Gold

The impressive rally that began the week went nowhere, leaving the futures about where they were in early April. They triggered a weak 'mechanical' buy signal at 1718.10 (the green line shown in the chart) on Thursday at the closing bell, but I did not explicitly recommend the trade ahead of the three-day holiday weekend. It implies minimum upside to p=1770.10 over the near term, but we'll hang back on a possible belated entry until we've seen how things open Monday night. The 1713.90 'D' target/support shown in this chart would be a good place to attempt tightly-stopped bottom fishing if it were to occur overnight or early in Tuesday's session. _______ UPDATE (May 26, 11:06 a.m. EDT): Gold is once again on its knees, too tired to do battle with a rampaging stock market.  The Hidden Pivot at 1713.90 noted above yielded a $4 bounce that lasted all of seven minutes -- too feeble for any profit taking other than by the nimblest traders. _______ UPDATE (May 26, 9:08 p.m.): Gold has turned to dross yet again, unable to compete against a stock market that has gone loco. You could attempt bottom-fishing near 1680 provided  you know your rABCs, but otherwise I'd suggest spectating as the  futures fall to as low as 1652.40 over the near term. Here's the chart.

Gold has struggled for three weeks to fulfill the lofty promise of early April's strongly impulsive rally. While the tedium may have discouraged bulls, particularly when one of the downswings briefly devalued contracts by nearly $100, all of the pooch-screwing has had little effect on an 1873.90 target that has been in play since April 22. The fact that nearly a month's worth of Sturm und Drang has yet to get the June contract even to the 1770.10 midpoint Hidden Pivot has been frustrating, but it looks like it will not be much longer in coming. Bulls were poised to get there when last week ended, and unless Sunday night opens with bullion caught in a game of whack-a-mole, we should count on a test of the resistance by no later than early Monday. What we should want to see then is a decisive push past the pivot, or a two-day close above it, since either would make the 1873.90 target an odds-on bet to be reached. ______ UPDATE (May 9:56 p.m.): Before this agitated hippo plummeted today for no good reason, it exceeded two peaks recorded in mid-April, one of them 'internal', the other external. That is bullish, implying this pullback is merely corrective. _______ UPDATE (May 21, 8:59 p.m.): A pullback to the green line in this chart has triggered a 'mechanical' buy, but the signal is a weak one because the pullback was not 'textbook'. Plan on sitting the day out as June Gold enters its second month of sideways tedium.

The bullish pattern shown, which promised just a few short weeks ago to deliver a run-up to 1873.90, is close to succumbing. Since gold loves to push bulls to the point of despair before turning around, we shouldn't give up on it quite yet, even if the futures stop out longs with a feint below C=1666.20.  If the feint turns into a rout, we'll regroup with fresh analysis. The intermediate- and long-term outlook would remain bullish nonetheless, but we should get used to thinking of bullion's longer-term uptrend as a bullish market, rather than a bull market.  The latter is what we witnessed in the Dow Industrials, Nasdaq and the S&Ps, which rallied almost relentlessly for 11 years no matter what the news. Gold, in contrast, has been mostly marking time,  demonstrating with an oft-tortuous uptrend that the bad guys can no longer punish it for more than a few days. ______ UPDATE (May 7, 9:05 p.m. EDT): Gold's best rally in more than two weeks has given it a running start at the 1770.10 midpoint Hidden Pivot where bulls failed the last time. They'll need to close the futures above it for two consecutive days to make a push to 1873.90. an odds-on bet. That would also activate the pattern itself for 'mechanically' trading the various levels. _______ UPDATE (May 12, 6:56 p.m.): Gold continues to mark time with gratuitous $60 swings. They are tradeable, of course, and entertaining to watch if you hold no position, but no fun otherwise. The bullish benchmarks flagged above will remain theoretically viable as long as 1666.20 is not exceeded to the downside.

We'll keep the 1832.20 target broached here earlier firmly in mind, but the pattern shown is likely to be more useful for trading this vehicle over the next week or two. Today's push past the green line tripped a theoretical buy signal and implies the June contract will reach p=1772.60 at a minimum. If you trade gold actively, that midpoint Hidden Pivot can be used to set up a short sale, albeit one that could prove fleeting. A decisive push past the pivot would make further upside to the 1879.00 target an odds-on bet. In the chart, I have referred to the pattern as 'good enough for government work' because the impulse leg is technically illegitimate, with an extension above April 7's 1742.60 peak that did not exceeded any 'external' peaks as required.

I searched my archive for any mention of the neon target at 1788.7 shown in the chart but found nothing. This is embarrassing, like a scavenger failing to spot a Harley 'Knucklehead" rusting under a pile of hay in a New Hampshire barn. If I'd noticed this pattern, I would have been less enthused about touting the mechanical buy at 1711  a week ago. (I am relieved, however, that no one has mentioned it since, even some subscribers who said they'd done the trade.)  Be that as it may, the position went in-the-black for long enough to allow partial-profit-taking, and it could still come home. The hourly chart is still bullish as well, even if disappointing at the moment, and an ambitious target at 1832.20 broached here earlier remains theoretically viable.  I would hazard a safe way to get aboard, but the pattern that has traced out over the last couple of weeks is distributive and about as appealing as off-brand ketchup. _______ UPDATE (Apr 28, 9:16 p.m. EDT): A three-day dirge has taken a toll on buyers without doing much technical damage, even on the lesser charts. We'll keep an eye on the so-far ratcheting downtrend nevertheless, since it began from a high that failed to reach the 1779.10 midpoint Hidden Pivot of a clear bullish pattern. This is slightly bearish but would not become concerning unless the downtrend breaches 1666.20, the point 'C' low of the bullish pattern.

