Gold

Gold has been leaden for a month, presumably to set up a nasty surprise. But for whom -- bulls, or bears? My hunch is the latter, but we'll keep an open mind just in case. They evidently were fixated on the 2050.60 target shown in the chart and may have been patting themselves on the back when the futures whipped around and shot up to a marginal new high that stopped every last one of them out. We shouldn't underestimate the lingering pain, nor their natural desire to even the score. Look for wicked swings to precede a drop to at least p=1939.10 if there's going to be a consolidation for another big leg up.

Buyers on a roll for the last month have 7'd out just above the 2050.60 target shown.  An alternative target at 2079.40 still looks likely to be reached, but probably not straightaway. The lower target must have been widely anticipated, since the futures head-faked above it a week later just to jack shorts who would have been celebrating the refreshing but short-lived $54 drop a week earlier. We'll focus on short-term opportunities for the time being, with a mildly bearish bias. _______ UPDATE (Apr 19, 11:45 p.m.): My explicit guidance for getting long this morning produced a winner that could have been worth as much as $9,600 on four contracts. Traders would have experienced little stress on the ascent, since the trade proceeded straightforwardly from a voodoo number that caught the intraday low to the exact tick. Here's the chart. For further details, and to determine whether you could have followed my instruction, see related posts from 8:12 a.m. forward. _______ UPDATE (Apr 20, 10:52 p.m.): Navel-gazing has driven gold psychotic, even if its price action is as predictable as ever. The June contract is currently bound for the 2028.80 target shown in this chart -- and yes, it is shortable if you know how to manage the risk tightly. _______ UPDATE (Apr 21, 8:22 a.m.):  The bearish, 1963.00 target in this chart goes against gold's daily drug habit of reversing overnight smashes as the regular session begins, but that's what will happen if sellers break p=1993.80 decisively. If you're planning on bottom-fishing, be alert to the possibility that using the slightly higher 'A' available in the chart could lower the bottom from which the futures are likely to bounce to 1961.60.

We've been using the 2079.40 target shown as a minimum upside objective, but there's a yellow flag out at the moment because Friday's high at 2049.20 precisely coincided with Hidden Pivot resistance levels associated with two bullish patterns, including the one targeted on 2079.40.  The pattern has already enabled a 'mechanical' buy at the green line that could have been worth as much as $6400 per contract. A second such signal would occur on a pullback to 1985.10, stop 1953.60, but I'll suggest tuning to the chat room if the opportunity gets close, since theoretical entry risk exceeds $3000 per contract. ______ UPDATE (Apr 11, 9:52 p.m. EDT): The futures look all but certain to achieve the 2029.50 target of this pattern, but the picture would brighten still move if this thrust can take out the 2031 peak to the left without pausing for breath. _______ UPDATE (Apr 12, 5:49 p.m.): The rally accomplished what we'd asked of it, then gold did its by-now-obligatory Daily Dive. A score more of them will not change the fact that this is a bull market and that all upside targets provided here for the foreseeable future will be achieved more or less exactly, if sometimes tortuously.

Bulls and bears both held their cards close to their chests last week. The latter cannot bluff effectively or for long, however, since bullion is in a bull market. However, the question on everyone's minds is whether gold is overdue for a punitive correction of the $350 run-up since November. Price action relative to the pennant formation shown in the chart (inset) should tell us soon whether a bearish outcome is likely, but there is nothing that I can discern in the chart that argues for betting the ranch on a particular scenario. For now, brace for savage, meaningless feints. most of them lower, since the quasi-criminals responsible for gold's gratuitous swoons have sufficient control over the futures to peg their price nearly anywhere over the short term. ______ UPDATE (Apr 3, 5:37 p.m. EDT): The ass-bandits took out the lower trendline on very light volume to begin the day, then bought aggressively to drive the futures nearly to the upper trendline by midday. I've altered the pennant somewhat to keep the futures within bounds, but don't expect the thieves to pull the same stunt if the break-out is to the upside, since they won't be able to trick buyers as easily as they suckered sellers. Here's the new chart.  _______ UPDATE (Apr 4, 12:13 p.m.): Gold's impaling spike through p=2016 this morning implies more upside over the near term to at least 2079.40. Here's the chart -- and yes, the pattern should work well for 'mechanical' buying on swoons. _______ UPDATE (Apr 5, 10:01 p.m.): The futures will be headed down to exactly 2018.00 straightaway if support at the 2029 midpoint Hidden Pivot fails. _______ UPDATE (Apr 6, 7:45 a.m.): Well, I guess we'll just have to see about that. June Gold cracked $2029 overnight, then reversed as it nearly always

