Gold

December Gold's failure last week to reach an 'easy' midpoint Hidden Pivot at 1954.30 seems like weakness, but I hesitate to draw so obvious a conclusion about a vehicle that likes to surprise us at the turns as much as this one. My bias remains mildly negative, however, and that implies the futures will at least feint beneath the 1913.60 point 'c' low of the reverse pattern shown. That would certainly be tradeable for bottom-fishing, but we'll let price action determine our next move.  At the closing bell on Friday, bears remained in charge despite a sharp rally from a mid-morning low. _______ UPDATE (Aug 28, 3:44 pm. EDT): Just posted in the chat room: "I can't promise you that last week's low will prove to be the start of a major bull leg, Sparty. But I'm confident this bullish pattern, with a 1995.00 rally target, will make you money regardless -- and it could also clarify the outlook. Today's high occurred a single tick from p, validating the pattern. It has also set up an appealing 'mechanical' buy if Dec Gold should pull back to x=1934.00 (stop 1913.50). Click here to call up the chart. 

The update I put out Wednesday night nailed the week's low at 1914.20 within $1. However, because no one reported a trade, I haven't established a tracking position. I expect the downtrend to resume this week and to hit D=1897.90, a Hidden Pivot that can be traded with a tightly wrought rABC (i.e., reverse-pattern) trigger.  There  could also be a tradeable bounce from 1911.50, but it should be bottom-fished only by Pivoteers who know how to find this voodoo number. The 1897.90 pivot is obviously important, since a breach could send December Gold groping for traction below the Feb/Mar lows around 1883. _______ UPDATE (Aug 23, 10:23 a.m.): Gold is off to the races this morning, presumably on a track to nowhere that has come to resemble a Möbius strip.  Despite my skepticism, however, and because the rally is solidly impulsive on the intraday charts, I'll offer this bullish view as though I were a true believer. Like most fetching 'reverse' patterns, this one is all but guaranteed to work well no matter what your purpose.

No change in my earlier forecast that October Gold would fall at least to D=1908.10 of the pattern shown. This ABCD is too obvious to yield a tradeable bounce precisely from the 'hidden' support, so we may need to let the rubes get stopped out once or twice before we attempt to bottom-fish there ourselves. Obviousness aside, the pattern is pretty 'textbook', and so a significant bounce would appear to be all but certain. A turbocharged one from no lower than 1921.00 or so would provide a technical rationale for getting 'mechanically' short at x=1983.40. However, somewhat more likely in my estimation is eventual slippage below 1908, presaging a test of spring's lows near 1865. ______ UPDATE (Aug 15, 5:35 p.m.): Reversing a relentless plunge, gold bounced sharply from less than a point of the 1908.10 target today. However, because the 1910.10 target has been more than two months in coming, we might have expected more from the rebound. Let's give it another day or two to develop, but trading should be with a moderately bullish bias in the meantime. Here's the chart.  _______ UPDATE (Aug 16, 7:25 p.m.): The next stop on the way to hell is 1895.60, a Hidden Pivot support sufficiently obscure that we can safely assume we own it.  Bottom-fish there with a tightly stopped reverse-pattern trigger, but be aware that if the futures relapse and the support gives way easily, the October contract will be headed down to at least 1878.00. I am suggesting a reverse-pattern entry because gold tends to be most heavily manipulated in the early going. (Note: I will switch to the December contract when I update on Sunday. The equivalent downside targets lie, respectively, at 1915.20 and 1897.90.)

We need to keep reminding ourselves that even during those frustrating cycles when gold is being treated like garbage by investors, it is still in a long-term bull market. However, it has been so slow in developing that even hard-core bulls will find their patience tested to the limit. Accumulation is the strategy of choice, coupled with perseverance and discipline to make the ordeal seem worth the wait. To that end, we should be prepared for the correction begun from May's all-time high at 2112 to come down t0 at least 1908 before bulls are sufficiently rested to mount another charge (of the Light Brigade?). The corrective segment shown in the chart has yet to trip a 'mechanical' short, but it would on a rally to 1983.40. Check for details in the chat room if the set-up should ripen, since the $10,000 theoretical entry risk on four contracts can be cut by 95% if we do it right.

