The 'reverse' pattern shown triggered a 'mechanical' buy on Friday slightly above the green line I'd flagged at 1783.20. A subscriber who reported doing the trade didn't say how, but I'll assume a tight 'camo' set-up was used that might have triggered as low as 1783.90 (for instance: 60-minute, reverse a= 1785.40 on 1/6 at 9 a.m.). I'll recommend exiting half the position on the opening Sunday night, since gold's rallies have been balky and short-lived. Thereupon, implement a trailing stop that would put half of any profits booked up to that point at risk. A third contract should be offered $10 higher, but check back, since that could change depending on how this vehicle opens on Sunday. ______ UPDATE (Jan 10, 7:13 a.m.): Exiting two contracts at 1796.40, Sunday evening's opening price, leaves two contracts (or 50% of the original position) with an effective cost basis of 1770.00. Offer half of what remains at 1813.30, just below the pattern's midpoint Hidden Pivot, with an o-c-o order stopping out the entire position at 1785.60. (This is an 'impulsive' stop on the 30-minute chart that references two very recent, external lows.) _______ UPDATE (Jan 11, 8:55 p.m.): If you followed my instructions, you're sitting on realized gains of $4,300 and are still long a single contract (or 25% of the original position) with an unrealized gain of $5,000. Use an 1801.00 stop-loss for now, O-C-O with an order to exit the remainder of the position at 1839. A 'dynamic' trailing stop can be substituted above 1828. ______ UPDATE (Jan 12, 5:23 p.m.): The dynamic stop suggested above triggered at 1825.40 after the futures topped at 1828.20. The total profit on the position would have been around $8000. Do nothing further for now.
I've come to view bullion's rallies with cynical detachment, but that doesn't mean we can't exploit the gratuitous head-fakes, swoons and dives for trading purposes. The pattern shown should be up to the task, even if it failed to provide a 'mechanical' entry opportunity on either of two nasty feints to the green line. The pattern and the technique we use to leverage it 'mechanically' are too obscure to suggest we are getting front-run. Indeed, we should infer that gold futures are simply naturally nasty because they are controlled by some of the best-connected weasels in the trading world. We won't try to short D=1873.90, only observe how well it repels buyers. ______ UPDATE (Jan 3, 10:03 p.m. EST): Much as I'd like to tune out gold, the little s.o.b. would trip a 'mechanical' buy signal if it falls to the green line (1783.20). With a stop-loss at 1752.90 and implied entry risk of around $3,000 per contract, this gambit is recommended for 'camo' experts only. To all others, I would suggest paper-trading so that you can better understand how these set-ups work. _______ UPDATE (Jan 4, 5:07 p.m.): Here's a snack-size pattern to use for targeting and trading over the next day or two. It has triggered two 'mechanical' winners, but its main value now lies in its potential to measure trend strength via price action at D=1847.00. If you've made money on the way up, the target can be shorted with a very tight 'reverse' pattern that risks no more than $200 theoretical. _______ UPDATE (Jan 6, 8:04 p.m.): Perhaps you too are tiring of gold's relentlessly annoying rallies and phony breakdowns? Does this vehicle suck, or what?
Gold has shown no net gain or loss in a year-and-a-half and will likely remain trapped in a nervous range until something very significant changes in the big economic/financial picture. The pattern shown, with a 1629.00 downside target given here earlier, has provided some excellent entry points for 'mechanical' and 'reverse' trades; but that's all gold is good for at the moment: just a trade. We can reconsider the dour outlook if the futures pop above mid-November's 1882 high or penetrates the downside target at 1629. The latter seems most unlikely, but the Hidden Pivot levels by themselves will remain useful in any event.
Gold's squirrelly histrionics have become too tiresome to deserve our close attention, but we can still use the excellent, gnarly pattern shown to exploit any price action that plays to our game. For starters, a fall to p2=1700.80 could be bought 'mechanically', provided you know how to set-up a 'camouflage' trigger that would reduce the nearly $30k of entry risk on four contracts by perhaps 95%. Nudge me in the chat room at the appropriate time if you care and I will show you how. (Here's the equivalent pattern for Feb Gold, where p2=1702.60 and D=1629.00.) Notice that a 'mechanical' short deep in the 'discomfort zone' a couple of weeks ago would have paid off at the same odds as the buy suggested above. ______ UPDATE (Nov 30, 6:18 p.m.): The February contract fell to the red line, generating a $30,000 payoff for anyone who shorted the most recent 'mechanical' signal -- at 1849.40 on 11/10. The 1629.00 target remains valid, but let's see if bears can extend their winning streak with a further fall to p2=1702.60 first. Gold may suck much of the time, but that doesn't make it any easier for bearish bettors to profit.