After shaking off a gratuitous midweek smackdown, June Gold was bounding on Friday toward the Hidden Pivot rally target at 2052.00 shown in the thumbnail chart. Buyers looked sufficiently revved up to achieve this objective easily within the next couple of days. If they do, and especially if they close above it for two consecutive days, you can confidently infer the futures are on their way to at least 2154.50, the next Hidden Pivot resistance of importance. It is derived from the pattern on the daily chart starting with A=1830.20 on March 8, and B=2031.70 on March 20. _______ UPDATE (Mar 29, 7:56 p.m. EDT): Here's a more challenging view of gold -- a pennant formation that visually raises doubts about 2052.00 being a lock-up. If the June contract cracks the lower trendline, I'd brace for more disappointment.

Buyers blew past the 1964.50 D target of a minor pattern with such ease on Friday that they all but clinched a further run-up to the 2036.40 target of the larger pattern shown (see inset). The psychologically important $2000 barrier is unlikely to provide much resistance as the new week begins, although it could act as support on a pullback. The move has been so steep that it has offered few opportunities to get aboard 'mechanically, even on the lesser charts. Gold should start turning up in the headlines once it is trading comfortably above 2000, and that could be a problem for spinmeisters who would deign to suggest that all is right with the world. _______ UPDATE (Mar 20, 8:45 p.m.): Apparent distribution over the last two days has created a minor but potentially controlling head-and-shoulders pattern with the potential to send the futures down to 1930 or so in search of traction. _______ UPDATE (Mar 22, 9:11 p.m.): Today's nutty, Fed-induced rally spilled into gold, driving the April contract into a parabola that negated the bearish head-and-shoulders pattern mentioned above. The new pattern project to 2034.20, with midpoint resistances, still untested. at 1985.40. Here's the chart.

Gold's gratuitous feints in both directions have become tiresome, and so I'm not going to get too heavily invested in the opportunistic leap it took Friday on dollar weakness. The pattern shown says a 'mechanical' short would trigger at x=1925.00, but I would not be especially enthused about laying out a few contracts there, since the bearish energy of the A-B leg has had a lot of time to diffuse.  The short can be attempted nonetheless, provided we use a 'camouflage' trigger to initiate the trade. In any event, the 1774.50 downside target that was first signaled on February 2 remains theoretically viable, if no longer compelling. _______ UPDATE (Mar 13, 10:27 p.m.): This should be interesting now that the flight to safety that has followed SVB's collapse is looking more like a buying panic. The 'mechanical' short at 1925 still looks enticing, but I'll suggest paper trading it unless you know how to set up a 'camouflage' trigger near the green line. This implies doing the trade on the five-minute chart (or less) when x is hit. _______ UPDATE (Mar 15, 9:44 a.m.): Buyers impaled x=1925 without triggering any shorts (other than a 'conventional'-type entry at x that we never use). Price action within the pattern is still interesting for what it seems to predict -- i.e., that a one-level relapse to p=1874.90 that would make the short profitable is still more likely than a rally exceeding C=1975.20.  _______ UPDATE (Mar 16, 11:31 p.m.): When April Gold punches through the midpoint resistance at 1938.00, it'll be bound (exactly) for D=1964.50 of this pattern.

Last week's subdued bounce created a bullish outside bar on the weekly chart, implying the uptrend will continue. However, if it reaches the green line (x=1925) that lies $70 above, that would trigger an appealing 'mechanical' short, stop 1976. That doesn't necessarily mean the futures would recede back into the bowels of hell, only that the short would be a good bet to return a one-level profit with a drop to the red line (p=1874.90) before the larger uptrend resumes. The 1774.50 downside target will remain theoretically valid nonetheless until such time as C=1975.20 is exceeded.

The futures made progress last week toward the 1774.50 Hidden Pivot target that has served as our minimum downside projection for a while. The presumptive correction began nearly a month ago from 1975. It has been brutal, but the predicted low beckons as an opportune place to attempt bottom-fishing. As always, a camouflage trade trigger will be the preferred method to get onboard, since it can enable us to lose nothing or even make a few bucks even if we are wrong about where a bottom might form.