Gold

Friday's strong finishing stroke to a generally positive week created the first bullish impulse leg we've seen on the hourly chart in more than a month. Under the circumstances, caution is warranted if not necessarily skepticism. Trade with a bullish bias when activity resumes Sunday evening, but don't expect to get aboard the easy way, since the steep pitch of Friday's opening bar will have turned more than a few fence -straddlers into fickle fans. The rally would begin to look interesting if and when it exceeds the 1260.00 peak that I've labeled. Until then, however, the 1194.40 downside target we've been using as a minimum downside target will remain very much in play. _________ UPDATE (Jul 20, 12:06 a.m. ET): Thursday's rally generated a minor bullish impulse leg on the hourly chart. Now, if buyers can push this vehicle above June 28's 1255.70 peak by the close, bulls would have something to feel good about over the weekend._______ UPDATE (Jul 25, 6:15 p.m.): A minor correction on the hourly chart suggests a possible buying opportunity:  Bid 1246.00 for a single contract, stop 1245.40.  Click here for a visual explanation._______ UPDATE (Jul 26, 8:51 a.m.): Suh-prize suh-prize. Gold looks like crap yet again, having stopped out the bottom-fishing gambit advised above for a $60 loss. The overshoot of the downside target implies more weakness to come, presumably to test lows recorded a week ago near 1235.

We've been using an 1194.40 correction target for a while, but today's chart, a continuous daily, shows a bigger picture that is intended to ward off despair. First the bad news.  The red abc pattern projects to as low as 1100.60, a $116 drop from these levels. That is my worst-case scenario for the next 8-10 weeks, and the odds of this target being reached would shorten if the futures were to close below 1195 for three consecutive days.  The good news is that there is a much larger, bullish pattern that has so far prevented selloffs in 2017 from turning seriously ugly. The pattern projects to as high as 1452.60, but July Gold would need to rally decisively above 1288.30, a midpoint Hidden Pivot, to become an odds-on bet for a shot at that target.

August Gold is struggling to hold above a 1217.50 Hidden Pivot support and would need to pop to at least 1248.30 in the next 3-5 days to get out of jeopardy. Failing that, we might expect the futures to continue down to at least 1194.40 in search of traction. That is the midpoint Hidden Pivot of the large corrective pattern shown, and it seems likely to provide a great bottom-fishing opportunity if and when it is touched. In the meantime, I'd suggest trading with a bearish bias, presumably by shorting minor abc rallies at D targets or p midpoints, or by using 'camouflage' set-ups to initiate such trades with-the-trend.______ UPDATE (Jul 11, 8:24 p.m. EDT): Let's set a high bar, since we don't want to get sucked in by a garden-variety bull-trap rally. The move should clear the external peak at 1229.50 shown before we start to celebrate it.

Monday's swan dive brought the futures down to within a hair of the 1217.50 target we've been using since this vehicle last traded above 1250. In lieu of bottom-fishing with a 'camouflage' set-up, I'll suggest using only a 'counterintuitive' trigger to get long -- but only if you have mastered this tactic (and understand why, for one, the point 'C' low does not come to exist until the trade happens). This would entail jumping on a rally like the one I've sketched hypothetically (see inset). Ideally, it would begin from a point 'C' low Wednesday in the range 1218.50 (already achieved) - 1216.80. Be sure to take a partial profit if the anticipated rally reaches p. My gut feeling is that the futures eventually will work their way down to March lows near 1200 before they can turn around._______ UPDATE (Jul 5, 11:42 a.m. EDT): Officially, the 'counterintuitive' (CI) entry won't trigger even if the futures rise to x=1236.80, since Gold's would-be point 'C' low fell three ticks beneath the bottom of the range I'd specified above. Even so, the lesson should not be lost concerning how well these set-ups work. Look out below if this brick cannot make it to x=1236.80 now that it has stopped out bulls beneath the important low from May 9.

