Gold

I've been so skeptical about gold's rallies for so long that I'll stick closely to the technical evidence to guide me this time, lest I miss the start of the real McCoy. Although the December contract looks almost certain to reach the 1223.90 target shown, I doubt that it will push far past it. That's because the point 'B' high of the pattern was so anemic, failing to exceed the mid-August peak. That would have generated a robustly bullish impulse leg on the hourly chart, making the current move more likely to get legs. Whatever happens, we should watch closely to see how buyers handle the Hidden Pivot resistance at 1223.90. If they demolish it, that would be reason to trade more aggressively with the flow. For now, however, traders should regard a move to that number as all but inevitable.______ UPDATE (Sep 13, 4:35 p.m. EDT): Today's punitive reversal actually increased the odds that 1223.90 will be achieved, since the intraday high generated a fresh bullish impulse leg on the hourly chart. Otherwise, the analysis above can stand as given. I am skeptical and no masochist, and that's why I am not gung-ho to jump on this vehicle, even when it looks 'good'.

Rick's Picks will always be a good place to visit if you're a gold bull in need of a reality check. I promise to call 'em as I see 'em, relying solely on charts rather than sentiment to guide my forecasts. Right now, those charts are saying one thing very clearly: gold sucks.  This pains me as much as it does you, since, like many subscribers, I've got ingots, Maple Leafs and Krugerrands socked away for that rainy day we all know is coming. And it truly vexes me that one can buy a St. Gaudens double eagle -- one of the most beautiful coins ever minted -- for close to melt value. (Hey, swap 'em for bitcoin, you jackasses!) Rally 'Too Subdued' Which brings me to today's chart, a picture of Comex Gold that goes back to late 2016.  Notice that the current rally off an 1167.10 low recorded two weeks ago has been rather subdued. Given that the prospect of a drop beneath the December 2016 low at 1162.00 should have scared at least some bulls out of their positions, we might have expected this rally to be steeper and livelier. Instead, it has died just shy of the green line where a "counterintuitive" buy signal would have been tripped (see inset). The so-far failure of the CI trade to trigger is a bearish sign. It suggests that another test is coming of the 1162.00 low, and that if support there fails, gold will be headed down toward 1000 to test a more important low that occurred at 1046 in the final days of 2015. That's the technical picture, and there is no way to sugar-coat it.

I am very skeptical of rallies in gold to begin with, but even moreso in this case, since the low from which it has proceeded occurred in far too obvious a place -- i.e., a few ticks above a key bottom at 1162 recorded in the final days of 2016.  Even so, the pattern shown qualifies as a moderately appealing 'counterintuitive' buying set-up. The actual signal to initiate the trade would occur on an uptick to 1224.70 (weekly chart, A= 1162.00 on 12/16/16). This looks like an odds-on bet at the moment, along with a continuation of the uptrend to at least p=1282.30 (assuming that p does in fact get hit). As always, we can use price action at p to tell us whether this rally is just another cruel tease. If the futures relapse without even having reached p, that would be cause for serious concern.________ UPDATE (August 28, 11:10 p.m. EDT): The futures relapsed to 1205.80 after getting withing $4 of the 1224.70 trigger point flagged above.  We'll continue to watch.

Gold ripped bulls a new orifice today, crashing a midpoint Hidden Pivot support at 1192.50 and greasing the skids to the 1140.30 target shown (see inset). The breach of the midpoint was sufficiently blunt that we can infer further slippage to at least 1140.30 is very likely. The December futures will have a chance to bounce from the 'secondary pivot' at 1166.40, but I wouldn't count too heavily on it. A rally back up to the green line (1218.60) would signal a mechanical short, stop 1244.80. ______ UPDATE (August 16, 9:10 a.m. EDT): The futures have bounced from 1167.10, less than a dollar from the secondary pivot noted above, after being down more than $17 overnight. The yellow flag is still out, and the 1140.30 target will remain valid in theory until such time as 1244.70 is exceeded to the upside.

