Gold has looked so awful lately that I've gone against my gut in drawing the mildly bullish chart shown in the inset. It is a slightly 'reversed" ABC pattern, with a point 'C' just a hair beneath late March's 1683.00 low. The pattern projects to 1916.20, which would represent a 7% gain from Friday's settlement price. A 'mechanical' buying opportunity on a pullback to x=1737.50 is strongly implied, and so that is what I will suggest, at least for now. The trade would take a stop-loss at 1677 , implying about $24,000 of initial risk on four contracts. Since that is way out of our league, we'll use a 'camouflage' set-up if and when the opportunity arrives. Our goal would be to cut the theoretical entry risk by about 85%, to around $3600. _______ UPDATE (Sep 16, 9:04): Gold is garbage once again, diving hellishly just to mau-mau bulls. Since sellers look like they're about to pulverize the green line, I'll suggest backing away from the rABC set-up suggested above. the trade would still enjoy good odds, but at a cost of possibly excruciating pain. Ace Pivoteers can attempt the trade nonetheless with a camouflage set-up pegged to a low near 1700, the sweet spot of the downtrend's discomfort zone. _______ UPDATE (Sep 21, 11:47 p.m.): So far, a bullish prediction made by 'Som' in the chat room is holding up. He called for an upturn after Sep 17, and that is in fact what has occurred. I am skeptical about how far the rally can go, but not so skeptical that I would forego an opportunity to make hay with it, trading with an aggressively bullish bias until weakness becomes evident. In the meantime I'll gladly vet any entry strategies broached in the chat room, so don't hesitate to
Gold ground tediously higher last week, using a five-day consolidation at p=1816 to launch a relatively measly $18 rally on Friday. We'll continue to use the 1850.60 target shown (a slight adjustment from earlier) as a minimum upside projection, but don't look for the uptrend to blow it away, given the week-long dirge at the midpoint pivot. If gold shocks by doing just that, you can use the 1916.20 target of this bigger, rABC pattern to inform your trades. Since it is a reverse-bullish pattern, with 'C' below 'A', it should work nicely for 'mechanical' setups. ______ UPDATE (Sep 8, 8:01 a.m.): Far from shocking us with a strong follow-through rally, gold plummeted, as it so often does, for no good reason. Let's avert our eyes for the time being, lest we start to believe this frustrating price-action actually means something.
I've grown so skeptical of gold's rallies that I didn't even mention the textbook 'mechanical' buy the December contract triggered last week on the pullback to the green line. It was worth $5,000 to anyone who bought there, and more power to you if you did without waiting for me to confirm. Since the pattern has worked so nicely for bulls, let's use D=1829.60 as a minimum upside objective. If that Hidden Pivot is decisively exceeded, the new target would be 1851.50, calculated by shifting B-C up a rung. Either target is worth shorting if you've made money on the way up, but I'd risk no more than $80 per contract with a 'camouflage' set-up or rABC.
Gold's rally flattened dismally last week, but it was never going to get very far to begin with. A glance at the chart shows the relentless weight of the downtrend, punctuated the entire way by pyrite rallies. This one would become an enticing short via an rABC set-up if it gets to around 1885.00. That's right in the 'discomfort' groove, although we shouldn't get our hopes too high that it will be reached. If the futures instead roll down this week after failing to surpass last weeks high at 1797.60, look to go long against the trend near 1718.60 with as tight a stop-loss as you can abide. _______ UPDATE (Aug 23, 11:02 p.m.): The new 'C' high at (so far) 1809.10 has raised our bottom-fishing bid to 1730.10. It will likely change, so here's a chart to allow you to adjust it on-the-fly. If the futures rally above July's peaks, you can cancel the bid at the red line.
Gold spent last week turning the previous week's plunge into potentially gratuitous mau-mauing of bears by the nefarious forces that control bullion's price action. We'll take a cautious stance, since the rally has occurred off a quite-impulsive down-leg that is shown in the chart. For your peace of mind, I'd suggest being not quite as enthused about the rally as we were frightened by the still-pungent plunge. For the time being, use the pattern shown to avoid getting fooled. If the point 'C' high eventually migrates above the August 4 'externall' peak at 1835.90, I could warm somewhat to gold's intermediate-term prospects. As always, you should tune to the chat room and your email alerts if you want to stay apprised of timely intraday opportunities.
Strong employment numbers and the higher interest rates this supposedly will bring drove gold sharply lower on Friday, according to the usual experts. What rubbish! Gold dropped simply because it was time for it to drop. It's not as though the market actually divines the future and discounts it in a rational way. If investors possessed even a mote of rationality, gold would be trading above $2000, discounting the biggest monetary blowout in history. Instead, bullion looks poised to drop even further, since the bounce from an opportune midpoint Hidden Pivot support at 1763.30 was so weak that it's hardly visible on the hourly chart. (That didn't stop us from making money with some very precise bottom-fishing. Check out my 10:48 post in the chat room to see how.) For now, we'll use p2=1722.40 as a minimum downside target and 1683.50 as worst case for the next 2-3 weeks. This is jumping the gun, since I ordinarily wouldn't project another leg down until the midpoint pivot has been decisively breached. In this case, however, I'll give bears the benefit of the doubt, since they seemed so feisty on Friday. We can use the chart shown in the usual ways, to get long or short as opportunities arise, so stay tuned to the trading Room if you care! _______ UPDATE (Aug 8, 10:53 p.m.): The 1683.50 target nailed the low of an $85 death dive within three-tenths of one percent. Virtually any strategy you might have used to get long at the low -- or short ahead of the spectacular, gratuitous swoon -- would have produced a large profit with almost no pain. Maximum gain on the short position from the time the tout went out would have been a little more than $34,000 on four lots; the so-far bounce could
December Gold's promising mid-week rally died an inch shy of a mid-July's peak at 1839, disappointing bullion fans for the umpteenth time. The rally was impulsive nonetheless on the hourly chart, and that is why we should view the pullback, sharp as it's been, as merely corrective. We'll continue to use the 1858.60 target of a middling 'reverse' pattern as a minimum upside objective, but for trading purposes I'll suggest focusing on the bullish pattern begun from Wednesday's 1795.60 low. Stay tuned to the chat room for tradeable details as they develop in real time. _______ UPDATE (Aug 4, 8:30 a.m. ET): Gold has taken a stab higher today, slightly exceeding the midpoint Hidden Pivot resistance of a pattern projecting to as high as 1850.10 over the near term. We'll use that Hidden Pivot as a new minimum upside projection, since you can never go far wrong in gold by lowering your sights. Skeptical though we should be, a pullback to the green line (1818.70) would trigger a 'mechanical' buy sufficient appealing to warrant a rating of 7.0. We needn't treat p2=1839.60 as anything special, although a little extra caution there is suggested, assuming it is reached. Here's the latest chart. ______ UPDATE (Aug 4, 10:41 p.m.): The 'mechanical' long from 1818.70 barely survived the wickedest head-fake reversal we've seen in recent memory. All we can do now is stick with our game plan, implying a stop-loss at 1808.1, a single tick beneath today's hellacious low. It should be held o-c-o with an order to close out the position at p=1829.20. _______ UPDATE (Aug 5, 10:48 p.m.): The trade stopped out for a $4000 loss. This was the first losing trade using a 'mechanical' signal in as long as I can remember. The Hidden Pivot Method doesn't care how wacky
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.
