Gold

August Gold's attempt to reverse from a morning sell-off prompted a subscriber to ask in the Rick's Picks trading room whether bullion is already getting second wind.  I doubt it, since June's sensational run-up was too steep to sustain and will likely require a breather of perhaps 2-3 weeks to recharge. But I do expect the uptrend to resume after a proper pullback because this month's surge decisively exceeded clear Hidden Pivot resistances at 1412 and 1432. This is usually a reliable sign that the dominant trend will continue, and it is quite clear in this instance.  Because the pattern took ten months to play out, it would be surprising -- and quite bullish -- if the futures do a '180' and blow past the 1432.70 peak within the next few days. Anything's possible, so we'll simply wait for gold to do its thing and to tell us what's on its mind. _______ UPDATE (Jul 1, 7:16 p.m. ET): Expect more weakness, since the futures failed to get airborne after tripping a 'counterintuitive' buy signal. Most immediately they could fall to around 1340.00 before picking up structural support from some prior lows recorded in mid-June. But if you want a precise Hidden Pivot target where a tradeable low is possible, use 1356.30 (60-minute, a=1427.80 on 6/27; b=1384.70). 

Although the rally is growing more convincing by the day, the chart shows some key benchmarks that will need to be exceeded to buttress the case for a sustained move higher. Specifically, there is a Hidden Pivot resistance at 1455.20 that we should expect to show some stopping power. There are also 'external' peaks from 2013 at, respectively, 1432.40 and 1487.90 that must be surpassed in order to refresh the bullish impulsiveness of the weekly chart. (The lower was missed by less than a dollar today.) Because the chart is a composite of many expired contracts, the Hidden Pivot levels and peaks are not exact.  But they should be close enough to actual -- i.e., within $3-$5 -- to be useful for gauging the strength of the rally and identifying its obstacles. ______ UPDATE (Jun 25, 8:12 p.m.): One obstacle overcome (1432.20), two more to go. But by exceeding the first, buyers generated a fresh impulse leg on the daily chart that will make any retracement holding above 1273.20 corrective and therefore potentially buy-able.

Bullion’s powerful rally this week has kicked this popular mining-stock vehicle into high gear. I haven’t tracked it in quite a while but aim to do so now, provided it remains feisty and interesting. In that regard, GDX looks like it’s about to ratchet up the interest-level, although not in a way we might have preferred. Notice that Thursday’s energetic short-squeeze brought the ETF within inches of a target at 25.58. This Hidden Pivot resistance can be used as a minimum upside objective for now, but don’t expect GDX to pop through it on the first try. More likely is a pullback of sufficient magnitude that you should consider taking a partial profit or doing covered writes in the range 25.42 – 25.70 if you are long.  Please note that if buyers should blow past D=25.58 with ease, that would imply that the target of a bigger pattern is in play. In this case, it would be 36.67 (!), a Hidden Pivot whose provenance goes back to a low at 12.40 recorded early in 2016. The lower target corresponds to one at 1412 for Comex August Gold that I disseminated to subscribers several weeks ago._______ UPDATE (Jun 24, 8:52 p.m.): Buyers shredded the 25.58 pivot, leaving little doubt about the underlying strength and potential of this move. _______ UPDATE (Jun 25, 8:28 p.m.): I neglected to mention an important Hidden Pivot resistance at 26.98 that can serve as a minimum upside target for the near term (i.e., the next 3-5 days).  It is the C-D midpoint tied to the 36.67 target noted above. Here's a chart that shows it. _______ UPDATE (Jun 26, 9:42 p.m.): GDX tripped a theoretical sell signal at 25.47 that implies it will fall to at least 25.21, or possibly to 24.67, if it slips today.

The futures have taken a powerful leap tonight, topping so far within easy distance of an ambitious, 1412.20 rally target we've been using for the last several weeks. Bloomberg and other bullion sources have not identified the catalyst at this hour, although it could be a statement from Trump that he believes he can replace Powell as Fed chairman. If this is in fact what has caused the spurt, T-Bonds have yet to register their disapproval. Regardless, August Gold would now trigger an old-style 'mechanical' buy if it pulls back to p=1342.70. The required stop-loss would be at 1319.50. (Trading room note this morning from Crusty: A 'counterintuitive' short would trigger on a pullback to 1346.70. We'll reconcile this seeming paradox if such a drop occurs.) _______ UPDATE (Jun 20, 10:54 p.m. ET): August Gold  has surged anew tonight, hitting 1415.40 so far. If it goes no higher, a drop to 1362.60 would signal a 'counterintuitive' short.  I am not recommending the trade, but if it triggers, especially within the next day or two, that would raise the odds that this monster move in gold is about to turn into a bull trap. Alternatively, an easy push past 1415 would suggest the rally is not only real, but sustainable.

