Gold

There's no compelling reason to trust Friday's strong upthrust, but because it was robustly impulsive on the hourly chart, we can't afford to ignore it either.  I'd suggest staking out a tentative long position using the reverse pattern shown. The point 'c' high is just a placeholder at the moment, and you should raise it if the futures make a higher top on Sunday night. Buying should be done at the resulting midpoint Hidden Pivot (currently at 1648.50), using either a stop-loss no wider than 1.00 point, or with an rABC pattern on the lesser bar charts that risks even less theoretically. If you want to paper-trade in order to improve your feel for reverse-pattern set-ups, please note that the conventional stop-loss lie exactly 4.90 points beneath the entry price, predicated on a rally target $10 above it. _______ UPDATE (Oct 24, 12:28 a.m. EDT): A false start and raggedy price action have altered the prospectus for this evening, offering better odds for bottom-fishing D=1646.30 of this pattern than any Hidden Pivot level above it, including the already well-chewed 'p'. ______ UPDATE (Oct 24, 4:56 p.m.): Cancel, the trade, since the futures have been acting like they know D=1646.30 is there. A bullish bias is warranted nonetheless, but price action has been too squirrelly for me to offer day-in-advance trading guidance. _______ UPDATE (Oct 26, 11:53 p.m.): Today's spike to the red line (p=1678.80) confirmed this bullish pattern and its D target at 1736.40. A decisive push past it in the next day or two would shorten the odds that D will be reached. 

Don't get your hopes up that gold is going to make an important bottom any time soon. It had a chance to do so with the robust leap it took on September 28 from within a millimeter of the 1619 Hidden Pivot target shown in the chart. But the subsequent rally, which took a week to play out, fell just shy of a 1646 peak recorded three weeks earlier, narrowly failing to create an impulse leg of daily-chart degree. It would have been the first such occurrence in eight months and a welcome sign for beleaguered bulls. Alas, more disappointment seems likely if the December contract drops below 1619. That would turn the would-be impulse leg into a merely corrective one, sending gold groping for a bottom at, best case, 1600.

Gold rallied on two consecutive days last week, but I'd caution against getting your hopes too high. For one, the rally occurred off a 1622 low that bearishly exceeded the 'D' target of a clear and compelling downtrending pattern. For two, the down-leg that created that low is strongly impulsive, having exceeded no fewer than three important 'internal' lows recorded since early in 2021.  That implies that this rally is merely corrected and should be viewed as such unless it exceeds the 1824.60 'external' peak from August 12. And thirdly, the futures missed a crystal-clear 1750 rally target before turning down last week. That said, the hourly chart remains mildly bullish and can be traded with that bias, especially if buyers get second wind and push the December contract above September 12's 1746 peak this week. _______ UPDATE (Oct 13, 5:30): Yeah sure, that was the bottom.

Gold has impaled a significant midpoint Hidden Pivot resistance at 1686.50 with this morning's strong upthrust, clearing an easy path for more upside to D=1750.70. This tout updates an earlier one that displayed the wrong chart, but it also has given me an opportunity to acknowledge the very bullish price action witnessed in the last two hours. The pattern will yield excellent odds for bottom-fishing any swoons with a 'mechanical' bid, but if the opportunity fails to develop we can still buy on the way up using other tactics (which could conceivably include a small-pattern 'mechanical' entry).

Last Wednesday, gold embarked on yet another rally that seems bound to disappoint. This one was a 60-pointer, and it came nearly precisely from the D target of the bearish pattern shown in the inset. An attempt to follow through bogged down at week's end, leaving the futures with no net gain over the initial, impulsive thrust.  That said, we'll give bulls the benefit of the doubt nonetheless, predicated on a thrust through the 1686.50 midpoint Hidden Pivot of this pattern, which projects to as high as 1750.70. Thereafter, a pullback to the green line from our sweet spot between p and p2 should be bought 'mechanically' provided you know how to hold the entry risk down to less than $250 per contract. In the unexpected event that the rally exceeds D=1750.70, that would be the most bullish sign we've seen in a long while. It would bring into play a larger reverse pattern (a=1802.10 on 2/3/22) that projects to at least 1766.90, or 1911.50 at the outside.  The foregoing notwithstanding, my gut feeling is that gold is about to relapse, eclipsing last week's low at 1622.20. Not far below it is a voodoo number where I'd try bottom-fishing, but I'll say no more about it until such time as the futures get there.

