Gold

This chart revises our downside targets somewhat to, respectively, a minimum p2=1467.10; or D=1447.50 if any lower. The A-B impulse leg is a clean one that allows a little more room to the downside than the smaller pattern given earlier. It is setting up for a 'mechanical' short at 1506.20, but because initial risk on a 1526.00 stop-loss would be nearly $2000 per contract, we'll look for an alternative entry trigger on a lesser chart. An rABC set-up using the hourly might work, but we can play it by ear until such time as 1506.20 is achieved. ______ UPDATE (Oct 22, 10:19 p.m. EDT): The longer gold moves sideways, the less attractive the short trade would become. At this point, I'll treat any rally exceeding 1508.00 as a bullish opportunity, with immediate upside potential to 1535.90 (60-min, A=1467.90 on 10/1).  _______ UPDATE (Oct 24, 6:15): The 1507.00 midpoint resistance of this pattern looked shortable when it was first hit this afternoon, and at least one Trading Room denizen did so on my suggestion. However, even though the pullback would have  produced a profit of $240 per contract at the subsequent low, the shallowness of the correction suggests buyers are revved up for another bull leg.  Assuming they blow past p on Friday, that would imply the futures are bound for at least D=1513.80. ______ UPDATE (Oct 25, 8:51): The overnight thrust through 1507.00 all but guarantees a run-up to at last 1535.90 off this pattern, which has appeared here before (see above).  It has been reactivated and energized -- perhaps sufficiently to use a 'mechanical' bid at 1507.00 to get long belatedly. The stop-loss would be at 1497.30.

The daily chart remains unmistakably bullish, but this correction, which is about to enter its third month, continues to try our patience. For the moment, the futures are under the spell of 'Matt's curse,' which holds that a trend reversal precisely from p2 is likely to exceed 'C', stopping out the pattern (see inset). So far, December Gold has bounced weakly from p2 twice without exceeding 'C'.  This is a punk performance, for sure, but it's no reason to bet against bulls and a possible rally to as high as 1525.90 (a=1467.90 on 10/1) this week. If the futures should relapse, though, brace for a fall to 1458.70 (60m, A= 1522.30 on 10/0), or 1450.50 (A=1540.30 on 9/25) if any lower.

Gold looks like it will need to correct further before it can resume the steep bull trend begun in late May.  Most immediately, the December contract would trigger a 'mechanical' short if the bounce from Friday's low hits x=1507.00. Your stop-loss would be at 1525.90, implying initial risk of $1900 per contract. This is a promising pattern as far as 'mechanical' opportunities go, meaning I regard odds of a relapse to D=1450.50 as high. However, if the trade is stopped out, you could bank on more upside to at least 1535.90 over the near term (60-min, A=1467.90 on 10/1 at 10:00 a.m. EDT). Here's a GLD chart if you want to try the mechanical short but don't trade futures.  The bounce off Friday's low would need to hit 141.54 (stop 143.26) to trigger the trade).

Rick's Picks subscribers were probably among the few traders who made money Monday on the long side of gold. In the process of falling by more nearly $20 from Sunday night's high, the December contract rallied $8.70 early in the session, allowing us to catch half of the move on an rABC pattern for a quick, lovely gain. In the trading room, actual profits reported in slightly less than an hour ranged from $410 to $520.  You should check the chat room scroll to see whether the discussion might have activated, and then enabled, your interest. The trade had been mentioned Sunday night as a possibility pending the creation of a point 'C' low for the relevant pattern. It came at around 9:12 a.m., and although I mentioned in my post at that time that I wasn't too enthused about the buy side, the opportunity looked too good to pass up. And now, looking just ahead, the futures appeared bound still lower --- to at least D= 1487.20 if p=1493.50 is decisively penetrated. If you trade this vehicle, stay close to the chat room for real-time guidance.

Gold survived a hostile 'news' day on Friday, bruised but unbowed. The nutty swings left the December contract in good shape to achieve the 1542.10 midpoint pivot shown in the chart. As always, an easy and decisive move through this resistance would make the 1619.10 'D' target a odds-on bet to be achieved. Since there is as much as $11,000 of potential profit in the trade per contract, we should be alert to entry opportunities that occur on the lesser charts intraday. An rABC setup on a 5-minute chart, for instance, can cut initial risk by as much as 95%, provided we are quick.

