Bulls struggled last week to hold above a key Hidden Pivot support at 1702, but their failure to endure portends more downside over the near term to 1630.50. That's my worst case target for now, and although the chart pattern that produced it is highly unconventional, using a visually obvious 'marquee' high and a point 'B' low that failed to exceed any significant prior lows, it's all we've got. The pattern is certainly good enough for government work, meaning a tradeable reversal at or near D is highly likely. We will remain open-minded nonetheless toward the unthinkable -- i.e., a decisive breach of the 1630.50 pivot that would imply an eventual test of the 1467 watershed low recorded exactly a year ago. A relatively minor 'hidden support' at 1660.40 mentioned here earlier also remains viable and can be used to bottom-fish with a very tight stop-loss. Gold clearly does not like anything Powell has to say, even when his obfuscations suggest the Fed will continue to pursue inflationary policies with reckless abandon. So why doesn't bullion rally on that prospect? Perhaps it understands that the inflate-or-die effort is ultimately doomed. Even so, that is hardly a reason for bullion prices to have fallen relentlessly since last August's $2100 high. _______ UPDATE (Mar 8, 7:05 p.m. ET): A downside target at 1667.20 that I flagged in the chat room has surfaced as a possible "best case" for a turn. If you use a 'reverse ABC' pattern to set up a trade, the A-B segment can be as tight as 10 points, provided you plant the point 'C' low within 1.00 point of the target. Here's the chart. ______ UPDATE (Mar 9, 4:29 p.m.): The futures have levitated themselves off a 1673 low that stranded our niggardly bid, but I have little
Although I can offer no guarantees that the 1702.00 downside target shown in the chart will definitively end gold's seven-month dirge, it looks promising to produce at least a temporary bottom and a high-odds spot for bottom-fishing. A tightly-stopped limit bid very near the target is one way to go, but if you're proficient with 'reverse ABC' (rABC) set-ups, try using the 1759.00 low recorded on February 9 as point 'A' before you start positioning 'C' somewhere below 1703.00. This trick will still leave about $1400 of entry risk per contract, but you can cut that by as much as 80% using an 'artificial' point 'A' at 1782.20, last Wednesday's low. A third option, for Pivoteers who have been attending Wednesday classes regularly, would be to employ a 'camouflage' trigger on the five-minute-or-less chart. _______ UPDATE (Mar 3, 3:50 p.m. EST): The April contract struggled to hold above the 1702.00 target, but if it gives way you should brace for more slippage to D1=1660.40, or thence to D2=1630.50, my worst case low for the bear cycle begun last August. D2 requires using the 'marquee' high, A2=2107.60 -- an unusual choice, but our only option if the downtrend progresses. So far, D=1702.00 has been exceeded by just 2.60, not enough for us to infer the Hidden Pivot support has been compromised. Each of the targets can be bottom-fished with a risk-averse set-up based on the Hidden Pivot method, but if the last is reached, you can be more aggressive.
Bears couldn't finish the job last week, stranding a fine-looking Hidden Pivot target at 1749.80 with a feeble rally to end the week. The target will remain valid nonetheless until such time as 1878.90 is exceeded to the upside. If and when that happens we shouldn't get too excited, since bulls too have been unable to achieve 'D' targets associated with similarly reliable patterns. For trading purposes I'll suggest backing up the truck to buy 'em if the futures get within 40 cents of 1749.80. A stop-loss as tight as 1747.90 can be used if the order is filled. _______ UPDATE (Feb 22, 4:37 p.m. EST): The futures went the 'wrong' way, getting nowhere near our bid. However, despite the seeming strength of the rally, it conspicuously failed to surpass an 1814.20 'external' peak made on the way down last Tuesday. The peak seems likely to be exceeded soon, but the inability of bulls to accomplish this on the first try suggests that the coming rally is not destined for greatness. _______ UPDATE (Feb 24, 7:33 p.m.): No sooner was the 1814.20 peak exceeded than gold receded back into its wonted state of fake mournfulness. The 1749.80 downside target is still in play theoretically, but I'm not encouraging anyone to give it much thought.