December Gold ended the week breaching, then closing beneath, a 1660.90 midpoint support associated with a 'D' target at 1497.20. Before we sink into despair, let's use the lesser pattern shown in the inset to leverage a less severe outcome. The chart shows immediate downside potential to 1641.00, or to 1620.00 if any lower. Both are worth bottom-fishing provided you can set up the trade with initial risk of less than $150 or so per contract. There is also a possibility that Friday's 1646.60 low will prove to be an important bottom, although I doubt it. A 1685.10 print by mid-week would change my mind, but let's not hold our breath. _______ UPDATE (Sep 28, 8:17 a.m.): The gold trade I posted in the chat room last night canceled itself when the prospective 'c' anchor dropped more than a desirable few ticks beneath D=1628.70. The eventual low at 1622.20 was easily tradeable and came at 3:30 a.m. from this pattern, one that I should not have missed.  I do not think sellers are done. Here is a quite bearish pattern with a 1597.50 target and a midpoint support that was breached last night. The pattern is gnarly enough that it should work well for any purpose, whether bottom-fishing or getting short 'mechanically'.

Pardon me for not getting excited about Friday's impulsive thrust, but scores of failed rallies have taken the thrill out of gold's occasional, meaningless flights of fancy. We should make the futures earn our trust every step of the way, meaning in this case we shouldn't even assume D=1704.10 will be reached via this presumptive bear rally. Let buyers push this sack of cement decisively past our minimum upside objective first, p=1692.00, and then we can raise our expectations just a little. This pattern should work well for 'mechanical' buying, but don't pass up an opportunity to take a partial profit on a modest, one-level move. Incidentally, gold ended the week at the scariest precipice on this chart -- i.e., the 1660.90 midpoint Hidden Pivot of a pattern projecting to as low as 1497.20. If the support doesn't hold, the futures should be presumed bound for at least 1619.90, a secondary D target derived from A2 on the chart.

The last time gold slipped into a discomfort zone was the third week in July, just before it trampolined from the tiny space between two important lows on the weekly chart (see inset). It is probably fixing to do something at least as irksome now, presumably by bouncing with equal or greater ferocity from somewhere beneath the breakdown line shown in the chart. My hunch is that this will not occur following a merely marginal penetration of the line, but rather from either p2=1671.10 or D=1619.90 of this pattern. Use the former for now as a minimum downside target. And yes, just in case, we should allow for the vexatious possibility that, with no breakdown at all, the low is already in. We cannot be fooled about this if we monitor impulse legs on the lesser charts for the next couple of weeks. ______ UPDATE (Sep 12, 10:09 p.m.): My distrust of this rally is so intense that we'll need to judge it strictly by-the-book. That means we  can at least withhold our enthusiasm until such time as the 1757.90 'external' peak created August 28 on the way down is exceeded. _______ UPDATE (Sep 13, 7:03 p.m.): Gold is looking so atrocious that a reversal from near 1700, where three lows have occurred since July 21, seems assured. Anything in the range 1699.60-1703.10 will be in the discomfort zone and therefore opportune for bottom-fishing with a tight reverse-pattern.  ______ UPDATE (Sep 15, 4:14 p.m.): It's getting ugly. Sellers drove gold through the round number 1700.00 with such ease that it became resistance before it even had a chance to be tested as support. Shifting to the weekly chart yields a new downside target at 1619.90, a Hidden Pivot that can be used as a minimum downside projection if p2=1671.10 doesn't hold.

The futures did nothing last week to earn the somewhat ambitious bullish pattern shown. The 1985.40 target is theoretically viable because the green line was tagged, but the follow-through failed to reach p=1840.80, which is what we should expect at a minimum if this brick is going to have a shot at 1985.40. The selloffs have lacked vigor as well, so don't be surprised if the Decembe contract spends the next 2-3 weeks screwing the pooch. My moderate bias calls for a marginal breakdown below C=1696.1. _______ UPDATE (Sep 3, 10:38 a.m.): The 'C' low at 1696.10 held, albeit barely, but I do not trust a bounce coming from such an obvious place. Brace for a relapse, and don't get your hopes too high unless this dog vaults p=1840.80 (see inset). _______ UPDATE (Sep 7, 9:35 pm.): I'll lower the bar for this dog, stipulating that it must leap to 1758.00 to turn the hourly chart unambiguously bullish. That would exceded a key 'external' peak recorded on August 29. _______ UPDATE (Sep 8, 10:36 p.m.): The lowered bar (see previous update) was too high, since today's mere head-fake created a bullish impulse leg that cannot be ignored. Depending on how buyers handle p=1729.60, we'll be able to judge the odds of further upside to D=1745.50 or higher.