Gold

The 1838.10 target we used last week to stay on the right side of a challenging uptrend still looks like a good bet to be reached. Even certitude about this is no license to use a buy-and-hold strategy, since the risk/reward ratio stinks most of the time. The best way to get onboard when trading a vehicle that is as crazy-stupid and nasty as this one is with a mechanical bid. I flagged one last week at 1802, but with a warning that the the entry risk on four contracts was nearly $4000. As it happened, the position went $3200 in the hole on Thursday before the futures pulled out of a tailspin and reversed course sharply on Friday. At the close this gambit was showing a paper gain of around $3600 -- proof again that mechanical trades work well if they are predicated on textbook impulse legs. Subscribers unfamiliar with the tactic should paper-trade 'mechanicals' whenever I tout them to build confidence. ______ UPDATE (Jul 20, 9:06 p.m.): The 1838.10 target given above looks like a lock-up at this point, but here's a bigger-picture target at 1994.40 to wrap your head around. This is the first time I've mentioned it, and although I can't offer any guarantees, it would become an odd-on bet to be reached following a decisive push past p=1833.10 or a two-day close above that midpoint Hidden Pivot. _______ UPDATE (Jul 21, 8:36 a.m.): It is most encouraging that buyers have blown past 1833.10 this morning with a spike to 1843.20. Usually Comex futures give up most such gains achieved at this time of day, but perhaps not.  In any event, the rally certainly hasn't hurt bulls' chances of seeing 1994.40, perhaps soon. If this is the beginning of a powerful bull phase, it should happen within

Wacky price action can be leveraged using mechanical entries based on the pattern show in the chart. Wednesday's low missed filling a bid at the green line, but if the futures return there it would still be a decent bet, stop 1791.00.  The implied entry risk is more than $4000 on four contracts, so we'll want to cut it down to size using the lesser charts 'camouflage'-style if the opportunity arises. The 1875.20 target of a larger pattern remains viable, but we're taking it one step at a time since gold has shown no signs of becoming a friendly buy-and-hold. More like Chinese water-torture, actually. _______  UPDATE (July 16, 8:50 p.m. EDT):  Gold was more than mildly disappointing today, although its mini-plunge failed to stop out the mechanical bid I'd noted above. With no drama indicated on the chart, I'll suggest watching from the sidelines for now. I'll be curious myself to see whether the trade works.  The tactic is geared to exploiting violent swings, not the kind of gratuitous, sloppy meandering we've become used to in gold.

Gold's bullish slog has been tortuous, even if there has never been much doubt about where it's headed. The chart shows an 1875.20 target for the August contract that we've used to stay on the right side of the market and to keep the many setbacks along the way in perspective. A pullback to the red line at 1771.80 would set up a tempting 'mechanical' buying opportunity, but we shouldn't expect the market to oblige just because we've proven our patience. We'll continue to scalp off the Hidden Pivot levels with timely posts in the chat room, but  getting a piece of the final thrust to D won't be easy because gold is finally attracting its fair share of bulls. _______ UPDATE (Jul 14, 8:42 p.m. EDT): The pattern shown in this chart, with a target at 1825.90, can be used to get aboard as the futures slowly make their way toward the more ambitious target flagged above.  The A-B impulse leg is not exactly a killer, but it looks strong enough to favor mechanical entries on pullbacks to any of the three Hidden Pivot levels: p, p2 or D. Stay tuned to the chat room for timely ideas.