I'd set the bar for turning bullish again at 1268.50, but we needn't wait till that threshold is reached to jump in on the long side. Each of the last two thrusts refreshed the bullish impulsiveness of the hourly chart, and that is sufficient to warrant nibbling around the edges. For starters, that would have meant using a conventional entry trigger at 1257.60 on Friday (see inset) to get long. Since the opportunity is past, I'll recommend placing a 'mechanical' bid there for two contracts once the futures have traded up to at least 1258.50 and executed a 'lazy' pullback lasting for at least three bars to the green line. Your stop-loss would be at 1255.10. I've sketched this hypothetically for your further guidance, but you shouldn't do the trade unless you fully understand the two conditions governing 'mechanical' entries._________ UPDATE (Jun 26, 10:27 a.m. EDT): Gold marginally exceeded my 1258.50 threshold but couldn't sustain altitude for even a second consecutive bar, so there was nothing done on the trade. The subsequent collapse has been about par for bullion these days -- i.e., egregiously overdone and far more disappointing than the last rally was encouraging. This is a commodity simply marking time, and the tedium and frustration won't end until the dim bulbs who get paid to throw Other People's Money at the markets wake up one morning in a very different mood that is favorable toward gold.  Exactly what might cause this mood change lies beyond speculation at the moment. In any event, the selloff in the August contract still looks bound for at least 1217.50.  Alternatively, it would take a pop exceeding 1268.50 to turn the hourly chart bullish.

The futures crushed a 1245.90 Hidden Pivot support on the hourly chart, implying there is more punishment in store for bulls. If so, a test of support near the May 9 low at 1220 seems likely. It is a more compelling downside target than any Hidden Pivot support I could offer you at the moment. If a low-risk buying opportunity looms, it will likely be by way of a 'counterintuitive' signal generated by a bounce off a low near 1220. We'll monitor August Gold's vital signs closely in any case, but it would take a rally exceeding 1268.50 to suggest bulls are turning things around

Gold's ups and downs have grown increasingly tiresome, largely because the rallies are so disappointing and the setbacks so punitive. But look at the bright side: If bullion can hold its own at a time when institutional investors continue to shun it, just think how well it's going to perform when the portfolio managers finally get their heads out of their butts. Meanwhile, take a look at the chart (inset) in order to put the piddling decline of the last two weeks in proper perspective. It began from exactly where it should have -- i.e., a major midpoint Hidden Pivot resistance -- and the weakness since has not retraced even half of the run-up from the May 9 low. The visual picture suggests a boring but essential consolidation within a much larger, bullish pattern. The futures would become a 'mechanical' buy for the third time since March if they were to fall to the green line, but if you did so on the initial signal, you have nothing to worry about. Your stop-loss is at 1133,20, and your price objective is 1464.80.

We began the day with what looked like a high-odds correction target at 1259.10. Instead, the futures turned sharply from 1260.50, a bullish event that became even moreso when the Auggies began pushing past some 'external' peaks on the intraday charts.  By the end of the session, they had generated a bullish impulse leg with the potential to produce a follow-through to as high as around 1275.  Much as I like the pattern, I don't quite trust it because the intraday high was below Monday's twin peaks. Under the circumstances, the only strategy for getting long that I can recommend would be via a 'counterintuitive' trigger like the one sketched. _______ UPDATE (Jun 15, 12:55 a.m. EDT):  We'll back away until the nut-jobs responsible for Wednesday's flaky price action have moved on to another game.

August Gold has pinged the 1299.10 midpoint Hidden Pivot twice (see inset) , implying that the pattern shown can be used confidently for purposes of targeting and trading this vehicle. I have no crystal ball, and there can be no guarantees that the futures will get past the pivot. But if and when they do, the 1464.80 'D' target will be in play. Moreover, it would become no worse than an even-odds bet to be reached if the first thrust to exceed it does so decisively, especially by closing above it.  Alternatively, a competing but lesser downtrending abc pattern must be respected. It implies that the Auggies could fall to 1194.40 over the next 3-4 weeks in search of a foothold. A decisive breach of that 'hidden' support would open a path to as low as 1088.40 by mid-to-late July. ________ UPDATE (Jun 13, 9:01 a.m.):  More immediately, August Gold looks like it will fall to exactly 1259.10 before it can turn around. On the 15-minute chart, you can locate the target using these coordinates: A=1277.20 on 6/9 at 8:45 a.m.; B=1265.60 on 6/12 at 9:15 a.m. Notice the precise bounce from p yesterday, and how it set up a 'mechanical' short from x=1267.80.