As usual, Gold is taking its sweet old time going anywhere, never mind to the 2027 midpoint Hidden Pivot of the pattern shown. We'll need to see how buyers handle this resistance before we can judge the likelihood of a rally to the 2154.20 target. The August contract is on a theoretical 'buy' signal at the moment, but the only way to use it with risk tightly controlled would be to set up a 'camo' trigger on an intraday chart. Stay tuned to the chat room if you care, since I may be able to signal a timely opportunity tied to this vehicle's wonted morning reversals. _______ UPDATE (Aug 4, 8:43 a.m.): Gold has slipped back into its accustomed 'garbage mode', in a bull market more reminiscent of The Flying Dutchman in search of land than its 1970s heyday. Here's a chart that shows an 1895.10 downside target for the October contract.

August Gold spent the week consolidating just above the green line, where a theoretical buy signal triggered the previous week. We should assume minimum upside to p=2028.30, a not very ambitious target but one that would nonetheless fix $2000 in traders minds as support. That's assuming the futures can close for at least two consecutive weeks above the midpoint Hidden Pivot (p).  They should be trade with a bullish bias in the meantime, using 'reverse-pattern' triggers drawn from the lesser charts. Stay tuned to the chat room and email 'Notifications' if you trade this vehicle.

Although I am watching August Silver closely for signs of a bullish breakout, August Gold's price action calls unambiguously for a 'mechanical' short using the green line. I've suggested paper-trading this one, but I will be tracking it closely nonetheless in order to effect a 'camouflage' short that would limit entry risk to a practical minimum. As of now, that implies using an $8.50 trigger interval off any rally that hits 1969.40 or higher. ________UPDATE (Jul 18, 6:23 p.m.): The paper short would trigger on a drop to 1979.50, but I am no longer recommending it, even if your camo 'chops' are up to snuff. Bulls should want to see the trade stopped out, since the 'textbook' features of the 'mechanical' set-up made it a pretty good bet. If the short doesn't work, it would add to the evidence that bulls are finally in command again. ______ UPDATE (Jul 20, 1:45 p.m.): Our paper short is profitable, and that is not a happy sign for gold. We'll keep a close eye on gold, since the picture would darken further if minor abcd patterns start to exceed their d targets, or even p midpoints. _________ UPDATE (Jul 21, 12:19 a.m.): Thursday's impulsive selloff points toward 1957.70 (60-min, A=1985,90 on 7-20 at 7:20 a.m.). Now let's see if sellers have grown a pair.

August Gold has struggled for loft after bouncing from just beneath a Hidden Pivot support at 1903.90 that I'd flagged on June 29. Bullion tends to taunt us with weakness before rallying sharply (albeit fleetingly) to nowhere in particular. In this case, however, it looks like it wants to go lower in order to get better footing for a sustained uptrend. We can use the 1875.00 downside target shown for now, but we'll switch to a more bullish outlook for trading purposes if buyers can push above an external peak at 1949.00 recorded two weeks ago. _______ UPDATE (Jul 13, 10:15 a.m.): The futures tripped a 'mechanical' short when they came within a hair of x=1969.30 at 8:35. The subsequent $12 dive could have been shorted with a reverse-pattern trigger, but I am suggesting only that you paper-trade this one. If it is stopped out with a rally above the pattern's 'C' high, that would be the most bullish event we've seen in a while. Even then, we shouldn't trust the rally until it has created a series of impulse legs on the lesser charts.

August Gold turned from nearly exactly where expected, a 1903.90 Hidden Pivot support of middling importance. The actual low occurred at 1900.60, strongly suggesting that our bid was front-run by others using the same, visually obvious pattern we employed to project a downside target. If it turns out that too many smart guys got aboard for this reason, we should expect the futures to screw 'em all by stopping out the 1900.60 low before embarking on a sustained rally. This should have a positive impact on our ability to trade this vehicle profitably, since exploiting fake-outs is our forte. In any event, an alternative target at 1875.00 will remain viable, at least in theory, until such time as 2000.70 (i.e., an alternative 'C' high) is exceeded to the upside.