Gold

Gold exploded last week after spending three weeks in a tedious consolidation. The April contract is bound most immediately for the 1336.00 target shown, but if it gives way easily expect the rally to continue to the next, 1345.50. It has required great patience to stay with the trend, but don't be surprised if it fools the herd by accelerating, since that is what few expect. I don't ordinarily recommend placing 'mechanical' bids at the red line (p=1313.50), but if it's touched on a pullback, we can use the signal to set-up a camouflage trade with risk tightly managed. Playing it by-the-book, a mechanical entry at 1313.50 would require a stop-loss at 1302.80. Alternatively, if the futures were to swoon violently down to the green line (1297.50), that would generate an even more attractive mechanical buying opportunity. _______ UPDATE (Feb 6, 5:17 p.m.): Gold has an annoying habit of testing two key Hidden Pivot assumptions: 1) that good trades seldom originate in one's psychological comfort zone; and that 2) the more vicious the price swings, the better mechanical set-ups work. And so it goes with the April futures at the moment, as they plummet toward the 1297.50 'x' level where an ostensibly appealing 'mechanical buy' would be signaled, stop 1281.40. Here's the chart. Let's see how it goes._______ UPDATE (Feb 10): The 1345.50 target remains viable, but I am no longer recommending entry via a mechanical bid because the pattern has strayed too far from 'textbook'.

Gold continues to make headway in herky-jerky fashion, failing to fully satisfy bulls but also denying bears much to cheer about. On Monday, the February Comex contract rallied to within a millimeter of the 1240.20 Hidden Pivot target shown. The pullback so far has been mild, encouraging the thought that the next pop will be good for a ride to 1259.80. Another encouraging sign is that some recent ‘mechanical’ buy signals in gold vehicles, including one in HUI, the Gold Bugs Index, have been winners.  We’d sworn off this type of trade in bullion after getting stopped out once in the futures, but they seem to be working again. This implies that buying enthusiasm has picked up a little over the last couple of weeks. For your information, the February futures is currently on a ‘mechanical’ buy signal that tripped at 1216.80, stop 1202.40.______ UPDATE (Dec 7, 4:00 p.m.): The February contract climbed as high as 1255.80 today. Just a smidgen more! We want buyers to blow past that Hidden Pivot, since that would announce their intention to push still higher. _______ UPDATE (Dec 12, 9:59 p.m.): Zzzzzzzzz. _______ UPDATE (Dec 16, 12:17 a.m.): The futures have rolled down without having achieved an 'easy' 1259.80 target, but also without having exceeded any external peaks on the most recent upthrust. Taken together, these signs of weakness suggest that gold's balky uptrend since August is not destined for greatness. We've made similar observations scores of times since the gold price peaked above $1900 in 2011, and the only thing that has changed is that bears have become too depleted to sell off bullion except for short periods when conditions are perfect. It is not a bull market we are seeing at this point, but neither is it much of a bear. _______

Comex futures have achieved the dubious distinction of being the only vehicle I trade that routinely fails to convert picture-perfect 'mechanical' trade set-ups into winners. That this has occurred in the context of a bullish pattern that goes back to mid-August suggests that buyers are too lazy and uninspired to shift a fundamentally positive chart into second gear. Well, at least gold is not moving in reverse.  But three steps up, two steps back has been a challenge to enthuse over. For now, and simply to chase boredom, you could try bottom fishing at p=1210.00 (see inset), with a 1210.10 bid, stop 1209.80. ______ UPDATE (Nov 28, 2:23 p.m.): The futures popped a $16 rally from 1210.50, four ticks above the 1210.10 bid I'd advised. Were we perhaps front-run by a Goldman mole who stays closely tuned to Rick's Picks?  In any case, I see the rally as a fake, since it was caused by a dovish Fed headline that had already been thoroughly discounted. Powell seemed to be saying what we all knew -- that the Fed might tighten the screw one more time in December, but that'll be it. The market jumped not because of this supposed news, but because every trade desk boss on earth knew that every trade-desk competitor would reflexively pounce on stocks in response.______ UPDATE (Nov 29, 9:41 p.m.): If this were any vehicle other than gold, I'd say the 1234.30 rally target shown here is a lock-up to be reached. Let's see._______ UPDATE (Dec 1): Friday's weakness was disappointing but not fatal. However, any lower -- specifically, a fall beneath 1216.80 -- would negate the 1234.30 target. _______ UPDATE (Dec 3, 11:07 a.m.): Apologies. I somehow got too busy over the weekend to post this chart, which highlights an in-your-face rally target for

