Gold

Gold traders have been beating themselves bloody for nearly a month, creating innumerable price reversals slightly above or below prior highs and lows. This kind of price action reveals that the algos, whom I sometimes refer to as droolers, are so hooked on what we call 'impulse legs' that their supercomputers will often be a step behind traders who think like traders and can second-guess dumb machines. The chart reveals a particular telling instance of trend failure -- one implying that we should favor the bears at the moment even if their edge is slight.  The bearish pattern shown has a midpoint pivot at 1880.80 that can serve as a minimum downside target for now; and a D target at 1822.20. (p2=1851.50). _______ UPDATE (Oct 21, 11:53 p.m.): Price action has become extremely tiresome. Here's a bullish alternative to what I've written above, but I offer it without enthusiasm or encouragement; it is strictly informational.

Gold will need a couple more days like Friday, went it shot up $41, to signal the likely end to the consolidation begun in early August from a record 2089.20. Specifically, an 'external' peak at 1983.80 recorded in mid-September must be exceeded to generate the first bullish impulse leg on the daily chart since July. The immediate potential thereafter would be to 2050.60, the midpoint Hidden Pivot resistance of this pattern; and eventually to D=2250.10. All of this will of course depend on the dollar, whose weakness would turn ugly, if not to say impulsive, if it starts the new week as badly as it ended the last. _______ UPDATE (Oct 14, 7:35 p.m. ET): Bulls are working MUCH harder than bears to push this vehicle around. Even after struggling for altitude over the last 30 hours, they have yet to recoup losses that the bad guys inflicted on gold in a mere 90 minutes the day before. Price action has been too tedious to monitor closely, but I will recommend nonetheless that you bottom-fish at p=1895.20 (click here for chart) with as tight a stop-loss as you can abide. An rABC set-up with a very short A-B leg  (i.e., 8 points or less) should be suitable for this purpose. If the trade gets stopped out, it would shorten the odds of a further fall to D=1872.90. _______ UPDATE (Oct 14, 10.09 p.m.): The 1895.20 pivot worked out exactly, to the tick.  Here's the chart.  If you bottom-fished there, even a one-tick stop-loss would have worked. Your profit at the moment would be about $2600 on four contracts. Exit half and manage the rest at your discretion. _______ UPDATE (Oct 15, 8:09 a.m.): A few subscribers reported jumping on the trade in the chat room and making substantial gains. I'm

Gold was probably oblivious to news of Trump's illness on Friday, but not to the modest upswing in the dollar. As a result, the December futures couldn't hold onto a $7 gain achieved overnight. The intraday high occur an inch above the 1921.90 Hidden Pivot I'd proffered as a target the night before, but that's not enough to assume with confidence that the subsequent pullback is going to be a consolidation for another leg up on Monday. Bulls held the edge at the bell nonetheless, and as long as they don't let the futures dip below C=1885.80 (see inset), they shall remain favored. _______ UPDATE (Oct 5, 5:27 p.m.): The rally on dollar weakness may have looked impressive, but it exceeded zero 'external' peaks. The closest lies at 1925.50 (9/21 on the hourly chart), and let's hold the applause until it has been breached on a closing basis or decisively bettered intraday. ______ UPDATE (Oct 6, 8:18 p.m.): The timid poke above 1925.30 should have fooled no one -- but it obviously did, given the way gold collapsed on news that Trump had taken stimulus talk off the table.  The bullish trend since  Sep 28's 1851.10 low remains intact nonetheless, but the burden of proof has shifted heavily onto bulls. Whatever happens, plan on bottom-fishing with a tight stop-loss if and when the futures fall to the 1838.00 target shown in this chart. _______ UPDATE (Oct 9, 8:59 a.m.): This morning's so-far $33 upsurge would need to tack on an additional $56 to become technically significant. Here's a chart that explains why.

Gold wasn't quite believing the weakness in the dollar or it would have racked up an even bigger gain on the day. Even so, each of the three upthrusts that occurred Tuesday exceeded a prior peak, refreshing the bullishness of the intraday charts and suggesting that higher prices lie ahead. By day's end, the December contract had slightly exceeded a 1904.20 target I posted in the chat room. This was neither bullish nor bearish, but the so-far shallow pullback to 1899.60 is. Let's see how bulls do over the next day or two dealing with thick supply between here and 1925.00. _______ UPDATE (Oct 1, 6:07 p.m. ET): Just a little more push will connect with the 1921.90 Hidden Pivot target shown in this chart. A decisive move past it on first contact would be bullish.

The upward blip at week's end did little to alleviate gold's distress. Continue to use D=1838.30 as a minimum downside objective -- and yes, you can attempt tighty stopped bottom-fishing there, especially if you've made a few bucks on the way down. December Gold's interaction with D is bound to be telling, since the target is so clear and compelling. A decisive penetration to the downside would be bearish, and a two-day close beneath it still moreso. Alternatively, if bulls are about to turn things around, the process would begin with a pop above 1898.30. This is equal to an 'external' peak a tad higher than the one given here earlier.