Gold remains easily tradeable not only on the intraday charts, but on the 'daily' as well. A routine 'mechanical' short sketched out here last week produced a quick profit of $3100 per contract, even if the set-up was uninspiring. Traders should have no illusions, however, that they will be catching the start of a major move. since the long, tedious slog lower since last August offers no hint of a significant turn. The correction at the December low amounted to just 16% off the 2107 high recorded in August, not even qualifying as a bear market. Nor has the correction produced a bearish impulse leg on the daily chart; that would take a breach of the 1704 low recorded last June. Wake me if this happens, or if a powerful stab higher takes out November's 1978 high -- an event that would be bullishly impulsive and suggest gold might be on its way to as high as 2284. _______ UPDATE (Feb 16, 10:03 a.m. EST): The futures are getting pounded today for no good reason, presumably bound for the 1765.50 target shown. They typically do not reach D targets in either direction, but in this case the precipitous move through p suggests selling will go the distance. Here's the chart. _____ UPDATE (Feb 17, 8:37 p.m.): A so far feeble bounce has occurred from within 2.40 points of the 1765.50 target, but it would take a print at 1795.20 to lift bulls from immediate jeopardy. _______ UPDATE (Feb 18, 9:43 p.m.): Gold got barely any bounce from the 1765.50 target. This means it is about to fall to 1749.80, where you should look for a tradeable bounce. Here's the chart.
Gold turned last week from within an inch of a secondary pivot at 1782.10 that I'd drum-rolled in the chat room. It was an afterthought, although I sometimes like to half-joke that all vehicles in all time frames, whether trending up or down, tend to reverse at p2. The rebound picked up steam on Friday, but we should wait at least until it exceeds the green line (1846.60) before breaking out a bottle of Ripple to celebrate. This would generate a moderately appealing 'mechanical' short, although I'll suggest letting it pass, since gold is not actually weak, just rigged to appear that way. That implies the 1749.80 downside target (see inset) will not be reached, but we'll let the chart speak for itself rather than guess about the future. ______ UPDATE (Feb 9, 7:50 p.m.): The asphyxiating southbound slog since August's $2107 high will likely have been nearly as unsatisfying for bears as for bulls, since it has amounted to a mere 10% pullback, punctuated by feisty rallies to nowhere, over the six-month period. The futures tripped a mechanical short today with a rally to the green line (1846.60), but it doesn't feel like a winner. I guess that makes me slightly bullish for the near term, since it implies a pop above C=1878.90. _______ UPDATE (Feb 11, 7:16 p.m.): The 'mechanical' short is up $1900 per contract at the moment, but 1814.40 is where it should be covered,for a gain of $3200. Use an 1840.00 stop-loss for now.
My outlook and trading advice for silver is more bullish than for gold at the moment due to the latter's punk performance on the hourly chart. I tend to treat each separately in such instances rather than have feelings about one vehicle corrupt the accuracy of my forecast for the other. In this case, Silver looks primed to drag Gold higher. How's that, you ask?? Well, the Reddit brats reportedly are intent on short-squeezing silver because they don't like the way DaScumballs who rule precious-metals markets often manipulate bullion quotes lower to cover short positions at bargain prices. We sincerely wish the brats all possible success in this worthy venture, but they ought to read Bunky Hunt's epitaph before they get carried away with themselves. Concerning Feb Gold, there is mild evidence to support the case for a fall to p=1811.60 of the pattern shown (using the circled peak as 'C'), or even to D=1745.80. The equivalent numbers for the April contract are p=1814.40, and D=1749.80. Looking at the charts in toto, though, it's clear that bears are not having any more success than bulls at profiting from bullion's ups and downs. Under the circumstances, I am making no recommendation, nor even ballyhooing a target. It could go either way, and I'm having difficulty caring which right now. _______ UPDATE (Feb 4, 9:16 p.m. EST): Here's the April chart, with a secondary (p2) HP support at 1782.10 that I didn't mention earlier. I proffer it now to those clinging to the hope that this unwarranted and gratuitous shakeout won't be quite as bad as it could get. ______ UPDATE (Feb 4, 9:25 p.m.): The little weasel plunged to 1784.60, an inch shy of the 1782.10 target flagged above, before rebounding moderately into the close. The rally will become more credible
Gold has been screwing the pooch for five months, vexing bulls and bears alike. The most promising rally over the period was the 200-pointer that occurred between October 30 and January 6. It failed by an inch to exceed an important November peak at 1973, however, casting doubt on a pullback that now threatens to inundate the daily chart. A far larger, bullish structure going back to 2016 remains quite robust, however, and the 1450 print it would take to seriously impair it appears to be out of bears' reach for the foreseeable future. _______ UPDATE (Jan 26, 8:36 p.m. EST): This pattern is my kind of gnarly. Play for a bounce from p=1810.20 with a stop-loss as tight as you can abide. ______ UPDATE (Jan 28, 9:36 p.m.): Today's stupid spasm changed nothing.