Gold fell a further $13 on Friday, pausing just a few ticks above the 1206.70 target I'd sent out the night before. I say that the futures have merely paused because the void beneath that low looks like it wants to be filled. That would imply renewed weakness in the days or perhaps weeks ahead to at least 1190.50, the midpoint Hidden Pivot support shown in the chart. Notice that the worst case over the next several weeks would be 1134.90, a crystal-clear target that lies 6% below. A decline of that magnitude would be discouraging, but it would still be a far cry from the sub-$1000 prices that some bullion bears have long predicted. A half-hearted sell-off would reflect the reality that weakness since 2011, when gold's price hit a record high $1911, has been merely corrective of a long-term bull market begun in 2008 from $680. Sellers Unable to Deliver a Coup de Grace As persistent and vexatious as sellers have been since 2011, they have lacked the power to deliver a coup de grace. While it's conceivable that gold could eventually fall below $1000, there are no strong indications on the long-term chart that this is likely.  Indeed, price action since early 2016 has been bullish and could support a push to as high as 1452.60. This would be in the context of a decade-long bull market that could ultimately reach 2278.20. Click here to see the picture. _______ UPDATE (Nov 14, 9:34 p.m.): A sharp push past 1225.40 would re-energize bulls for a possible shot at 1254.10. Here's the chart.  _______UPDATE (Nov 15, 7:30 p.m.): This pattern looks extremely likely to work, meaning that a decisive stab past p=1216.30 will put December Gold on course for a run-up to exactly 1225.50. If so, that would set

Gold has once again fallen into a rut, dropping moderately for three consecutive days. This has occurred with the December contract having failed by $8 to achieve a $1254.10 rally target I'd flagged. The futures have since made a tentative bottom 0.60 above the $1212.80 correction target where I'd suggested bottom-fishing.  Thus did we narrowly miss catching the $5.40 rally that ensued. But will it get legs? I doubt it. Even so, lest we become depressed, consider today's chart (inset), which is quite bullish. Rick's Picks falls somewhere around the middle of the pack in letting gold's seemingly endless thrashing around, mostly southbound, discourage us. But we can still read a chart, and the one shown gives bulls the edge because of last week's upthrust to 1246.00. That slightly exceeded a July peak, creating a by-the-book impulse leg of intermediate degree.  To negate it, the December contract would have to fall beneath August's 1167.10 low. That's not out of the question, and we shouldn't be surprised if the futures do just that in order to jerk bulls' chains for the umpteenth time. Regardless, the uptrend begun in August deserves the benefit of the doubt, and any rally of $15 or more will kick it into mid-gear. _______ UPDATE (Nov 1, 9:43 p.m. ET): Use the 1242.20 midpoint resistance as a minimum upside objective for Friday. If the futures exceed it decisively intraday or close above it for two consecutive days, that would imply more upside to the 1279.09 target shown. _______ UPDATE (Nov 3): Zzzzzzz.  Let's give it another day or two to see how buyers fare at 1242.20._______ UPDATE (Nov 5, 5:54 p.m.): More waiting is what gold typically requires of us, followed by more frustration, then more disappointment. It has been in a correction for more than seven