December Gold remains on track for a move to at least 1916.90, the 'reverse' D rally target shown in the inset. Two weeks of tedium have at lest partially consolidated the very robust impulse leg begun on November 3 from 1758. However, we shouldn't rule out the possibility of a $30-$50 swoon to alleviate gold's constipation before it heads up to 1916.90. The implied $2000 entry risk of bullishly trading the resulting pattern means we'll need to set it up on charts of lesser degree. You should stay tuned to the chat room, but also keep your email 'Notifications' switched on if you want to keep closely apprised. ______ UPDATE (Nov 22, 9:52 p.m.): The December contract fell almost $50, validating my warning, but technically it won't become a swoon until we've see a strong bounce that recoups the loss. In the meantime, a further fall to p=1797.40 would trip a 'mechanical' buy, and so would a hit at x=1737.70. Nudge me in the chat room if you would like me to vet your 'camouflage' entry set-up. _______ UPDATE (Nov 23, 5:48 p.m.): We're in no hurry to get long nor to play hero as gold's predatory masters simulate scary weakness. I still think we'll have our chance down around 1737.70.
Bulls remain on track to achieve the 1916.90 target flagged here earlier. It would take a little more more oomph, however, to push past 'Annapurna' at 1922.00 in order to generate a robust impulse leg on the daily chart. A further surge into the void above that peak would make December Gold a tempting short from the 'discomfort zone', if only for scalp-trade. Alternatively, a surprise plunge would trigger a 'mechanical' buy at p=1797.40, stop 1757.50. That's $16,000 of entry risk on four contracts, so check the chat room for 'camo' alternatives before you leap. ______ UPDATE (Nov 16, 5:11 p.m. ET): Today's stupid, and presumably gratuitous, plunge tripped a 'mechanical' buy signal at x=1855.20, stop 1843.20. Mechanical trades work best when we are attempting to exploit pointlessly violent swings, so this set-up should offer a pretty good test of the theory. _______ UPDATE (Nov 17, 8:55 a.m.): A pretty good test, indeed. The futures surged to p=1867.10 overnight, producing a textbook profit-taking opportunity that would have netted a nearly $4800 gain for anyone who held onto four contracts acquired at X=1855.20 as advised.
A two-day thrust blew past the 1805.70 midpoint pivot (see inset) with such ease that more upside to the 1852.9o target would seem to be all but assured. This is gold, however, and we've become used to disappointment, if not inured to it, so let's not count our chickens quite yet. A pullback to the green line (1782.10) on Monday or Tuesday, however unlikely, should be bought 'mechanically', albeit on a chart of much smaller degree than the one shown. If buyers handle D=1852.90 with unwonted brio after having reached it straightaway, that would be the most bullish sign we've had in this vehicle in a very long while. _____ UPDATE (Nov 10, 10:56 p.m.): A fist-pump through 1852.90 kept bulls on the offensive, but there are some daunting hurdles just ahead. Use the 1916.90 target shown in this chart as a minimum upside target for now, but let's hold the hubris until buyers hoist this tonnage above 'Annapurna'.
A strong close last week might have left me feeling less, um, disgusted with gold. Alas, the December contract took a $30 dive on Friday, and although it recovered some of it by the bell, the bounce wasn't strong enough to generate much enthusiasm for the week ahead. For now I'll suggest using the bearish pattern shown in the chart (inset). It has yet to offer up any 'mechanical' shorting opportunities enroute to the 1633.50 target, so anything we do will probably have to come from the lesser charts. It's bound to be a bumpy ride, since bears have not exactly been knocking 'em dead either in recent months.
Bulls made encouraging progress last week with a spike on Friday above two prior peaks -- an 'internal' and an 'external, the minimum required to generate an impulsive leg. This will shorten the odds of a move to the upper line of a channel I'd drawn last week. It comes in at around 1864 and has a downward slope of about 35 cents per day. When the week began, my bias was mildly bearish, but this latest price action has tipped me bullish, That's notwithstanding the fact that gold closed well off the high. That was to be expected, since the high occurred a hair below the 'D' target, on the daily chart, of A= 1745.40 (10/6). Sliding 'A' down to 9/29's 1721.10 low yields a new rally target at 1841.10. If reached that would be quite bullish, since it implies a breakout above three imposing peaks near 1836 recorded over the summer. Keep an eye on price action at p2=1820.90, since a stall there, precisely, could be prelude to a sharp reversal per 'Matt's Curse'. In the meantime, a pullback to x=1780.50 would trip a 'mechanical' buy signal, stop 1760.20. With $8000 initial risk on four lots, this one is recommended only to those who know how to cut the risk by as much as 95% with a 'camouflage' set-up. _______ UPDATE (Oct 25, 5:10 p.m.): I've made a slight correction in the chart that brings our target down a smidgen to 1840.30, with corresponding changes in x, p and p2. I've done so because the pattern is gnarly enough to work very precisely -- not only for 'mechanical' bids, but for shorting at a potential top. The trendline noted above has been included. Here's the new chart.
With December Gold trading near the middle of the channel shown (inset), it’s easy to visualize a move in either direction to the top or bottom of the range. My hunch is that the next big move will be lower, however, since last week’s gratuitous hump failed by a whopping $9 to surpass a distinctive ‘external’ peak at 1810.60 recorded on September 14. We were looking to get short if that price were reached; alas, the plunge from a mere 1801.90 caught us flat-footed. But the fact that bulls have borne most of the pain over the last three months, and that bears are not being given easy opportunities to get short, are yet more reasons to suspect a breakdown is nigh. In any event, we won’t pretend to know the outcome, but it might become easier to speculate on one if Mr. Market should inadvertently tip his hand this week with a meaningful tell, however subtle.
