gcq10

Hidden Pivot forces appear to be properly aligned for a promised push to 1272.60.  For starters, a minor ABC rally that took the futures somewhat above the  magically resistant 1250.30 slightly overshot its target, 1258.10. Adding to the bullish picture is the fact that the retracement so far is shallow, having created no bearish impulse legs so far even on the 5-minute chart. _______ UPDATE (2:48 a.m. EDT):  The correction went "impulsive" late Thursday night with an abc pattern that projected as low as 1240.20.  If the still-dominant uptrend is eventually to prevail, however, the pullback should go no further than 1243.50, the c-d midpoint. Worst case low if bears should hijack the London fix would be 1237.10, a Hidden Pivot that could be bottom-fished with a stop-loss as tight as three ticks. _______ FURTHER UPDATE (11:04 a.. EDT):  Sweet! The futures bottomed overnight at 1243.10 as they should have, just a few ticks below the midpoint support.  A stop-loss as tight as 50 cents would have worked, so I hope you were able to climb aboard. The rally that followed just before dawn was swift and powerful.

The rally from Monday's low is impulsive enough, but there's a question as to whether the pullback from yesterday's highs was sufficient to recharge August Gold for another leg up.  The futures needed to have pulled back to 1228.13, but they turned higher from 1228.30.  We'll give the bull the benefit of the doubt, but traders should not take the implied target at 1250.30 for granted. Its sibling midpoint lies at 1239.30, so anything above that would be most encouraging. _______ UPDATE (12:23 p.m. EDT):  Gold rallied $20 overnight, topping at exactly 1250.30 this morning.  A shallow pullback during the last two hours appears to have rejuvenated buyers for a push to the next important threshold, 1272.60.

Gold is caught up in several uptrends of different degree, the largest of which promises to deliver 1340.10 (daily chart, A=940.06 on August 17, 2009).  More immediately, however (and also visible on the daily chart)  is a bullish pattern projecting to 1272.60 that is subject to midpoint interference at 1244.40. A two-day close above that Hidden Pivot is needed to make the push to 1272.60 an odds-on bet, but we can still look to board at these levels by hunting for camouflage intraday. If a fetching opportunity to do so  should arise, I may convene an impromptu webinar (announced in the chat room)  as I did yesterday to show you the easiest way aboard.

A 15-point rally today that touches 1237.00 is where the action would start to look encouraging for bulls. However, as noted in an earlier post, it will take a close above 1237.40 to set the futures on a course to at least 1258.60 -- or perhaps 1272.60 -- over the near term. If they head lower, the 1207.00 target flagged here earlier is still valid and can be bottom-fished with a stop-loss as tight as a point.

Two midpoint pivots lie not far above, hidden  impediments that could soon test bulls' mettle.  One is at 1237.40, the other at 1244.40, and the provenance of both is shown in the accompanying chart. Let's stipulate that a two-day close above the lower resistance is needed before we infer more upside to the sibling targets of those numbers -- respectively,  1258.60 and 1272.60

Even as we got long briefly during yesterday's open house and exited the trade shortly thereafter for a small profit, I was warning of more sinkage over the near term to at least 1207.00.  Bid there this morning with a stop-loss as tight as 1206.40 -- or at 1205.60, stop 1204.90 if you want to play it more conservatively, at the risk of missing the turn. ______ UPDATE (2:28 p.m. EDT):  The day session began with an Ali Shuffle that took the futures higher. They traded no lower than 1217.00 overnight, denying us the opportunity to buy at fire-sale prices. The 1207.00 target will remain valid in theory until such time as 1236.90 (aka point 'C') has been exceeded, but this looked likely with the futures rallying so robustly today.  If the rally continues, the key resistance lies at 1244.40, an HP midpoint associated with a 'D' target at 1272.60.

We took a hard look at gold's charts yesterday in several time frames, concluding that the selloff then in progress, nasty though it may have seemed, was as harmless as a dust bunny. We also noticed that the intraday low at 1223.10 was more precisely predictable than I'd known earlier, since it fell exactly on a Hidden Pivot target.  I used a one-off point 'A'  in my calculation, but if I'd substituted the obvious peak instead, the forecast would have nailed the low to-the-tick.  Concerning gold's immediate prospects, I doubt that investors can continue to ignore the urgent press of events for too much longer, and that is why we will look for every possible opportunity to buy near these levels. The most obvious pattern on the hourly chart projects to 1265.50, with an entry trigger at 1233.70 (where August gold is trading at this very moment).  However, the futures are showing no particular energy right now, so I can't recommend arbitrarily jumping on the trade. Instead, I'll suggest looking for camouflage opportunities if and when a rally brings buyers into the mine field of peaks shown in the accompanying chart. FYI, the midpoint pivot of the pattern that projects to 1265.50 is 1244.30, and any move decisively past that resistance would imply the futures are on their way to the higher target.

It wasn't supposed to be a struggle yesterday to reach a Hidden Pivot at 1261.80 -- which, as you will surely know, the futures never did. What we saw instead was a garden variety bull-trap that got sprung overnight.  Now, because the rally died at 1254.50, we'll need to ratchet down our expectations a tad and ask that bulls demonstrate their case one impulse leg at a time.  For starters, we may be able to get a read on this vehicle as early as Tuesday night, since the dainty pattern shown in the chart ought go no lower than the 'p' midpoint -- and certainly no lower than 'D' --  if bulls are to remain in command. The no-sweat scenario would be for the futures to simply pump once or twice today or perhaps tomorrow to reach 1261.80.

Late Monday night (EDT), Gold was holding onto most of the day's gains, trading just $6 off  the highs. My immediate target is 1261.80, as noted in today's commentary, and the implied surge should be presumed under way following a "booster-stage" rally of at least $8.60 beginning from anywhere north of 1225.