Gold has been screwing the pooch all summer, so there's no point in my trying to say something interesting. The December contract settled on Friday at the same price where it was trading on July 26,  and that's the story. The dramatic plunge in the second week of August proved to be inconsequential, a gratuitous bit of nastiness intended by Mr Market to disillusion bulls who may have begun to imagine that quotes would be basing above $2000. Bears have been disappointed repeatedly as well, since they've failed to push the futures down to p2=1884.70 (see inset), let alone to the D=1838.00 target of the corrective pattern shown.  I've set a wake-up call at 1980.50, since that's where the bullish story would start to become interesting again. A longstanding target at 2142.50 remains valid but is not worth pondering at the moment. The general impression is that bullion has been biding its time, albeit with an upward drift, waiting for the financial crisis that everyone knows is coming. _______ UPDATE (Sep 16, 5:18 p.m.) : A timid, fleeting poke to 1983.80 woke me but has left me groggy. A subsequent $23 pullback was less than inspiring, although hardly a disqualifier of the bullish outlook. _______ UPDATE (Sep 20): Zzzzzzz. _______ UPDATE (Sep 21, 9:51 a.m.): Gold is breaking down from the pennant formation I featured in last week's impromptu 'disaster' presentation. Here's the bearish pattern to watch now, with likely minimum downside to p2=1885.40.  If bulls are going to turn things around before then, it would occur near 1910-11. _______ UPDATE (Sep 21, 9:05 p.m.): The futures bounced to-the-exact-tick off an 1885.40 downside target that I posted in the chat room when the futures were trading around 1917. This dead-center bullseye allowed numerous subscribers to report winning trades from the

A 2142.40 rally target we've been using for nearly a month remains valid, although the wait is becoming an ordeal. Bulls seem in no hurry to get there and are probably even less enthused about trying when they're vulnerable to a smack-down. They usually come on days when Wall Street's energy is focused on pumping stocks full of hot hubris, or when Powell says something that is easily construed as bullish for America. Whatever exuberance spills thereupon into stocks is lost on gold, which gets kicked, like some nerd in the playground, just for the sin of looking weak. Even so, it cannot be lost on gold bulls that these take-downs do not last for long, and that they almost invariably fall short of 'D' correction targets. I can only counsel patience for now, but if one of those silly smack-downs hits 1855.00, be ready to jump on the futures aggressively. Here's a chart with the relevant pattern. _______ UPDATE (Sep 9, 10:58 p.m. ET): This chart corrects the earlier one, which had an erroneous 'B' low.  The new price where you could try bottom-fishing aggressively is p2=1884.70. Alternatively, a pop exceeding 2004.10 would put bulls solidly back in charge.

December Gold has struggled quietly since tripping a theoretical buy signal at 1941.30 more than two weeks ago.  The 2142.40 target still looks likely to be reached, but the presumptive consolidation has grown more than a little tedious. Bears could not have gotten much satisfaction either, since, except for a savage pounding they administered the second week of August, the futures have refused to give up any ground. Regardless, the December contract still needs to close above p=2008.30 for two consecutive days, or trade above 2030 (or so) intraday, to make a run-up to the target an odds-on bet.  The gratuitous swings are tradeable in the meantime, but only with diligent attention intraday.

Gold looks like a coin toss right now, with dueling impulse legs pointing in both directions. However, I'd bet on bulls to achieve the 2142.50 target eventually, even if the December contract corrects down to d=1837.10 first (see inset). The key, oddly enough, will be how quickly AAPL achieves its bull-market target at 537.23. They don't ring a bell at market tops, as the saying goes, but the 4-to-1 stock split in AAPL next Monday is for all intents and purposes the bell that will signal an end to the most dollar-consequential mania in stock-market history.  If the target does in fact prove to be the top in AAPL -- the 4-to-1 split price would be 134.30 -- gold could begin moving higher before the bottom drops out of shares. The most important caveat is the dollar, which is groping for a bottom and may have made one already. A strong dollar will put pressure on bullion, to be sure, but the effect would become muted over time due to rising perceptions that the world is going to hell in a handbasket. Nothing could hasten that perception more than shifting odds of a Biden victory. This is an outcome that very obviously is NOT priced into the market, and I am predicting a Trump landslide myself. But even four more years of Trump offers no guarantees that the global economy will pull out of its pandemic-induced tailspin. The resulting writedowns of capital that are already in motion --  New York City, for one, and a dozen other large cities that taxpayers are fleeing -- represent a deflationary enormity almost beyond imagining. It is coming, though, and that's why the stock market must fall, with AAPL leading the way. It could take as long as four to six months for the