Although there's still no compelling technical evidence that gold is headed below $1000, there would appear to be little chance that the December futures will not full a further $14 to the 1187.70 target shown (see inset). Traders looking to scalp a promising low can bid there (or slightly higher), stop 1186.90, but don't pass up an opportunity to take a partial profit on a rally of as little as $3-$4. Also, beware of the sleaze factor, since a subscriber  reported being unable to fill a 1202.90 bid Monday morning -- that had been my minimum downside target for the last several weeks -- even though the futures initially traded down to 1202.00 (and rallied $9 before relapsing).

Shifting to the October contract yields a compelling downside target at 1197.7o that can replace a projected range of 1192.70-1201.10 given here earlier for the August futures. Basis the December contract, this is equivalent to 1202.90.  As always, I'll recommend bottom-fishing this Hidden Pivot support aggressively only to subscribers who have made money being short on the way down. A rebound in the meantime to p=1240.60 (basis the December) would set up an enticing if belated 'mechanical' short. We'd want to execute it via a 'camouflage' set-up to significantly reduce the initial, theoretical risk of nearly $1200 per contract. ______ UPDATE (August 7, 1:22 p.m. EDT): So we're not caught unawares if enthusiastic buyers show up unexpectedly, I've set a chart alert at 1237.90, since a print there would turn the hourly chart impulsively bullish.

I disseminated a bearish target at 1192.70 last week, but August Gold will have an opportunity to turn from a lesser Hidden Pivot support at 1201.10 if the downtrend continues. The target is shown in the chart.  As you can see, its 1218.20 'midpoint support' has yet to be penetrated decisively; moreover, the downtrend has stalled twice exactly at the support. This means that although the target itself is not yet in play, it would become our precise objective if and when the midpoint is breached by more than $2.50 or so. Alternatively, we should want to see a pop above July 17's 1245.10 peak before we lower our guard even slightly.

Like September Silver, August Gold relapsed today after failing to reach a minor rally target that should have been a lay-up. However, for technical reasons I won't go into right now, the net result is not quite as threatening. It at least allows me to offer a bullish scenario, albeit one that will require gold to leap strongly before I wax enthusiastic again. Specifically, I'll stipulate that the futures must thrust above the 1245.10 peak labeled in the chart (see inset). Otherwise we'll have to assume that the downtrend is likely to continue to at least D=1192.70, a Hidden Pivot destination that has been six weeks in coming.

The August futures set up such an appealing buying opportunity for bulls Monday that several subscribers jumped on it when a timely 'mechanical' entry strategy was posted in the chat room. Alas, anyone who got long toward the end of the day watched the trade sink precipitously overnight, stopping out the position for a loss of around $600 per contract. As a rule, when a juicy Hidden Pivot trade set-up flops so miserably, it can pay to quickly reverse the position and do the opposite. In this case, however, going short seems no more appealing than going long, since bullion has been treating bears almost as badly as bulls. 'Too Much Hopefulness' My gut feeling is that the seemingly perfect 'mechanical' entry failed because there are still too many hopeful bulls out there. It would appear that they view each and every $20 rally as the first stage of a move to $2000, and that's why gold has acted so leaden.  Disrupting this familiar pattern and setting the stage for a sustained rally will likely require one last, brutal shakeout. That would logically imply a dive below the key low at 1230.70 recorded almost exactly a year ago.  If and when this happens, tune to the chat room for a possible 'counterintuitive' entry plan. In the meantime, I plan to ratchet up my skepticism and tune out the "Any-day-now!" bullishness of some of my guru colleagues. I'll let the charts speak for themselves. This might have saved us some pain, since I green-lighted Monday's trade even though gold had yet to exceed a 1274.40 benchmark flagged in my last update. For now, I will raise the bar to  1286.90. A rally over the next 2-3 days that hits that price would not likely be a fake. _______ UPDATE (July 17,