One step higher, three steps back. At this rate, it could take most of the week for December Gold to reach our aging target at 1254.10. Alternatively, if that Hidden Pivot resistance is brushed aside, look for a continuation of the three-week-old bull cycle to at least 1260.80. Expect a tradeable pullback from that number if it's reached.  Even if it were certain the rally will achieve 1254.10 or higher, it is not tradeable if risk:reward is held constant at the 1:3 ratio I always advise. That's because the $2-or-so additional theoretical profit possible at each new high is followed by a $15 swoon, effectively generating a risk:reward of 7:1._______ UPDATE (Oct 29, 6:36 p.m.): The 1226.00 downside target I posted in the Banter Room Monday afternoon caught the bottom of a so-far $6.60 rally within a single tick. Subscribers reported using the target to get long in the futures, but also in GLD, an ETF-based alternative. I will be spending more time in the Banter Room in order to pick up the tempo there. All subscribers are invited, but I have requested that anyone who visits the room -- as opposed to the chat room, which is attracting mainly lurkers -- post at least once per hour, or once per session if the post is actionable._______ UPDATE (Oct 30, 9:01): Gold is once again doing what it does best, disemboweling the faithful. The futures tripped a 'mechanical' short from 1227.70 that is doing nicely. Half should have been covered at p=1222.80, predicated on a 1212.80 target. Cover another 25% at p2=1217.80 against a 1232.80 stop-loss for the two contracts that remain._______ UPDATE (Oct 31, 9:07 a.m.): Because I have reverted enthusiastically to my gold-is-garbage mantra, it is a perfect time to be on alert to the possibility of a

I've greeted rallies in recent weeks with unmitigated skepticism, and dissed gold every chance I got, but today's powerful upthrust did everything I'd asked of it, turning me -- and the hourly chart -- mildly bullish. The move was uncorrected as of the close, and so it's possible the impulse leg will become even more impressive, exceeding additional peaks without pulling back. For the time being, though, I'll suggest using the 1237.90 target shown as a minimum upside objective. It is woefully illegitimate because the A-B impulse leg clearly did NOT surpass any significant prior peaks. However, the pattern itself is sufficiently comely for us to use for targeting purposes. The move would become downright impressive if it surpasses the 1244.70 'external' peak recorded on July 23, especially if this were to occur without a significant correction en route._______ UPDATE (Oct 15, 9:53 a.m.): The December contract has fallen back sharply after rallying  $15 overnight to within 1.00 of the 1237.90 target I'd furnished. For purposes of establishing a tracking position, I've asked subscribers in the chat room for details concerning any positions they may have held or still hold. The downturn has come precisely, and coincidentally, from the 1236.70 midpoint resistance of the pattern shown in this chart. If it is brushed aside by buyers, look for the rally to continue to at least 1254.10. _______ UPDATE (Oct 21, 5:07 p.m.): Bears remain badly on the ropes after being impaled by October 11's big rally. However, bulls show no energy or enthusiasm for launching another leg higher. The stalemate could continue for a while, but the longer the December contract hovers at these levels, the more likely it will become to correct sharply to gain some running room. Click here for a fresh chart. ______ UPDATE (Oct 23, 11:08

Tuesday's strong upthrust got bulls' juices flowing in the Rick' Picks chat room, but I would caution you against letting your expectations get too high. Notice in the chart (see inset) that the A-B impulse leg begun in mid-August failed to surpass any of the peaks recorded when the futures were heavily distributed during the first two weeks of August. The doubts I've raised are nothing that another bullish pop on Wednesday or Thursday wouldn't cure, but we'll leave the burden with bulls until such time as that happens. In any event, the decisive move through the red line, a midpoint Hidden Pivot at 1205.40, has made December Gold a good bet to reach the 1226.50 target shown.  If they can do that and push just a little higher, exceeding an important 'external' peak at 1228.60 recorded on August 3, bulls can breathe a sigh of relief, since that would imply the rally is the first potential 'real McCoy' we've seen in a long while.

Gold's tiresome slog over the last month between 1190 and 1220 looks increasingly likely to end with a fall to at least 1165.30, a 'midpoint Hidden Pivot' support. If the futures fail to get traction there, look for more slippage to 1109.80. For gold bulls this would not be disastrous, only dispiriting. I still doubt that quotes will fall below $1000, not that that's going to cheer you if you've been nurturing a position acquired since 2011, when prices peaked just above $1900. If you're inclined to look on the bright side, click here. The chart shows that Comex futures could fall to as low as 1046 without negating a bullish pattern that projects to as high as 2278. We should remain open to the possibility, but if you want to be strictly objective about it, set a screen alert at 1391.40, since that is where the futures would generate a fresh, bullish impulse leg on the continuous monthly chart shown.