GCQ13

Although I try to keep subscribers on top of encouraging signs in gold, there's little value in my trying to sugarcoat the technical evidence at hand. To be as straightforward as I can right now, that means acknowledging that August Gold's bounce from the June 28 low at 1179 has not been nearly strong enough to suggest that a major bear market has ended.  More immediately, and from a purely technical standpoint, the weakness of the last few sessions has transformed a promising, bullish impulse leg into a duel between bulls and bears.  To be sure, the larger of the conflicting patterns is intact and still bullish. But as of early Monday morning, the smaller one dictates trading from the short side if scalping.  The chart (see inset) shows what would need to happen for bulls to regain the upper hand -- i.e., a price reversal from p or above that rallies above the red 'A' without pausing for breath.  However, it would take significantly more than that -- specifically, an uncorrected thrust to 1301.80 on the hourly chart, to refresh the bullish energy of the three-day rally we saw from 1179.

Hawk-eyed Pivoteers who scrutinized the chart displayed here yesterday may have noticed that the overnight retracement that primed gold for Monday's strong rally did not quite pull back into the correction window. This means that the bullish impulse leg begun from last Thursday's low at 1179.40 is still technically intact and lacking a b-c leg so far. This is of course bullish -- potentially very bullish -- but we'll need to see how the corrective phase plays out to get an accurate read. Camouflageurs, please note: If things should develop as shown, the 'x' trigger could yield a stellar buying opportunity. ______ UPDATE (July 2, 7:12 p.m. EDT): Today's commentary notes that the $14 selloff did not diminish the bullish look of the 240-minute chart shown.  In fact, the pullback is now sufficient for us to consider the August contract sufficiently recharged for a thrust to as high as 1319.80.  Pivoteers will recognize that that target will remain valid only if Tuesday's 1238.80 low endures. It might not, but I've refreshed the chart so that you can see  nonetheless the pattern that is driving the buying.

Shortly after midnight, the futures have rebounded to within a hair of the 1246.40 pivot where I'd said they'd become an enticing short. However, on the 240-minute chart (see inset), they've also generated a bullish impulse leg that dictates trading from the long side for the time being. (This is why I had originally suggested that shorts be attempted only via camouflage.)  Accordingly, camo traders should watch for a long-entry trigger based on a pattern similar to the one I've sketched hypothetically.  Because buying at X would imply entry risk of at least $1500 per contract, it will be necessary to initiate the trade, camo-style, using a signal from the lesser charts to pare theoretical risk down to more like $40 per contract.  My guess is that you will be able to find such an opportunity only on charts of 3-minute degree or less. If I'm in the chat room when this occurs, I will signal it.  If it happens overnight, however, night owls will be on their own.

There's so much slapdash forecasting going on out there that I decided to take a look for myself.  Now that a clear-as-day Hidden Pivot support at 1219.20 has been obliterated in just 24 hours, we must shift to an even larger pattern in search of a suitably dismal endgame  The pattern shown (in a continuation chart for August Gold) projects an important low at exactly 1004.80, so I'll suggest using this number as a minimum downside objective for the time being.  A rally to the 1246.40 midpoint pivot should be viewed as a belated opportunity to get short, but I'd strongly recommend camouflage if you attempt it, since the midpoint pivot has evinced no precise confirmation so far.

Today's commentary describes exactly what must happen for Comex Gold to generate the most bullish signal we've seen in months. Specifically, the August contract must surpass the two labeled peaks without a corrective pause once the first has been exceeded.  That would create a bullish impulse leg on the hourly chart, with the implication that any subsequent pullback be viewed as a buying opportunity.  Camouflageurs, take note:  If the b-c pullback comes from a high just a tick or two above the 1254.30 peak (#2), that could provide a very subtle -- and therefore low-risk -- way to get aboard.

A 1219.20 target has served us well, tempering any misguided enthusiasm we might have had to attempt bottom-fishing as the price of gold has fallen since early May.  The target, a Hidden Pivot, still looks like a logical place to bid aggressively, albeit with a tight stop-loss.  However, as you can see in the chart (inset), an additional target at 1241.90 derived from a somewhat lower point 'A' beckons as an additional spot to put a speculative bid.  Camouflage is the preferred tactic, but it may be possible to get away with a 1241.90 bid and a stop-loss as tight as 3-4 ticks. If you decide to do it that way, I'd suggest a single-contract trade. _______ UPDATE (June 26, 3:54 a.m. EDT):  Gold is getting slaughtered tonight as usual, with a so-far low at 1242.60 that fell just 0.70 shy of the target given above.  The subsequent $12 bounce was tradable, although only with more difficulty and stress than we should prefer. If you were able to get long near the low and exit on the bounce, then great.  Otherwise, a short to 1219.20 is the play from here.

Gold gutted and disemboweled a minor hidden support at 1353.60 that I'd flagged in the chat room (see inset), shortening the odds of the two-day close below 1353.70 that I'd said would clinch a fall to 1219.20.  There are two structural supports at, respectively, 1338.80 and 1323.00 that seem very likely to at least break the fall, but I expect any rebound from either to be temporary. Even so, and to guard against the hazards of certitude, we'll use 1439.40 as a bullish benchmark, since an impulsive thrust that hits that number would put the good guys back in the driver's seat.

With yesterday's moderate selloff, August Gold approached a ledge from which it could fall a further $135, to a longstanding target at 1219.40, before finding a good bottom.  'Camouflage' traders should position from the short side for now, but if you'd rather watch from the sidelines with fingers crossed, it should be with the hope that buyers push this vehicle above 1370.00 today.  That would turn the lowly one-minute chart impulsively bullish, which, although not much, would be a step in the right  direction. _______ UPDATE (4:05 p.m. EDT):  Nothing to encourage today; for in fact, the futures effortlessly crashed a minor HP support at 1353.60 that I'd flagged in the chat room. As noted here earlier, the 1219.40 bear-market target will become no worse than an even-odds bet if and when August Gold closes for two consecutive days beneath 1353.70.

To filter out mere noise, which has become more than a little tiresome, I'd suggest setting screen alerts above and below the current market at, respectively, 1397.80 and 1368.20.  A print at the higher number would be bullishly impulsive on intraday charts (although not quite on the hourly, as you can see). The lower number is a midpoint support (see inset), and we should be concerned if it's exceeded to the downside by more than 2.50 intraday, or if the futures close beneath it for two consecutive days.  That would put a 1342.00 target in play -- presumably a downpayment on an even more bearish one at 1219.20 that we've held in mind for quite a while.