Gold

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.

Gold's pointless histrionics have been surprisingly tradeable, albeit only by Pivoteers who know what they're doing. Notice how Friday's stupid spike early in the session reversed from the secondary Hidden Pivot at 1782.70. Any rABC pattern one might have used to set up a short would have worked, although the pullback was so precipitous that executing a stop entry would have been challenging.  Some subscribers may also recognize that 'Matt's Curse'  took effect when the reversal occurred precisely at p2. This usually means the retracement will take out the point 'C' low of the pattern. We shall see, but if it happens we shouldn't take it too seriously, since gold has been visiting pain equally on bulls and bears alike for the last several weeks. _______ UPDATE (Oct 13, 4:20 p.m.): And speaking of pointless histrionics, you had to love gold's $40 lunatic leap today after spasming $20 both ways in the early going. A short a millimeter off the intraday high produced a profit for the subscriber who reported the trade in the chat room, but the pullback made little progress as the hours went on, suggestion that bullion's 'DaBoyz' aim to take this gas-case higher. Here's a pattern so gnarly that I can all but guarantee that it will work in every possible way, including shorting at 1810.50 via a 'camouflage' set-up. That means you could buy a pullback to p=1780.20 'mechanically' with a stop-loss at 1770.10. That's $4000 of entry risk on four full-size contracts, so minis are recommended unless you are trading with winnings racked up earlier. ______ UPDATE (Oct 15, 7:29 a.m.): When the little p.o.s. plunged overnight to within 70 cents of my 1780.20 bottom-fishing number, I used this rABC pattern to drastically cut the entry risk to $480 on four contracts. The trade

Last week produced an exceptional one-day rally, then a sideways follow-through that looks like a bullish consolidation. The start of something big?  Probably not, but we should take the possibility seriously, since, if stocks have entered a bear market, that would be the kind of paradigm shift that could change a picture in bullion that has remained stagnant for a year. I've displayed a weekly chart to put the rally in perspective: it is not even a blip, at least not yet. Nor should we get too excited if a fresh burst hits the green line, triggering a theoretical buy signal of long-term degree. That's happened twice since last summer, only to fail with the creation of two new point 'C' lows. This time price action so far is arguably less bullish, since the reaction rally off mid-August's stop-'em-out low didn't even reach the green line, nor was it impulsive on the weekly chart. I can offer no trading suggestions at the moment, but if you are scouting the lesser charts for opportunities, please don't hesitate to ask about them in the chat room. _____ UPDATE (Oct 4, 5:10 p.m. ET): If bears can chew through p=1770 tonight they'll be in good shape for a follow-through to the 1792.40 target of this pattern.  Using 'camouflage' to avoid $1100 of entry risk per contract, buy a pullback to the green line 'mechanically' if the opportunity should arise, especially in the wee hours.  _______ UPDATE (Oct 5, 6:53 a.m.): The trade triggered at 12:39 a.m., 14 minutes after the futures pulled back to the green line (1758.90). The set-up, shown here on the one-minute chart, produced a gain on four contracts of as much as $480 in 40 minutes before gold peaked shortly thereafter and dove. Initial, theoretical risk would have been

The decisive breach of p=1755.30 last Thursday strongly implies a finishing stroke to at least D=1722.2o in the days ahead. As always, if that Hidden Pivot support is easily exceeded, the downside target of a bigger pattern would be in play. Meanwhile, the futures triggered a 'mechanical' short from the red line that in theory is still 'live,' since the downtrend has yet to touch p2 following the signal. However, if they were to rally to x=1771.90, that would activate a second signal to get short. The stop-loss would risk nearly $7000 on four lots, but I'd suggest cutting it down to size with a 'camouflage' trigger on the lesser charts. If you're uncertain about how to do this, ask in the chat room when the trade gets close. _______ UPDATE (Sep 29, 9:40 p.m.):  We used the 1722.20 target to get long near the low, which occurred at 1721.20. The bounce has produced a profit of as much as $2500 on four lots so far. Check my Trading Room posts beginning at 10:33 a.m. for details. _______ UPDATE (Sep 30, 6:49 p.m.): Usually a sharp rally in gold is barely worth a yawn, but I'm keeping an open mind this time. That's because the same distinctive tone change that may already have caused stocks to top big-time may correspondingly launch the resumption of a bull market in bullion that we've patiently awaited for more than a year.