I predicted a two-week slog to the 1875.20 rally target shown in the chart, but the futures just blew an entire week screwing the pooch, so it could take significantly longer for the move to pan out.  A pullback to x=1720.10 would trip a 'mechanical' buy, stop 1668.30, but we'll be looking for opportunities in the week ahead to get aboard small patterns that have correspondingly lower entry risk. This could happen as early as Sunday evening if the August contract pushes above the 'external' peak at 1797.90 recorded Wednesday in the throes of a $40 dive. _______ UPDATE (Jul 6, 9:23 p.m.): The futures have popped through a clear midpoint resistance tonight, putting p2=1800.90 in play as a minimum upside target for the near term. If they get past it as well, especially with a decisive thrust, that would imply additional upside to at least D=1805.00.  _______ UPDATE (Jul 7, 8:58 p.m.): Use this chart, which shows an 1820 target, as your road map for the near term. The futures narrowly missed tripping a mechanical buy at the green line with the swoon to 1781 at dawn. _____ UPDATE (Jul 9, 9:41 p.m.): Rallies continue to exceed minor Hidden Pivot targets, including one at 1827.40 that I posted in the Trading Room on Wednesday. This suggests the rally is healthy and sustainable and that pullbacks should be bought. In gold in particular this is always going to be tricky, so I'd suggest staying close to the Trading Room if you want a piece of the action and a relatively low-risk entry spot.

After being locked in a tedious range for nine weeks, the futures have broken out in an unspectacular way. They are bound for the 1875.20 target shown in the chart, and we shouldn't be surprised if reaching it turns out to be a two-week slog. Getting aboard the uptrend intraday has been tricky, to say the least, but our best bet is with a 'mechanical' set-up. It's a bit much to ask, but a retracement to 1720.10, the green line, would be a back-up-the-truck opportunity. Smaller patterns may give us a chance as well, but we'll have to play it by ear. In any event, you can use p2=1823.50 as a minimum upside target for the near term. ______ UPDATE (Jul 1, 9:44 p.m. ET): The slog I told you expect could at times feel more like the Bataan Death March. Today, for instance. The plunge did not alter my bullish outlook, although it could create a potential tightly stopped buying opportunity at 1766.80. That's a Hidden Pivot midpoint support on the 15-minute chart, where a=1797.90 (8:30 a.m. on 7/1); b= 1767.90 (11:30 a.m.).

August gold rallied on Friday to within a millimeter of a 1762.40 Hidden Pivot that I'd said would show stopping power. The 1760.90 high was also a single tick shy of an external peak recorded on June 1. The shallow retracement that followed is encouraging on the question of whether a breakout is coming, but it would take a strong follow-through surpassing p=1772.90 in this chart to put the 1877.40 target seriously in play.  Mechanical trades initiated using the pattern have entry risk approaching $2500 per contract, but we may be able to use smaller patterns to get it done. As always, you should tune to the Trading Room if you're interested. _______ UPDATE (June 22, 8:49 p.m.EDT): The futures poked above 1772.90 (see above) for a moment but closed below it. This is encouraging but not quite sufficient to lock up a moon shot to the 1877.40 target. There are probably too many rightly enthusiastic buyers at this point for the futures to pull back to x=1721, but if they do, consider it a gift to traders looking for a high-odds mechanical entry, stop 1668.30. _______ UPDATE (Jun 24, 8:07): A head-fake to 1796 before DaBoyz pulled the plug would have stopped out any shorts from the 1790 level I'd flagged.  All bullish targets above remain valid in theory, but we'll wait and see what the little POS does on Thursday before we try anything new. ______ UPDATE (Jun 25, 6:30 p.m.): A day of tedium reiterated a 'mechanical' buy at x=1772.40 triggered Wednesday morning. We're not officially in the trade, but 50% should be exited at p=1786.50, worked against a stop-loss at 1758.30.

