Gold

The futures did all we'd asked of them Wednesday, pushing above a prior peak on the daily chart at 1286.20. Somehow, I still don't trust the rally, so we'll take a conservative approach to getting long. Specifically, I'll suggest using a 'mechanical' trigger at 1300.60 (i.e., the green line) if and when it is exceeded and then touched on a pullback meeting our simple criteria for this type of trade. I am suggesting a 'trigger' here because we can use it to get long via another tactic, 'camouflage', which has the potential to lower the $3800-per-contract entry risk to more like $60-$120 theoretical.  The trade will take at least 4-6 days to set up properly, so there's no rush.

The 1254.10 downside target we've been using to stay steadfastly on the right side of the trend remains viable and should be used as a minimum downside projection for now. Unfortunately for bulls, when December Gold peaked last week at 1285.10, it just missed surpassing an 'external' peak on the daily chart recorded nine days earlier. This would have generated a mildly bullish impulse leg. Alas, it was not to be, and the clear implication is that downtrend will continue. Because of gold's recalcitrant behavior, we should also raise the bar somewhat for turning bullish -- to 1293.00, a tick above an external peak recorded Oct 20 on the way down. If the futures instead fall to the target, you can bottom-fish there with a bid at 1254.20, stop 1253.80. _______ UPDATE (Nov 7, 6:01 p.m.): A prior peak at 1286.20 is the lowest and most immediate benchmark I can suggest for determining whether bulls are serious. Click here for the chart to see this moderately important hurdle in perspective.

Since there's no particular reason we should trust a rally in gold, let's hold onto the bearish, 1254.10 target that has served to keep us on the right side of the trend in recent weeks. That said, Friday's brisk upthrust barely tripped a 'counterintuitive' buy signal at the green line, 1275.20. That implies that our trading bias should be bullish at least until such time as p=1286.50 is reached. I'll recommend getting long either at will, via 'camouflage'; or 'mechanically' via a pullback to the green line after several 'lazy' bars have traced out above it. For now, unless you know how to execute a 'camouflage' entry, stay tuned to the chat room, watch and listen.______ UPDATE (Oct 31, 4:32 p.m.): Another failed rally. What a stretch! Zzzzzzzzz. _______ UPDATE (Nov 1, 9:33 p.m.): Gold's extremely tiresome chop points most immediately to 1286.50 (click here for chart), a minor Hidden Pivot. We can ratchet up our enthusiasm a smidgen if and when buyers decisively exceed it. ______ UPDATE (Nov 2, 5:17 p.m.): Now that wasn't very nice. DaBoyz goosed gold to an intraday high at 1285.10 that fell 1.40 shy of the rally target I'd provided.  Ordinarily a small pullback from somewhere just shy of a target is not bearish, but in this case the pullback was sufficient to wipe out the day's considerable but fleeting gains. We'll repair to the sidelines for now, but with low expectations as the week draws to an end.

December Gold's slight slippage beneath the midpoint support at 1281.30 shown in the chart (click on inset) is mildly bearish, implying as it does that sellers are about to push the futures down to at least 1254.10.  If and when the decline hits 1275.00, I'd recommend a 'mechanical' short on any subsequent 'lazy' rally back up to the red line. A stop-loss at 1290.40 is recommended.  This trade is intended only for subscribers who are comfortable using 'mechanical' entry set-ups. ________ UPDATE (Oct 23, 6:27 p.m.): Gold rallied today, generating a slightly promising impulse leg on the hourly chart. However, I'd suggest withholding the benefit of the doubt from bulls until we see how they handle the two precise benchmarks shown in this chart._______ UPDATE (Oct 24, 6:26 p.m.): Bulls in fact handled our benchmarks poorly, relapsing into their wonted dirge after topping at 1285.30, a measly 0.70 above the lower resistance shown in the chart. _______ UPDATE (Oct 25, 8:24 p.m.): The futures fought off sellers all day, yielding little ground. Even so, the 1254.10 downside target remains valid in theory and is still in play. A 1286.30 print on Thursday would put bulls mildly back on the offensive.

A short-lived rally from a midpoint support at 1281.30 (click on inset) came crashing back to down to the pivot on Friday. Although this Hidden Pivot has yet to be breached decisively, the burden of proof will be on bulls as the new week begins. Specifically, they will to push this brick above 1317.10 in the days ahead to show that they are serious.  Failing that, we should expect the decline to continue  down to 1254.10, a target broached here earlier.  This is frustrating price action, to be sure, but it's encouraging that bullion hasn't completely broken down at a time when institutional firepower has been trained almost entirely on the stock market.

