GCZ10

I was tempted to not update my guidance for gold, since there is so little to say at the moment. When Monday's high failed by two ticks to surpass the previous Wednesday's high, it created some minor short-term negatives in an otherwise bullish picture.  We've got haphazardly dueling impulse legs on the lesser charts, suggesting more turgid action ahead, so let's simply stipulate that the futures must print 1159.00 (our old friend again, the "soft" peak from the hourly chart) before we rouse ourselves to action.

I've reproduced December Gold's three-minute chart in a size intended to make you squint a little, that you might more easily parse the visual logic of the correction from Monday's highs.  Can you see how taking those few steps back helps isolate a "good" pattern so that, paradoxically, its imposed smallness makes it seem all the more compelling? This technique goes back to a point that I have emphasized repeatedly in the seminars and during tutorial sessions -- that in general we should try to favor the visual over the technical so that we don't become bollixed up in nettlesome 'k-A' calculations, cagey impulse legs that may or may not be just right, and ABC coordinates that mock or disparage The Rules.  Thus do we find a 'P' midpoint here at 1336.70 that could be useful to night owls interested in bottom-fishing. (Some may also get the feeling that the sideways action of the right-most three hours distracted the downtrend from making a reliable beeline precisely to 1336.70.)  It's yours to use, and I'd suggest an initial stop-loss of five ticks. If it's tagged, however, brace for more downside to as low as 1329.60. Alternatively, a  thrust today touching 1344.90 would signal that the bulls are ready to run. _______ UPDATE (10:49 a.m. EDT): Gold easily broke through 1336.70, telegraphing the weakness that was to follow.  The relapse eventually found a bottom at 1328.10, but not before taking a $6 bounce from $1329 on the way down that could have yielded a trading profit for anyone who went bottom-fishing at 1329.60.

A Hidden Pivot support at 1291.60 still beckons as a logical place for this now seven-day-old correction to bottom.  However, we should be alert to the possibility of a decisive turn from somewhere above it, since the futures were struggling on Friday to reach even the 1314.25 'c-d' midpoint of a lesser downtrend. They would more than merely harass bears this week with a print exceeding 1158.90, a "soft" peak on the hourly chart that I identified here earlier.

Yesterday's decline formed a weak bearish impulse leg on the daily chart by surpassing a single external low , but it took a two-day retracement rally and a running start to do it.  That's pretty timid action for what some seem to fear could be the start of a major correction in gold. That's possible, of course, but on first evidence, we needn't cower in fear at the prospect -- and we should certainly be ready to seize the opportunity the moment bulls turn things around.  Most immediately, however, a 1291.60 Hidden Pivot support that I broached here earlier must be viewed as the minimum damage to expect in this now five-day-old correction.  The midpoint support associated with that number lies at 1320.60, and because it has already been breached by a decisive $2.40, we must assume that the 'd' target itself is in play.  Alternatively, a "soft" peak at 1358.90 that we've dwelt on in recent days remains the number to beat if bulls are to reverse the momentum of this slide.  A more subtly nuanced (and more speculative) sign of a turn would come today at 1333.60, where the five-minute chart turns bullish.  _______ UPDATE (2:53 a.m. EDT):  The futures are in a take-no-prisoners rally early Monday morning, but the so-far high at 1347.10 is still $2.60 shy of becoming impulsive on the hourly chart.  More than merely impulsive, however, would be still better, and that's why we should be rooting for a print at 1359.00 today.  It is there that the bad guys would be likely go into pain-avoidance mode via short-covering.

Persistent buying pushed the futures $21 above Tuesday's low, lifting Gold out of the high-danger zone while generating a minor bullish impulse leg on the 15-minute chart. This is all mildly encouraging, but we'll need to see a print today above the 1158.90 look-to-the-left peak shown in the chart before we have reason to relax. The peak was described here yesterday as "soft" on the hourly chart, but on the 15-minute, it's hard-as-nails.  _____ UPDATE (1:07 p.m. EDT):  The futures are getting sacked today; however, at this moment they are bouncing from a midpoint support at 1320.60.  If it should fail, that would signal more weakness down to exactly 1291.60, a target that I posted earlier in the chat room.

