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I cannot recall ever having seen a selloff obliterate Hidden Pivot supports as easily as yesterday's landslide did. I'd proffered 1212.80 target as a place to "back up the truck" because it was an exceptionally clear and compelling target.  In the actual event, the futures took a brief, $7 bounce from two ticks above that number...and that was it.  The fact that the rally died after just a few bars warned of the carnage yet to come.  The selling was best explained by Dan Norcini at Jim Sinclair's web site. He  saw it as an unwind of gold/euro hedges.  The euro soared yesterday, apparently buoyed by the idiotic notion-of-the-day -- that perhaps Europe's financial situation is not so bad as was thought earlier ("earlier," meaning, perhaps, the day before).  This is nonsense, since Europe is in the same deflationary bog as the U.S., irrespective of whether they take "austerity" to heart or instead choose to run the printing presses at full steam.  Equally nonsensical was the idea that gold was due for a thrashing just because of a (presumably fleeting) blip in sentiment favoring the euro. In fact, Gold has been rising -- and will continue to rise, once the hysteria we witnessed yesterday subsides -- simply because the entire global financial system is being kept (barely) afloat by lies, hubris and an epidemic of delusions.  Ditto for the dollar and U.S. Treasurys -- possibly the worst excuse for "safety" that an investment world gone insane could conceive of.  We'll give Dan Norcini the last word, since his assessment seems dead-on: "Gold is not going to lose its safe haven status because we experience a day of trade unwinding on a large scale. When the focus shifts back to the woes involving the health of the US currency, gold’s fortunes will revive and it will begin moving higher." Concerning the technical picture, there is no question that yesterday's slide

The futures remain in a delicate recovery, having topped two ticks beneath the 1249.00 rally target flagged here yesterday.  Odds favor more weakness over the near term. Even so, I'll recommend bidding 1230.80, stop 1230.40, if the futures fall to that price without having exceeded 1248.80 to the upside. The rationale for this trade is shown in the accompanying chart. _______ UPDATE (10:36 a.m. EDT):  A flurry of weakness stopped us out this morning for a loss of about $40.  Our 1230.80 target was a midpoint pivot tied to a 'D' at 1212.80 that should be viewed as a "back-up-the-truck" buying opportunity. The next stop below is 1223.30, but it's possible the futures will hold here, at least for today, since they may simply be homing in on the "structural" support represented by Tuesday's low, 1227.60. _______ UPDATE (1:10 p.m. EDT):  The decisive breach of 1212.80 by $7 has created a bearish impulse leg of daily-chart degree. The last time this occurred was exactly a year ago. Gold subsequently rallied for a few days and took one more nasty leg down before embarking two weeks later on the powerful rally that achieved the recent high at 1266.  _______ UPDATE (2:41 p.m. EDT):  The tradable low came at 1213.00, two ticks above the pivot, but produced a bounce of just $5 before the futures relapsed and headed much lower. Breakdown stops could have been anywhere from 1207.30 to 1205.50, yielding a loss of as much as $750 per contract if no partial profits were taken on the bounce.  I would not suggest carrying a position overnight, since the selling here is the most persistent and powerful that I can ever recall, blowing out Hidden Pivot supports effortlessly.

The futures are recovering gingerly after a two-day strafing that appears to have ended yesterday morning. Most immediately, a minor ABC rally pattern pointed to a Hidden Pivot resistance at 1249.00, assuming its 'p' sibling at 1244.20 can be easily surmounted.  It will take a bit more, however, to put bulls on the offensive. Specifically, the futures must rally today above a 1252.60 "look-to-the-left" peak visible on the 5-minute chart. The resistance was created during Monday's sharp break, and it will need to be overcome if the futures are to refresh the bull trend on the intraday charts.

Yesterday's downdraft was undeniably nasty, but it would take a print below 1216.20 today to make it officially worrisome. That's where the selloff would become bearishly impulsive on the daily chart, as shown in the inset. Keep in mind, therefore, that a breach of low #1, followed by a rally and subsequent breach of low#2, would imply short-term corrective action rather than the start of an intermediate-term downtrend. Most immediately, the futures will have a chance to turn from 1233.50, a midpoint pivot, or perhaps from its 'd' sibling at 1225.30.  They could also put bulls instantly on the offensive with an upthrust this morning exceeding 1244.40, a look-to-the-left peak from Monday recorded on the way down on the 1-minute chart.

