Gold

A seemingly modest rally target at 1858.60 is still  viable, although the August futures seem in no great hurry to get there.  The 'reverse ABC' pattern shown in the chart would trigger a long if last week's weakness continues down to x=1777.20. However, I have little enthusiasm for gold at the moment and would therefore suggest using the micro-contract if you are uncomfortable with the implied $11,000 of entry risk tied to the full-size contract. At least half the position should be exited if the futures rally from the entry price to the red line (p= 1804.40).  I rate the trade a '6.6' -- worth a try, especially if you can execute it via a much smaller rABC pattern capable of reducing initial risk by perhaps 95%. ______ UPDATE (Jul 29, 3:31 p.m.): Today's encouraging upthrust has shifted my crosshairs cautiously higher, to the 1912.50 target of this reverse pattern. That's $54 above the old target, and it would become an even-odds bet following a two-day close above 1831,30, or an intraday stab exceeding 1850.

I've switched to an rABC pattern and a less ambitious target at 1858.60 because gold's trek higher has been so laborious, if not to say tortuous.  Intraday swings have been too nasty and frequent to use a buy-and-hold approach. However, the 'mechanical' set-up shown in the inset is designed to help make it easier on you, at least for a possible short ride from x to p2 or higher, as illustrated. We'll be better able to judge the strength of the uptrend, such as it is, once we've seen buyers interact with the target. ______ UPDATE (Jul 20, 8:35 p.m. ET): No one mentioned this in the chat room, but the trade suggested above was showing a $6000 profit on four lots at today's high. Because I was too preoccupied to signal an exit when gold surged this afternoon, I'll do so now for an $1800 gain on the pullback to 1809.10.

August Gold tripped a theoretical buy signal last week when it touched the green line (1809.8). We won't rush to get long(er), but the persistence with which the future head-butted the line could be likened to a gentleman caller who rings the doorbell four or five times to announce himself. The pullbacks were shallow as well, strongly implying bulls will dominate for the next couple of weeks if not longer.  I'll suggest using p=1869.40 as a minimum upside projection for now and trading with a bullish bias, but we'll need to see a convincing punch through it before we allow ourselves to enthuse over a further push to D=1988.70. ______ UPDATE (Jul 12, 6:37 p.m. ET): The futures' pathetic struggle at the green line today reminded me that I'd resolved not to be any more bullish in my comments than is justified by the technical evidence. My earlier assertion that the so-far shallow pullback after tripping a buy signal portends a week or two of strength was overreaching. We'll continue to use 1869.40 as a target, but I'm not offering it as a done deal. In any event, the August contract would need to close for two consecutive days above x to merit a more upbeat outlook. ______ UPDATE (Jul 14, 9:44 a.m.): Gold has popped to 1831.10 this morning, high enough to break free of the green line's gravity. You can use p=1869.4o as a minimum upside target for now.

Gold's price action lately has grown too defiant of logic and even rationality to merit diligent attention. The futures got crushed for a week in mid-June, but now sellers can't even push it down to a minor 'D' correction target. Instead, the August contract rallied on Friday, presumably gratuitously, to within an inch of a level that would negate the bearish pattern. I've set an alert at 1826.50, a tick above an external peak recorded June 16 on the way down. That's where the bullish case would become, if not compelling, then at least very faintly appealing. We might also look to get short using a 'reverse ABC' set-up if the futures make it up into the range  1810-1820. My point 'a' for the trigger pattern would be 1776.30, equal to a peak recorded at 10:00 a.m . June 29 on the hourly chart. (For a bigger picture that is bearish short-term but bullish long-term, check out the current commentary, So Maybe Gold Actually Does Suck.)  ______ UPDATE (Jul 6, 5:27 p.m.): The short trade suggested worked perfectly and generated a relatively quick, easy profit of around $2600 on four lots. A few subscribers reported getting aboard, some by interpolating with other gold vehicles, and covering at the red line as suggested.

Gold's less-than fascinating struggle to hold above an important midpoint Hidden Pivot at 1775.00 and a shelf of structural support constructed back in April has entered its second week. My gut feeling is that both will give way, sending the August contract down to p2=1702.80. But even if the futures were to rally instead, a move touching the green line (x=1847.10) would trip a somewhat appealing 'mechanical' short with a stop-loss at 1920.00. We'll want to attempt bottom-fishing if and when the Auggies fall to p2=1702.80, so stay tuned to the Trading Room if you're a player. Bulls looking for a glimmer of hope should set an alert at 1826.50, just above an 'external' peak recorded June 17 on the way down. _______ UPDATE (Jun 29, 10:20 p.m.): Here's a smaller bearish pattern with an interim downside target of 1739.40. A rally to x=1783.30 would trigger a weak 'mechanical' short, meaning it should be initiated only via a 'camouflage' set-up that reduce the implied risk of nearly $6000 on four lots. ______ UPDATE (Jul 1, 6:40 p.m.): The trade worked out perfectly, producing a $6000 gain in just a couple of hours. Shorting at 1783.30 would have been low-stress, since the futures never went higher than 1783.40 (!). As for covering the short position, the opportunity to do so came quickly and easily via a $15 plunge that followed the 1783.40 peak. Here's a chart that shows how the trade evolved.

