Gold

For years, gold's corrections have been brutal, and that is why many erstwhile bulls have not rushed to buy this rally. They have instead been waiting for a nasty pullback in order to load up at bargain prices. But Mr Market has not obliged. Instead, retracements have been shallow and rallies steep. The latter have often occurred after-hours, but in one recent instance via a trampoline bounce early in the day. By playing hard-to-get, gold is showing the most encouraging signs we have seen in a long, long while. This evening the August Comex futures have uncorked a 25-pointer, impaling a midpoint Hidden Pivot resistance at 1444.40 that is tied to a 1504.00 target first identified here weeks ago.  That is my minimum upside objective at the moment and it should be yours as well if you trade this vehicle. If you want to see how some pros are boldly trading the move so far using GDX call options, stop by the Rick's Picks Trading Room. You can access it by taking a free two-week trial subscription. Simply provide your name and email address at the top of the home page and you will have instant access to the entire site. No credit card is necessary. _______ UPDATE (Jul 30, 10:17 p.m.): Gold would need to fall $45 to invalidate the 1504 rally target noted above (click here for the chart). Stranger things have happened, but even that would not negate the bullish look of the daily chart.  In any event, we'll avoid the fray ahead of the Fed's "momentous" announcement concerning an expected 25-basis-point easing._______ UPDATE (Jul 31, 10:07 p.m.): The moderate selloff tripped a 'mechanical' buy signal at 1409.08, stop 1384.70. The trade is somewhat riskier than we should prefer, since the pullback from the top of the

August Gold pulled a Pearl Harbor on bears and skeptics Tuesday, reversing early morning weakness with a surprisingly sharp rally. I'd expected another two weeks of corrective action myself after bullion's impressive run-up in June. However, the chart (inset) shows the futures to be bound most immediately for at least 1446.90. If so, that would be a new recovery high and an encouraging sign that even bigger things lie ahead. Specifically, a 1504.00 target would be in play if the August contract closes for two consecutive days above 1444.40 or trades more than $12 above that price intraday. Please note as well that a $150 plunge from around 1460 would not be the disaster it might seem at the time; rather, it would set up a textbook buying opportunity according to the proprietary rules Rick's Picks subscribers follow for 'mechanical' trades. ______ UPDATE (Jul 7, 5:05 p.m. ET): Last week's surge peaked just shy of the 1444.40 midpoint resistance, implying that bulls have run out of steam for the moment. Here's a chart that shows it. The futures will still need to close above 1440,.00 for two straight days, or trade more than $12 above this Hidden Pivot intraday, in order to clinch a follow-through to 1504.00. In the meantime, there is no 'mechanical buy' set-up to use on the daily chart, since the rally topped well below our sweet spot before the pullback. _______ UPDATE (Jul 10, 9:29 p.m.): The futures are in the third week of the correction I'd forecast above, seemingly eager to break out of a 60-point consolidation range. The pivot at 1444.40 remains crucial to the completion of this task.

August Gold pulled a Pearl Harbor on bears and skeptics Tuesday, reversing early morning weakness with a surprisingly sharp rally. I'd expected another two weeks of corrective action myself after bullion's impressive run-up in June. However, the chart (inset) shows the futures to be bound most immediately for at least 1446.90. If so, that would be a new recovery high and an encouraging sign that even bigger things lie ahead. Specifically, a 1504.00 target would be in play if the August contract closes for two consecutive days above 1444.40 or trades more than $12 above that price intraday. Please note as well that a $150 plunge from around 1460 would not be the disaster it might seem at the time; rather, it would set up a textbook buying opportunity according to the proprietary rules Rick's Picks subscribers follow for 'mechanical' trades. ______ UPDATE (Jul 7, 5:05 p.m. ET): Last week's surge peaked just shy of the 1444.40 midpoint resistance, implying that bulls have run out of steam for the moment. Here's a chart that shows it. The futures will still need to close above 1440,.00 for two straight days, or trade more than $12 above this Hidden Pivot intraday, in order to clinch a follow-through to 1504.00. In the meantime, there is no 'mechanical buy' set-up to use on the daily chart, since the rally topped well below our sweet spot before the pullback.

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.