All signs were "go" as trading drew to a close on Friday, with a Hidden Pivot at 1272.60 still our minimum objective for the near term. If the futures trade more than 0.50 above that number intraday, however, or close above it, you can be confident that the rally will continue to at least 1293.50. The pullback from that last Hidden Pivot should be precise because its sibling at 1230.75 has already shown precise stopping power. Accordingly, if you plan to adjust your long position or take partial profits, don't assume that an instant test of resistance at 1300 is a done deal merely because the futures have pushed above 1290. _______ UPDATE 1:40 p.m. EDT):  Yet another gratuitous shakedown, and it's enough to make one wonder whether these orchestrated selloffs need to be so brutal just to make a point. The drop was close to $30, and it created a nasty impulse leg on the hourly chart. The low so far has been 1235.90, but the selling would need to hit 1216.10 before Wednesday to become impulsive on the daily chart.  For what it's worth, the mini-avalanche was telegraphed to some extent by the failure of the intraday high to surpass a secondary peak at 1264.80 recorded on June 21.  I remarked on this in the chat room when gold was down just $5, but I did not imagine the severity of the selling that was yet to come.

Although August Gold's sharp intraday recovery yesterday exceeded an imposing resistance peak at 1247.40, the rally failed by three ticks to get past a Hidden Pivot at 1249.70 that I'd implied was even more important.  Not to worry, though.  The pullback from the day's high at 1249.50 has been shallow so far, hinting that bulls are ready to take on whatever supply the bad guys throw at it on Friday. A thrust past 1250.50 will indicate liftoff toward two bullish targets: a minor one at 1260.90, and a more important one at 1272.60 flagged here earlier.

The futures flirted yesterday with a 1235.00 danger zone noted by our colleague Ross Clark, pulling just above it at day's end. I made reference to his analysis in the chat room (logged at 12:48 p.m.), noting that Hidden Pivot analysis sees a fall to at least 1214.20 as very likely. We'll be better able to determine whether the weakness is apt to persist beyond that threshold by monitoring price action at the support. If it is decisively breached, however, that would indicate a likely fall into the $1100s.  Please note that it would take a dip below 1157.60 to jeopardize the daily chart's long-term bullishness. (Ross's bearish outcome calls for $1160 or lower.) For bulls to regain control decisively would take a push to at least 1258.00 today. _____ UPDATE (11:04 a.m. EDT):  For whatever reason, Gold has whipped around today and is close to challenging yesterday's high, 1247.40. A move above it would negate the 1214.20 downside target, but I'd like to see the rally clear 1249.70 decisively before I infer that the correction is over.  That number is the Hidden Pivot midpoint resistance of a rally pattern projecting to 1274.20 (hourly chart, A=1217.50 on June 14).

The hourly chart is still working on the bearish impulse leg begun Monday, implying that if the downtrend continues, we could hazard a bid at 1227.40, the midpoint support shown in the chart. The trade will remain valid as long as the point 'C' of the pattern, 1244.00, has not been exceeded. Please note that the futures would be indicating more downside to as low as 1210.80 if they close beneath 1227.40 or trade more than 2.50 points below it intraday.  A six-tick stop-loss is suggested for the 1227.40 bid.  Alternatively, a bullish thrust would be unimpeded to 1250.70, a midpoint resistance tied to a 'D' target at 1269.80. The first hint that bulls have regained control would come on a 1244.40 print, one tick above a look-to-the-left peak that is nicely visible on the 15m chart. ______ UPDATE (10:38 a.m. EDT): The futures ascended to a higher platform overnight before diving this morning, so we did nothing on the order. The new pattern projects to 1214.20, and because the selling has already breached the 1230.80 midpoint, we should infer the target is likely to be reached. To turn things around, bulls would need to punch the futures up to at least 1237.20 within the next couple of hours or or so.

It may prove significant that the futures have created a bearish impulse leg on the hourly chart without having quite achieved their last rally target, 1272.60.  If this had happened to some broad stock-index such as the Diamonds or SPY, I'd have given bulls last rites.  But because the selloff occurred in Gold, we'll treat it with a little more skepticism, especially since the ostensible reason for bullion's plunge is the crackpot notion that China's revaluation of the yuan will somehow turn the tide for a world sinking deeper each week into full-blown debt deflation.  Regarding the hourly chart, we'll need to see a rally and then a c-d decline to a Hidden Pivot midpoint before we are able to confidently assess the resolve of sellers. For now, though, I see the selling as having been orchestrated by strong-handed buyers rather than  the onset of something serious.