My headlined enthusiasm for gold a few weeks ago looks to have been premature, as was my conjecture that the takedown artists who sometimes gang up on precious metals were finally outmatched by a waxing bull market. It would appear they are still very much in control, although I doubt they'll be able to push quotes much below 1600. That would represent a nearly 20% correction off last August's 2063 high -- perhaps all that could be imagined, given the deafening drumbeat these days warning of a horrific inflation that supposedly lies ahead.  For now, I'll recommend using p2=1700.70 (see inset) as a minimum downside projection for the near term. However, if this Hidden Pivot is easily breached, brace for more downside to at least D=1627.80. Alternatively, an unpaused upthrust exceeding 1826.40 would give bulls some breathing room, although it would not negate the bearish targets; that would require a print at 1919.30. _______ UPDATE (Jun 22, 11:34 p.m.): Bull have hung in there at p=1773.50, but the so far $12 breach of this midpoint Hidden Pivot suggests it will be a losing battle. Let's see what a new days brings.

Gold turned leaden last week, although it managed to hold its own against the takedown artists.  Buying interest in bullion was nil as the action shifted back to the lunatic stocks. Usually that begets a gratuitous $100 swoon in gold, but DaBoyz evidently couldn't round up the few sellers it would have taken to accomplish this. The result was another week's consolidation at an 1880.49 midpoint pivot associated with a rally target, previously given, at 2082.40 (see inset).  Bulls were on the run at the close, however, so here's a downtrending ABC pattern you can use to judge whether the selling is likely to continue.  It tripped an enticing 'mechanical' short on the bounce to  the green line (1892.70), but I doubt the futures will fall as far as the 1850.20 target.  If they do, you can bottom-fish there with a tight stop-loss, good till 10 a.m. ET Monday. _____ UPDATE (Jun 14, 10:18 a.m. ET): The trade recommended above worked nicely, producing a gain so far of up to $7600 for anyone who got long at 1850.s0 as advised.  Here's the chart.  A stop-loss at 1845.60 or lower would have held the position.  Use a target of 1880.10 for what remains of your position.  That is 'd' of this rabc set-up on the 60-minute chart: a=1871.80 on 6/10 at 9:00 a.m. ET.  _______ UPDATE (Jun 16, 12:25 a.m.): The pullback to x=1854.3 generated a mechanical 'buy', but the trade would have been exited on the run-up to within an inch of p=1862.90. I have nothing more to suggest at the moment. ______ UPDATE (Jun 17, 1:13 a.m.): There was no reason for gold to sell off with stocks on the non-news from the Fed, but the fact that it did anyway suggests DaSleazeballs have more control over it, at

August Gold has closed above the red line (1880.40) on all but one day since exceeding it for the first time on May 19. This easy flirtation with a key midpoint resistance suggests that an eventual push to the 2082.40 target is unlikely to be labored.  This is not withstanding last week's $45 dive, about which two things could be said: 1) it was not an $80 swoon, as many of them have been since last August's watershed high; and 2) in true bull-market fashion, the plunge has very nearly been recouped in just a day. The pattern shown should work well for 'mechanical' set-ups and profit-taking, but we shouldn't get our hopes too high that we'll be able to augment long positions with such fire-sale bargains on the way up.

We've focused on a 2083.90 rally target that remains a strong bet to be reached.  More immediately, however, let's train our attention on the 1923.90 target shown, since it could conceivably yield a bull trade over the next day or so. Specifically, I'll recommend bidding 1894.20, stop 1884.20, if the futures have gone no higher than 1916.00. The implied entry risk is $4000 on four contracts, but you can interpolate using the micro-futures to cut that by as much as 90%. As always, an easy move past a Hidden Pivot resistance as clear as this one would be telegraphing a continuation of the rally. _______ UPDATE (June 1, 2:39 p.m. ET):  The 1894.20 bid I'd suggested missed the intraday low by just three ticks. I have not established a tracking position, however, because the futures went a tad higher than I'd anticipated before swooning $25 to nearly kiss our stink bid. Several subscribers reported doing the trade nonetheless, and it is sufficiently profitable at the moment -- i.e., around $1000 per contract -- that you should have little difficulty managing the risk.  A 1923.90 rally target still obtains. _______ UPDATE (Jun 3, 10:23 a.m.): Ha-ha. Just when I mention “no takedowns,” DaSleazeballs sock the futures with a $45 loss. The proximal cause of this fake selloff, abetted by evidently still-abundant, fearful clowns, was allegedly ‘bullish’ unemployment data. Stay the course! ______ UPDATE (Jun 3, 9:24 p.m.): Today's sucker-punch had gold reeling for barely an hour. Let's see if the menacing-looking close just off the lows has real teeth. Night owls up for a little excitement can try bottom-fishing at 18.59.20, stop 1858. 50. That's the midpoint HP support, on the 60-minute chart, of a= 1900.50  (7:00 a.m., 6/3). _______ UPDATE (Jun 4, 9:46 a.m.): A low of 1855.6o stopped out the trade before