Gold

The futures did everything we expected last week, rallying to within easy distance of a 2765.80 target after falling a few points beneath the correction target at 2678 I'd provided. They will face a mountain of resistance when trading resumes, since there is not just the 2761 peak from December 12 to contend with, but also some distributive layers of supply from the record high of  October/November. If something out there is capable of spooking gold above all of this, perhaps we should be careful what we wish for.

Friday's move above my 2728.30 target was bullish and implies that a pullback would be merely corrective. I posted guidance that could have produced a profit shorting the retracement from the intraday high at 2735.00, but the position should have been covered before the close. This week, we could see more upside to as high as 2765.80, or even to 'voodoo' 2793.80, but more likely would be a pullback to 2678.60 first. You can try bottom-fishing there with a small rABC trigger to limit entry risk.

Last week's leap through the 2662 midpoint Hidden Pivot of the pattern shown shortened the odds of a further run-up to d=2728,30, but I doubt the rally will top the record high 2826 achieved on October 30. That's because of the power of the bearish impulse leg in November that took the February contract from 2826 down to 2565 in just two weeks.  This implies that quotes will fall to 2500 before this vehicle can get good traction. More immediately, a drop to the green line (x=2629.60) should be regarded as an opportunity to bottom-fish 'mechanically'. The implied $33 stop-loss means the trade should be executed only with a small-pattern (i.e., 'camouflage') trigger to reduce entry risk by at least 90% theoretical. _______ UPDATE (Jan 6, 9:43 a.m.): Using reverse a=2636.50 (15m, Jan 6 a7 2:45 a.m.) produced a quick, theoretical gain of $700 per contract, with two contracts covered at 2638.20 and two still 'live'.  The 'd' target lies at 2651.80, and a pullback to 2631.40 would trigger another 'mechanical' long, stop 2624.50. _______ UPDATE (11:16 a.m.) Feb Gold has pulled back $9 after coming within a dime of the 2651.80 rally target I furnished a little more than an hour ago (see above). Going by-the-book and using reverse a=2636.6 would have produced a profit of around $4,800 on four contracts. That assumes a 50% partial profit at p=2,638.20, 25% at p2=2645.00, and the last 25% at d=2651.80. _______ UPDATE (Jan 8, 8:26 p.m.): Careful, since the current uptrend may have limited potential. I'm using a 2728.30 rally target, and your trading bias should be bullish until the futures get there. If buyers surprise by blowing past this Hidden Pivot resistance, it would open a path to at least 2765.80 or even 2866.00.

I've labeled the impulse leg shown in the chart 'promising' because the pattern's point 'B' low crushed an external low the way reliable A-B legs are supposed to. So what does it promise?  Two things of value to us: 1) a profitable 'mechanical' short if the futures should rally to the green line (x=2696.00); and 2) the prospect of bottom-fishing when D=2500.00 -- a logical minimum downside target -- is reached. Because a gaggle of village idiots will be trained on round-number support there, we shouldn't count too heavily on a precisely tradable turn.  There is also a chance of that occurring from the secondary pivot, p2=2565.30. However, bottom-fishing there would need to be done with a 'counterintuitive' (i.e., rABC) trigger. Nudge me in the chat room for guidance in real time if I'm around. _______ UPDATE (Jan 2, 2:18 p.m. EST): I don’t trust today’s rally, but there is no percentage in trying to intercept it. The Feb contract is currently trading at 2668.30 and looks likely to achieve 2722.40. That would still leave it shy of December’s 2761.30 peak, let alone the record 2826.30 recorded on 10/30. One trade to recommend: buy a dip to 2628.10, stop 2596.70. Since that implies $12,000 of risk on four contracts, you would need to fashion a small-pattern trigger (aka ‘camouflage’) to cut the risk by 95% or more.

The three-day dance around p=2630.70 left me mildly bearish when the week ended, but not so bearish that I would recommend a 'mechanical' short at the green line. Although the bounce to the line will have occurred off our sweet spot midway between p and p2, the tedious, irregular C-D leg let off enough steam to flatten A-B's bearish energy. That energy is what makes 'mechanical' trades work and the reason why this gambit is unlikely to offer the edge we seek. In any event, the D target at 2500.00 remains my worst-case low between now and December 31. It will also provide good odds for bottom-fishing with a tight stop-loss.

The three-day dance around p=2630.70 left me mildly bearish when the week ended, but not so bearish that I would recommend a 'mechanical' short at the green line. Although the bounce to the line will have occurred off our sweet spot midway between p and p2, the tedious, irregular C-D leg let off enough steam to flatten A-B's bearish energy. That energy is what makes 'mechanical' trades work and the reason why this gambit is unlikely to offer the edge we seek. In any event, the D target at 2500.00 remains my worst-case low between now and December 31. It will also provide good odds for bottom-fishing with a tight stop-loss.

We'll find out soon whether Mr Slammy has bigger ambitions than the so-far two-day thrashing he has administered to gold futures. The small reverse pattern shown yields a target at 2643.00 that is probably the best bulls can hope for. You can bottom-fish there with a 'camouflage' trigger created from five-minute-or-less bars, but if this 'hidden' support is easily exceeded, brace for more downside to at least 2628.10. That's the midpoint Hidden Pivot support of a big pattern (A=2826.30 on 10/3) associated with a D target at 2497.40, a worst-case target for 2024. ______ UPDATE (Dec 17, 12:52 p.m.):  The futures have turned higher from within an inch of the 2643.00 minimum downside target given above.  A relapse would encounter 'voodoo' support near 2632.70 that can be bottom-fished with a small-pattern (aka 'camouflage') trigger. Otherwise, the so-far modest bounce will need to touch 2683.50 to suggest a recovery and become interesting.

Gold served up a second consecutive week of slop, making it difficult to guess what's on the minds of the thieves who manipulate it for a living (legally and with the Guvmint's complicity, of course).  However, enduring uptrends tend to produce relative weak countertrends, and that describes this one so far. It has twice penetrated to Hidden Pivot midpoint support at 2647.90, but without sending the futures down to the pattern's 2605.30 target. They could still get there, but bears might be drained of energy by then. Alternatively, a pop through C=2690.50 would signal a resumption of the long-term bull trend. Worst case: a two-day close beneath 2617.50, portending more slippage to as low as 2487.00 (daily chart, A= 2826.00 on 10-31-24).

The December contract cheated us out of a profitable 'mechanical' buy at the green line when it erupted for a 60-point rally without having quite touched our 'launching pad' at x=2598.80. Price action is bullish but not quite bullish enough to make the bounce a shoo-in to achieve the pattern's 2770.70 target.  We'll therefore begin the week without the usual confidence and clarity, so check for updates if there's any movement, since that cannot but shed light on the strength and resilience of the uptrend. My gut feeling is that it will achieve d=2770.70, but without making it look easy. _______ UPDATE (Dec 3, 3:58 p.m.): More sideways tedium this week has added nothing useful to an indecisive picture. I am proffering this chart nonetheless as a companion to the update moments ago of the Silver tout immediately below. Both need an upsurge through their respective midpoint Hidden Pivot resistances to signal the onset of a meaningful rally.