We've been using the 1412.20 target shown in the chart to stay on the right side of the trend. It's not quite a done deal, however, because the rally pulled back to the midpoint pivot at 1325.60 for a day before getting second wind. This suggests, if not weakness, then a mild hesitancy. It will not likely prevent the futures from achieving D=1378.00, but we'll let price action at that 'hidden resistance' determine the odds of the higher target being achieved. Please note that a pullback to the red line would trigger a mechanical buy, stop 1308.10. A somewhat less risky bet would be to place our bid at the green line (1299.40), stop 1273.10. _______ UPDATE (Jun 11, 5:55 p.m. ET): If you bought at the red line (1325.60), exit half now for a profit of $560 per contract. Offer one of the two contracts remaining at 1347.30, o-c-o with a stop-loss at 1325.50 on two. _______ UPDATE: The rally has hit 1348.90 so far, allowing a profitable exit at 1347.30 on the third of four contracts (or multiple thereof) originally bought for 1325.60. The theoretical gain on this trade now totals $3290, plus an additional paper gain of $2170 for the contract still held. _______ UPDATE (Jun 14, 9:50 a.m.): I'm heartened to have heard from numerous subscribers who actually did the gold trade. At this point it's a straightforward play for 1412.20 on the final contract (or final 25% of your position). With a $6000 profit to cushion you, you can afford to give this one a generous stop-loss. An impulsive stop using the hourly chart would take you out at 1337.20.

Gold's $30 run-up over the last two sessions is the sharpest we've seen in a while. Was it just a knee-jerk reaction to continuing weakness in U.S. stocks? Probably. But we'll keep a close eye on it nevertheless, since gold sentiment is so negative, sometimes verging on despair. Many investors who have followed bullion's bear market closely since prices peaked eight years ago just above $1900 seem to get their hopes up every time gold rallies moderately. Disappointment has invariably followed, and then something worse as prices receded back into a rut. And yet, quotes have been too stubbornly buoyant for bears to triumph. Gold has been in a holding pattern for six years, defying predictions of a plunge below $1000 to shake out weak hands once and for all. It is a consolidation to be endured -- but also closely watched, so that we do not mistake the start of a bull market for yet another tiresome and vexatious head fake. In practice, for now, that will mean focusing on the three 'external' peaks shown in the chart (inset). If this move exceeds all of them without much of a pullback on the intraday charts, that could be a sign that we are witnessing something more than just a tease.

Gold's $30 run-up over the last two sessions is the sharpest we've seen in a while. Was it just a knee-jerk reaction to continuing weakness in U.S. stocks? Probably. But we'll keep a close eye on it nevertheless, since gold sentiment is so negative, sometimes verging on despair. Many investors who have followed bullion's bear market closely since prices peaked eight years ago just above $1900 seem to get their hopes up every time gold rallies moderately. Disappointment has invariably followed, and then something worse as prices receded back into a rut. And yet, quotes have been too stubbornly buoyant for bears to triumph. Gold has been in a holding pattern for six years, defying predictions of a plunge below $1000 to shake out weak hands once and for all. It is a consolidation to be endured -- but also closely watched, so that we do not mistake the start of a bull market for yet another tiresome and vexatious head fake. In practice, for now, that will mean focusing on the three 'external' peaks shown in the chart (inset). If this move exceeds all of them without much of a pullback on the intraday charts, that could be a sign that we are witnessing something more than just a tease. ______ UPDATE (Jun 3, 6:42 p.m.): This is the steepest three-day rally we've seen in a long while. It would exceed 1335.70, the last of the three peaks mentioned above with just one more modest push. If it can get past a fourth 'external' peal at 1347.90 recorded in February that isn't labeled in the chart, that would raise the odds that this rally is about to get legs. Specifically, it would put into play the 1412.20 target shown in this chart. Note that our minimum target at present

Bulls failed on the last upthrust to take out a 1293.10 'external' peak recorded in mid-April, but we'll give them the begrudging benefit of the doubt anyway because bears seem even more enfeebled right now. A push above p=1292.10 in the early going on Monday would put the futures on track to hit D=1304.00. We'll watch for a 'mechanical' buy set-up to develop in the meantime, since such opportunities are few and far between in this oft-leaden trading vehicle. _______ UPDATE (May 13, 11:34 a.m. ET): The futures have popped to 1300.70 today, making them an even better bet to hit the 1304.00 target. They did so, however, without having pulled back to a mechanical bid that would have triggered at 1286.20. For the record, I regard the so-far $13 rally as pretty weak, considering that the Dow is down nearly 600 points at the moment.______ UPDATE (May 13, 9:40 p.m.): The futures topped at 1304.20 tonight, two ticks above the rally target provided above, before pulling back by $4 [and now $29!]. The next thrust would need to exceed 1314.70, equal to an 'external' peak recorded on April 10, to refresh the bullish energy of the hourly chart. _______ UPDATE (May 19, 10:39 p.m.) Selloffs are as unconvincing as rallies, so we should be surprised if this one takes out lows near 1268 recorded within the last month. If it does, use 1256.80 as a target.  Here's the chart. ______ UPDATE (May 23, 2019): I love this rally -- to get short, that is! You can do so mechanically at 1292.40, stop 1304.20. The chart linked in the May 19 update is still relevant. ________ UPDATE (May 29, 10:06 a.m.): Cancel the short. I'm hating gold as usual, but somewhat less so at the moment because it could head-fake

Requiring buyers to hit 1293.20 before we give gold the time of day has paid off once more by keeping us from getting sucked in by this morning's ill-fated rally. The futures hit 1292.80 before doing what they always do -- i.e., turning tail with a vengeance. The selloff so far has amounted to $11, but because of our 1293.20 stipulation, we were not among the bulls who got trapped by unwarranted enthusiasm. The chart (inset) shows new downside levels and targets. The lowest of them lies at 1245.40, and it closely corresponds to a bigger-picture target at 1244 that aired here earlier. This Hidden Pivot support will become my minimum downside projection once gold has bounced from yet another Hidden Pivot support at 1262.70 that has kept us properly cautious for nearly a month.