The chart shown simplifies the short-term picture as much as possible. Although we do not usually rely on 'reverse' ABC patterns like this one to trade against, they are proving their worth when used analytically. In this instance there is a clear 'D' target at 1517.80 that we should expect to show some stopping power. If it proves to be a pushover, and particularly if the futures close above it for two consecutive days, that would set up an almost certain test of late September's peak near 1543. Alternatively, a pullback to the red line (p=1491.30) can be used to get long 'mechanically', stop 1482.50. Please note that initial theoretical risk would be $880 per contract, so the trade is not recommended for beginners or small accounts. ______ UPDATE (Oct 3, 8:31 p.m. ET): Buyers shredded the 1517.80 pivot, implying more upside to come. Now, if the futures touch 1515.90 without dipping below 1510.60 first, that would put a 1532.40 target in play. The midpoint resistance lies at 1521.50 (30-min, A=1504.00 on 10/3 at 9:30 a.m.). _______ UPDATE (Oct 4, 9:26 a.m.): News-related histrionics have negated the trade. The futures have since tripped two minor rABC 'buy' signals that have produced profits at their respective midpoint pivots but which were out of reach for trader not spring-loaded and glued to the 5-minute chart.

The futures have consolidated sufficiently to be ready for another big leg up. However, a glance at the daily chart suggests bulls may need to be shaken out one last time before December Gold can get off the launching pad. From an rABC/CI-trade standpoint, the ideal 'C' low would occur in the very small space between September 18's 1490.70 low and August 13's 1488.90. You should use A=1490.70 to generate a green-line (x) trigger  (see inset) even if the point 'C' low winds up being slightly beneath 1488.90. Obviously, this trade is intended for experienced Pivoteers.  Don't hesitate to jump on it, though, if there is sufficient clarification in the Trading Room to make you feel confident about participating. _______ UPDATE (Oct 1, 12:35 a.m.): The rABC pattern has yet to trigger a buy signal but is still valid, albeit with a point 'C' low that would be well below 'counterintuitive' range. Assuming tonight's 1468.60 low holds, the trade would trigger at x=1481.80 (with a profit target of p=1494.90).  Please note that that would imply more than $5000 of theoretical entry risk on four contracts. _______ UPDATE (Oct 1, 11:12 a.m.): The rABC buy signal drum-rolled above triggered at 1478.70 and has quickly propelled the futures to within a hair of a profit-taking opportunity at p=1492.50. Sudden and sharp as the rally was, a stop-limit order at 1478.70 would likely have been filled, since the futures dipped back to 1478.70 a few minutes after breaking out above it. _______ UPDATE (Oct 1, 9:45): The futures have pulled back moderately after triggering the trade noted above and getting buyers to a profit-taking level at p=1491.30 (revised slightly). Several subscribers reported having done the trade and making money on it. However, I didn't establish a tracking position because the opportunity played out

Although gold ended the week on an upswing, this occurred within the visual context of the corrective pattern shown in the chart. The pattern's A-B impulse leg is formidable, and that's why we shouldn't get too excited about the approximately $30 rally that has unfolded since the futures bottomed at $1490 last week. Note that that rally has generated a somewhat enticing 'mechanical' short at the green line (1513.70). We ignored it nonetheless because it was a risky bet to have taken home over the weekend.  Let's see what Sunday night brings before we act.  As of early afternoon, there were no disconcerting geopolitical developments that might send the markets into spasms.  Iran's Houthi proxies were threatening another attack on Saudi oil facilities, but that will have registered only dimly on Wall Street's go-go trade desks. _______ UPDATE (Sep 23, 5:52 p.m.): The futures have turned sharply from within a hair of stopping out the bullish pattern with a 1622.90 target first identified here nearly six weeks ago. For now, use its 1555.90 midpoint pivot as a minimum objective (and not for the first time, either). _______ UPDATE (Sep 25, 9:27 pm.): The futures were in a so-far feeble bounce Wednesday night after getting socked for a $23 loss intraday. The rally began in a too-obvious place just above some minor lows from last week, raising the odds of another swoon to put in a good bottom.

Gold's response to news that Iran destroyed a key Saudi oil facility is shockingly feeble so far. The futures are up $15 at the moment, but the rally has yet to surpass even a single important peak on the hourly chart. It also denied us an opportunity to get long via a 'counterintuitive' set-up predicated on a dip below 1488.90. As things stand, the 1622.90 target we've been using for a month is still in effect, but we'll need to see more buying enthusiasm before I can recommend jumping aboard. Specifically, a breakout above September 6's  peak at 1536.20 would put the 1622.90 target well in play again. _______ UPDATE (Sep 16, 9:03 p.m.): The CI set-up noted above may yet materialize, so stay tuned to the chat room if you're interested. _______ UPDATE (Sep 18, 9:54 pm.): The prospect of a dip below 1488.90 has dragged on for so long that I am no longer much interested in the 'counterintuitive' trade noted above.  The futures can still be worked, but if you're eager for action, it might require close attention to the intraday charts over the next two days.