December Gold's slight slippage beneath the midpoint support at 1281.30 shown in the chart (click on inset) is mildly bearish, implying as it does that sellers are about to push the futures down to at least 1254.10.  If and when the decline hits 1275.00, I'd recommend a 'mechanical' short on any subsequent 'lazy' rally back up to the red line. A stop-loss at 1290.40 is recommended.  This trade is intended only for subscribers who are comfortable using 'mechanical' entry set-ups. ______ UPDATE (Oct 19, 8:03 p.m. EDT): Today's price action didn't trigger the short suggested above, but neither did it disrupt the bearish target at 1254.10. The rally was bullishly impulsive on the hourly chart, however, and that's why we should give the uptrend the benefit of the doubt.  If it exceeds 1298.40 on Friday, then goes on to better a middling Hidden Pivot resistance at 1300.40, you can use 1323.20 as a target.

I'm tracking a single-contact position with a cost basis that has been reduced by profit-taking to 1204.80. At a current price of 1306.10, that would imply a theoretical gain so far of a little more than $10,000. On Friday, the futures leaped on the opening bar to 1304.90, a single tick from the 1304.80 target I'd sent out the night before.  After a moderate pullback of about $4, they reversed direction and headed higher into the close, topping at 1306.40.  This is bullish price action that implies the uptrend is very likely to continue. My immediate target is 1312.90, provided the futures can push past the 1306.80 midpoint pivot shown (see inset).  If the move through that number is quick and decisive, we should see more progress to as high as 1320.90 over the near term (60-minute, A=1262.80 on 10/6).  Raise the  stop-loss to 1286.70 for now, day order, but plan on hedging the long position with GLD options if and when 1320.90 is closely approached. Specifically, I'll recommend shorting one GLD Nov 3 125 call if GCZ17 is trading above 1319.80.  I estimate the calls will be trading for about 1.30-1.40 if the target is reached within a week. Mark the order good-till-canceled. _______ UPDATE (Oct 16, 10:35 p.m. EDT): Gold gave up all of Friday's nice gains and then some when the bad guys pounded the futures late in the session for who-knows-what reason. This generated a bearish impulse leg on the hourly chart, but I'll suggest using the 10-minute chart shown to get a precise read on the downtrend's strength. If the 1292.80 midpoint support gives way easily, look for more slippage down to at least d=1287.20. _______ UPDATE (Oct 17, 10:08 a.m.): This morning's downdraft stopped out the position by generating an even more powerful impulse

I am tracking a single-contact position with a cost basis that has been reduced by profit-taking to 1204.80. At a current price of 1293.10, that would imply a theoretical gain so far of nearly $9000. As is my custom, I track positions only when subscribers have reported initiating trades with actual money, based on explicit recommendations I have made, or on precise reversal targets that I've calculated using the Hidden Pivot Method. We are swinging for the fences with one contract that remains from an original four, all purchased when December Gold bottomed on Friday exactly at a correction target sent out the night before. The implied big-picture rally target is 1414.10, meaning we could conceivably rack up another $11,000 in gains before the bull cycle begun in July has run its course. In any event, I'll recommend using the 60-minute chart to fashion an 'impulsive' stop-loss like the one shown (see inset). That means you should exit what's left of the position if a downtrend exceeds two prior lows on the hourly chart without an upward correction after the first low has been breached.  The lower of those lows lies at 1277.70. ______ UPDATE (Oct 11, 4:26 p.m.): We continue to hold a single-contract tracking position with a cost basis of 1204.80.  The futures are bound most immediately for the 1298.80 target shown, but if buyers are serious they should be able to make short work of it.  That would indicate still higher prices are likely. For Thursday, stick with the 1277.60 stop-loss implied above. _______ UPDATE (Oct 12, 9:25 p.m.): The futures bettered my 1298.80 target by $1 and now look bound for 1304.80, based on the pattern shown.  A decisive move through p=1298.30 would all but clinch it. Raise the stop-loss to 1281.70 for now.

Using a correction target I'd sent out Thursday night, subscribers were able to get on board near the exact low on Friday, just ahead of a $16 rally. Accordingly, based on reports from subscribers in the chat room, I am establishing a tracking position of four contracts with a cost basis of 1263.00. When the futures resume trading on Sunday evening, I'll recommend exiting half of the position. As encouraging as the rally may have seemed, it will need to clear the 1293.20 'external' peak shown before we can relax. ________ UPDATE (Oct 9, 8:32 a.m. EDT):  The futures opened Sunday at 1278.60. Imputing the theoretical gain on the two contracts sold to the two still held gives them an effective cost basis of  1247.40. At a current price of 1283.80, the theoretical profit on the tracking position is $7280. For now, offer a third contract to close at 1289.00, good till canceled. ________ UPDATE (Oct 10, 8:08 a.m.): The futures have taken another leap, allowing an easy exit from a third of four contracts originally acquired. Imputing the paper gain to the single contract that remains gives it an effective cost basis of 1204.80 The theoretical position profit with the futures currently trading at 1295.20 is $9040.