The psychotic pre-dawn spasm shown in the chart did nothing to alter an unexciting picture. As I have have said here repeatedly, gold is not in a bull market, but a bullish one. The former produces relentless rallies, with occasional swoons that are quickly recouped.  Gold has done no such thing. It continues to mark time with little institutional support, unable to compete for attention with the Mother of All Short Squeeze Rallies. For now, we'll consider gold's prospects one day at a time. The slight breach of the 1725.80 midpoint support suggests bears will have an edge over the near term. Even so, if you are comfortable with rABC trades and their ability to limit risk significantly, bottom-fishing at p2=1714.10 looks like a potential winner. Any significant slippage below this threshold would open a path to D=1702.40.  Alternatively, if the futures unexpectedly move higher, a push past 1748.40 would imply more upside to at least 1762.40, a Hidden Pivot that could show some stopping power. ______ UPDATE (Jun 23, 9:15 EDT): In after-hours trading the futures have speared a 1790 target I posted in the chat room this afternoon. Traders who got short there should have covered half of it around 1786.40, since the pullback to that number is equal to three times what was risked at the 1791.80 top.  For now, I'd suggest a 1790.50 stop-loss for the remaining half, o-c-o with an order to cover another 25% of the position at 1785.80.   

Gold had a lousy week, even dipping beneath a clear Hidden Pivot support on Friday to show bulls who's boss. The 1671.70 intraday low was a great place to have faded the trend, although not minutes ahead of the closing bell.  That's no assurance the selling won't continue next week, especially if the stock market rampages anew. For all the nasty selloffs we've seen in bullion over the last couple of years, bears have shown themselves to be just bullies, too cowardly to throw a punch unless investors' interest has been diverted elsewhere.  We'll continue to look for opportunities in either direction, but with no illusions about easy set-ups that can be detailed the night before. Stay tuned to the Trading Room for timely guidance. ______ UPDATE (June 8, 9:45 p.m. EDT): The futures have come within inches of the 1710.80 target I posted in the Trading Room at 15:31. The clarity of the pattern is sufficient to imply that even a small penetration of perhaps $1.50-$2.00 would augur still higher prices. Here's the chart. _______ UPDATE (June 9, 9:39 a.m.): Here's what's happening in GCQ at the moment: https://bit.ly/3h40CBo Gnarliest pattern ever, but with a sausage-y 'B'. I rate the mechanical 'buy' a 6.6. _______ UPDATE (June 9, 10:45 p.m.): If you bought on the pullback to the green line as suggested in my last update, you are currently sitting on a profit of $2400.  If I hear from two subscribers who did the trade, I'll establish a tracking position. Here's the chart. The 1736.30 target remains viable. ______ UPDATE (June 10, 9:51 p.m.): Gold is in its fifth week of range-trading, so we ought not be too presumptuous about what might occur next. If this is the usual failed rally, look for a top somewhere around 1772.90 [NOTE:

Gold has come crawling out of the gate Monday morning, down as much as $13 just ahead of the NYSE opening. The bounce from 1738.40 is mildly encouraging, however, since this level corresponds almost to-the-tick with a midpoint Hidden Pivot support. In theory, for uptrends to remain dominant, corrective abc patterns must reverse at or near their respective midpoint pivots as may be happening here. When this has occurred, we also know that a relapse breaching the pivot would likely find its way down to D=1730.00, whence a presumably tradeable bounce precisely from that Hidden Pivot would become likely.  In this case, the fledgling rally is approaching the point 'c' high of the pattern and would negate the pattern itself with a print at 1746.80.  That would be  reason for an added ounce of optimism, putting a 1754.40 target theoretically in play (15-min, A= 1728.60 on 5/29 at 4:00 a.m. EDT). ______ UPDATE (June 1, 7:05 p.m.): The 1754.40 target boldfaced above caught the intraday high within four ticks. I have slightly modified the pattern to show a 1770.00 'D' target that would become an odds-on bet to be reached if buyers can push the futures decisively past p=1753.80. Be on the alert for a 'mechanical' buying opportunity, since gratuitous swoons are always possible in this vehicle. _______ UPDATE (June 2, 5:15 p.m.): Gold's tortuous, mincing rallies, punctuated by gratuitously nasty plunges, have become too tiresome to be taken seriously. The futures are easily tradeable, however, using the Hidden Pivot tools at our disposal. Stay tuned to the Trading Room and post your technical observations if you care to interact with this vehicle.