Gold futures seem poised to head at least moderately lower this week after failing to exceed anything significant on the last rally. The pattern shown projects to a 1751.60 Hidden Pivot support. That would negate the point 'C' low of a far bigger, bullish pattern projecting to as high as 2166.90. December's failed rally did not quite reach the 1967.10 midpoint resistance, telegraphing the weakness that has followed. In a headline last week, I told investors not to give up on gold. That is still my advice, although we cannot rule out the possibility that the weakness will eventually test March's watershed low at 1461.70. I seriously doubt it will get that bad, but in the meantime, absent an impulsive rally exceeding November's 1973.40 peak, a turnaround does not appear to be in the cards. ______ UPDATE (Jan 19, 5:35): How unimpressive was today's rally? Unimpressive enough, actually, to trigger a so-so 'mechanical' short at 1835.90, stop 1864.10. We shall see. ______ UPDATE (Jan 20, 7:40 p.m.): The rally stopped out the point 'C' high of a bearish pattern, but I still don't trust it. I've set my snooze alarm at 1973.40, a tick above a key 'external' peak made on 11/9. If February gold prints there, bulls will gain some credibility and the futures will be on their way to a 2166.90 target I haven't mentioned in a while.
Much as I'd like to encourage you, the chart offers little reason for enthusiasm over the near term. It was hard not to notice on the last rally that bulls were too enfeebled to reach the midpoint resistance at 1967.10 (see inset), let alone impale November 9's 'external' peak at 1973.30. Even more dispiriting, the subsequent downdraft generated a bearish impulse leg on the daily chart when it exceeded by a decisive $2.90 an 'external' low at 1820.00 recorded on December 14. Taken together, these signs suggest that we should not get our hopes too high looking out perhaps 6-9 days. The bigger picture remains bullish but unexciting.
The somewhat persuasive trendline shown in the chart yields a 1931.70 rally target at week's end that sits about 2% above current levels. I'd suggest using this number as a minimum upside objective, since the trendline looks more interesting than any Hidden Pivot patterns I can offer you at the moment. There is one projecting to 1949.80 (daily, A =1820.00 on 12/14), however, that appears serviceable as a minimum 'extension' target if 1931.80 should be easily pushed aside. Either of these number can be shorted with a stop-loss as tight as 0.80 points if you've made money on the way up. _______ UPDATE (Jan 4, 7:59 p.m.): Today's so-far high has gotten within 0.60 of the 1949.80 target. Now, the 1967.10 midpoint Hidden Pivot shown in this chart promises to take the guesswork out of what's coming next. You can make it your minimum upside objective for the very near term. _______ UPDATE (Jan 6, 8:02 p.m.): The intraday high of today's bull-trap rally failed not only to reach our p=1967.10 benchmark, it also failed to clear the 1973.30 'external' peak recorded on 11/9. I believe that gold sellers got the news wrong today and that the weakness was an opportunistic sucker punch. Even so, the technical warning signs are not to be ignored, so let's stipulate that the futures must close for two consecutive days above p, or trade more than $15 above it intraday, to earn back our confidence.