Buyers blew away a Hidden Pivot target at 1782.30 that we'd been using for a while and June Gold now looks bound for at least the 1832.20 target shown. The futures are all but guaranteed to get there if they can close above 1777.40 for two consecutive days or reach 1800.00 intraday.  We can use the pattern shown to trade the rally confidently. Most immediately, that would mean placing a 'mechanical' bid at 1711.11, the green line, stop 1670.60. A somewhat riskier trigger could be fashioned using p=1751.50, stop 1724.60, but I'd suggest paper-trading this one if you are unfamiliar with 'mechanical' entries. Even if you know what you're doing it would be best to convert the mechanical signal into a less risky alternative. Tune to the chat room for further guidance if the opportunity gels. Let me also mention, just to be on the record with it, that there's another rally target at 1886.20 that comes from the continuous daily chart. The futures would need to push decisively above the 1777.40 'secondary' pivot referenced above to imply that the higher number is a done deal. Here's the chart. ______ UPDATE (Apr 15, 9:44 p.m.): A buy at the red line (see above) never got airborne, but a 'mechanical' bid at 1711.10 still looks promising -- the moreso if it occurs early in the session. ______ UPDATE (Apr 16, 8:30 p.m.): Here it comes!  The best 'mechanical' trades will often test our nerves to the limit, since they trigger at the end points of brutal countertrend moves. This one would go 'live' at 1711.10, stop 1670.60, for a shot at 1751 or higher -- that's risking more than $4,000 per contract  -- but I'd suggest watching from the sidelines if you are merely curious about how well they work. The

The June futures have topped so far this evening less than a point from the 1775.10 rally target I'd flagged Sunday night ("Gold is down an unpersuasive $24 at the moment...").  The target may have been especially useful to subscribers who felt discouraged by gold's $30 drop after Thursday's close. I'd suggested buying on weakness using a 'mechanical' bid at 1722.90. It failed by a hair to trigger, but the point of it was to avoid hoping for the gift of a pullback all the way to the green line, where we initiate most of our 'mechanical' trades.  The chart raised the prospect of an rABC short, but it actually triggered at 1772.20 just after the chart was drawn and produced a $370/contract gain on paper. Here's the rABC pattern on the 30-minute chart: a=1772.80 (4/13 at 4:00 p.m.) Bulletin:  Gold's pop just now above 1775.10 means the June contract is on its way to at least 1782.30, a bigger-picture target we've been using for quite a while that could prove challenging to beat.

Gold is down an unpersuasive $24 at the moment, perhaps resting for more-challenging adversity in the wee hours. We remain focused on two rally targets nonetheless: one at 1782.30 that is tied to a big pattern that's been in play for more than a week; and another, lesser Hidden Pivot at 1775.10 that is shown in the chart.  Ordinarily we look to bid patterns like this one at the green line -- here 1696.80, and an implied stop-loss at 1670.60.  That's risking $24,000 on a four-lot trade, so I am recommending it only to those with the Hidden Pivot chops to cut the risk by 80% or more.  A buy at  the green line would entail about the same dollar risk (using a 1696.80 bid, stop 1670.60), although it would be somewhat less hazardous, as well- developed green-line entries tend to be. By that point, depending on the time of day, it may be possible to substitute GLD, or options on it, for the futures contract. _______ UPDATE (Apr 13, 8:15 a.m. EDT): The trade recommended above missed triggering at 11:00 p.m. by a micron. Cancel the order, since I'm not keen on sloppy seconds in this instance. If anyone filled the order using an rABC (a=1731.80 at 7:00 p.m. on the hourly chart) or a camo set-up, please let me know so that I can establish a tracking position. It could have produced a profit so far of as much as $8,600 on four lots.  

The 1679.20 rally target we used last week is still very much in play, but it will take a decisive thrust past it to imply buyers have the moxie to reach D=1782.30. A two-day close above the lower number would significantly shorten the odds of a move to at least p2=1730.70, but an intraday spike to around 1700 would be equally encouraging. That could conceivably set up a 'mechanical' buying opportunity on a pullback to x=1637 (the green line), so keep that in mind if the futures fall hard enough to make your stomach churn after rallying over the next day or two. _______ UPDATE (April 6, 8:38 p.m. EDT): Buyers have pushed the futures decisively past the 1730 secondary pivot this evening, implying they'll have little trouble reaching the 1782.30 target flagged above. Once past it, the June contract should be presumed bound for the 1857.90 Hidden Pivot shown in this chart.  This target is equivalent to one at 1852.00 that I projected for the April contract two weeks ago, when gold was $150 lower. _______ UPDATE (Apr 7, 9:40 p.m.) Buyers actually did have trouble when Monday night's running start reversed and turned into a rout. The 1782.30 target remains viable nonetheless, but we'll need to monitor June Gold's ups and downs closely to find a safe spot for re-entry.