunday night has refreshed the impulsiveness of Friday's week-ending recovery rally, but it will now require a bit more of a pullback to recharge the futures for a strong follow-through.  To be more precise, the futures will need to come down to at least 1060.40 (versus an actual 1065.40 so far) in order to be in the "window" for another leg up.  Thereafter, it would take a thrust of at least 7.20 to get off the launching pad and be on track to reach a short-term high near 1090.