Around 11 p.m. Tuesday, the futures appeared to be rebounding from a 1328.00 Hidden Pivot midpoint that was mentioned numerous times in the chat room.  I flagged it myself late in the session, but so had at least two other chat-roomers -- Harry, and Gonegolfin' (aka Brian, a graduate of the last Hidden Pivot webinar).  Does this mean the correction is already over?  It's possible, although to be more confident about it I'd want to see the rally hit 1359.00, generating a "soft" impulse leg on the hourly chart.  (The peak to be exceeded at 1358.90 is not well developed, and that's why its breach would be less-than-decisively impulsive.)  At any rate, the fact that the selling has been discernibly reversed precisely at the midpoint pivot hints that bears will not find it so easy to beat down gold for a second consecutive day.  If they take another whack at it, though, a Hidden Pivot support at 1308.60 should be used as a minimum downside target.  It is the 'd' sibling of 1358.00 and will remain valid as long as 1347.40 (point 'C') has not been exceeded to the upside.

The futures rebounded from yesterday's bottom with a bullish impulse leg of hourly-chart degree, but buyers were showing sign of fatigue shortly before after midnight EDT Tuesday.  The slippage is slight so far, but it still has a few dollars to go before support comes available at 1363.70, a Hidden Pivot midpoint associated with a 'd' target at 1351.80.  Another such pair of supports, but of larger degree, lie at 1359.00/1342.40.  Although an upthrust touching 1377.10 would make all of those numbers moot and put bears on the run, if the futures continue to ease we should take note of the quality of support at each of the four Hidden Pivots.  As always, an easy breach of one would imply the next is likely to be achieved.  Officially, we hold two contracts with a cost basis of 1353.30.  Our price objective is 1380.00, where we'll plan on selling one contract if the opportunity should arise. For now, both contracts should be stopped at 1362.10.  _______ UPDATE (10:05 a.m. EDT):  Just before gold plummeted at dawn, we exited our position on a stop for a theoretical gain of around $1800.  Although the futures overshot our lowest target, the selling has yet to breach a single prior low of daily-chart magnitude.  The first lies at 1325.60, $7 beneath the so far intraday low, and the second at 1297.00.  Both would need to be exceeded -- today -- before we need infer that something more than a minor shakeout is occurring.

It's Sunday night, around 10:34 p.m. EDT, and sellers are attempting to drive the futures down to a correction target at 1353.30. That's a Hidden Pivot support, and you can try bottom-fishing there with a 1352.80 stop-loss. If the stop is hit, consider it a warning of more weakness over the near term -- presumably to at least 1349.00, a Fibonacci-based support from the hourly chart.  Looking at a somewhat bigger picture, a 1415.40 rally target given here earlier will remain valid unless 1325.60 is exceeded to the downside. _______ UPDATE (10:29 a.m. EDT): My 1353.30 target caught the low of a so-far $18 bounce within a dime, so even if you used a stop-loss as tight a two ticks, you got on board safely.  If you initiated the trade with a multiple of four contacts, keep 25% of the original position for a potential home-run.  Single-contract longs should use a 1362.10 stop-loss for now, o-c-o with a 1380.00 objective, since a print at the former is where a bearish impulse leg would be signaled on the 3-minute chart.  Officially, I'll track a two-contract long for your further guidance, with one of the contracts stopped as above, o-c-o.

The $17 selloff that followed yesterday's pre-dawn spike did nothing to disturb a 1415.40 rally target given here earlier. Notice in the accompanying chart how the low of the pullback came within an inch of touching a Hidden Pivot midpoint at 1370.50. That number was resistance when the futures broke through it a day earlier, but it is now acting as support.  Shortly after 9 p.m. EDT Thursday, the December contract appeared reluctant to unleash another thrust and had stalled at a level equal to a 1383.90 peak recorded intraday.  It's too early to say whether this portends sluggishness on Friday, but it does suggest that buyers are not feeling as feisty as they were the night before.  A day of backing and filling might be just what this rally needs.