Gold

With today's strong surge, June Gold demolished a 1279.80 Hidden Pivot resistance, putting in play the 1464.90 target of a pattern of far larger degree. The pattern seems ambitious, but it is technically justified by our rules, since it is the only pattern we've got to work with at this point. It implies that we should use the 1297.40 midpoint pivot as a minimum upside objective for the near term. As always, we'll be watching closely to see how the futures interact with that 'hidden' resistance the first time they encounter it. An easy move past it on the first try, particularly if it hits 1315 or so with no pullbacks, would make the 1464.90 target an odds-on bet as far as I'm concerned. It would also make the red line available to us either for placing a 'mechanical' bid or converting this type of entry trigger into a lower-risk camouflage entry. Stay tuned!

Friday's nasty reversal was disappointing, to say the least, especially since the rally peaked less than $3 shy of a 1275.80 Hidden Pivot target we'd been using for the last week to stay on the right side of a wishy-washy uptrend. However, if you back up to consider an even bigger picture -- one with a slightly higher target at 1279.80 -- you can see that Friday's selloff did no technical damage to a still-bullish chart. Moreover, the spike through the 1238.90 midpoint resistance on March 21 was so ferocious that there should be little doubt 1279.80 will be reached. What happens after that is more important, since an easy push past that number, especially within a day of when it is first touched, would be signaling more upside to come.  Alternatively, a reversal from the target that subsequently exceeds two prior lows on this chart would imply bulls are spent, probably for 2-3 weeks or more. _______ UPDATE (Apr 10, 7:56 p.m. ET): Today's gratuitous ups and downs left my outlook unchanged. _______ UPDATE (Apr 11, 11:34 p.m.): In after-hours trading, the June contract has exceeded the 1279.80 Hidden Pivot by $2 so far. That's not quite enough to imply bulls are ready to power significantly higher without a rest. Regardless, if they can close the futures above the pivot for two consecutive days, or trade more than 3.50 above it intraday, they will be in good position to steamroller sellers ahead of Good Friday.

News of a U.S. air strike on Syria has goosed June Gold to within easy distance of the 1275.80 Hidden Pivot we've been using as a minimum rally target for the last week. The target and the pattern that produced it are sufficiently clear that we should expect a stall precisely at 1275.80. However, if the futures get past it easily, especially if this occurs within hours of first contact, that would imply the trend is likely to continue. It would also be reason to regard any pullback from above the target as a buying opportunity. In the meantime, night owls can use p2=1267.20 (aka the secondary pivot) to set up a 'mechanical' bid, stop 1264.30. Do not attempt this trade unless you are familiar with the simple rules we use to determine whether a proper pullback to the pink line has occurred.

Gold earned the begrudging benefit of the doubt Friday, even though the intraday low exceeded a Hidden Pivot correction target, and although it also generated a bearish impulse leg on the hourly chart. When the dust settled, the futures had tripped a theoretical buy signal at the green line (1251.60), implying more upside to at least 1258.70, the midpoint pivot of the pattern. The move projects to as high as 1275.80 over the near term, but that target won't be in play until such time as buyers decisively exceed the midpoint resistance with evident ease.  Under the circumstances, I can recommend a 'mechanical' bid at the green line, but only if it is touched on Monday after the futures have hit or exceeded p=1258.70. This is shown hypothetically in the chart. ______ UPDATE (Apr 3, 9:16 p.m.): The June contract has been the obedient slave of the bullish pattern noted above, with a 1275.80 rally target. The intraday high on Monday occurred almost precisely at the 1258.70 midpoint pivot (see above) as we might have expected, but buyers will need to exceed this benchmark by at least 2.20 intraday, or close above it for two consecutive days, before 1275.80 would become an odds-on bet to be reached. A 'mechanical' bid at the green line, stop 1241.40 is warranted on Tuesday if the pullback to it meets our criteria, but I'm not yet ready to green-light a 'mechanical' entry at p=1258.70.  (Click here for a fresh chart.)  _______ UPDATE (Apr 4, 10:37 p.m.): A bull-trap opening set a selloff in motion that looks bound for at least 1252.30 (30-min, a= 1263.70 at 8:30 a.m.). If the target is easily exceeded it would generate a bearish signal for the near term. _______ UPDATE (Apr 5, 11:23 p.m.): Gold reversed a selloff on

Switching to the June contract, we see that gold on Thursday did what it has been doing so well for so long, with crushing consistency: disappointing bulls. This has been going on since July; and yet, the gold bugs remain faithful -- even worse, they seem hopeful.  The chart pattern shown (see inset) suggests they could find short-lived respite at the 1242.70 Hidden Pivot support, and even bottom-fish there with a five-tick stop-loss. But what would be the point? A somewhat less risky trade for those who only play the upside would be to initiate a 'counterintuitive' entry using the labeled low at 1243.70 as a point A. If you attempt this, however, I'd suggest shooting for a ride only to the still-undetermined midpoint pivot rather than to the 'D' target. If the trade fails, it will likely be the last opportunity gold has to turn around before testing support at 1200.00

Gold's performance this week has been underwhelming, to say the least, so today's chart, although bullish, sets a low bar. The April contract tripped a mechanical 'buy' signal today, but the initial risk of nearly $500 per contract makes it an unappealing bet, especially considering the tepid price action that had preceded the signal. Instead, I'll suggest we look to do our buying after the futures have popped above the 1256.20 midpoint resistance. That would exceed the labeled peak at 1255.90 as well, generating an encouraging impulse leg on the lesser charts.  Selling Wednesday evening has been lackluster so far, suggesting it won't take much of a push to get things rolling in the right direction.

Another bullion rally laid an egg. So what else is new?  Under the circumstances, I'm featuring a 15-minute chart with a very modest rally target at 1262.80 rather than one that appeared here last week with a 1277 objective. The pattern shown is gnarly enough to work very precisely, and it doesn't hurt that Friday's rally stalled almost precisely at the 1251.80 midpoint Hidden Pivot. That implies that a decisive move past it would reach 1257.30 at least, or 1262.80 if any higher. Judging from the way the futures sold off into Friday's close, however, it is not exactly a foregone conclusion that bulls will take a flying start when trading resumes Sunday evening. Despite this, the pullback to the green line was in theory a 'mechanical' buy, even if in practice we would have used a 'camouflage' entry to reduce the initial risk significantly. _______ UPDATE (Mar 27, 12:22 p.m. EDT): Gold is doing its version of the Acapulco cliff dive after failing to reach my "modest" target at 1262.80. What a stretch! But yes, I did promise I wouldn't diss bullion, only read the charts disinterestedly. In that regard, GCJ 17 would become a so-so-mechanical 'buy' on a pullback to p=1251.80. Odds would be better buying x=1246.20 mechanically, stop 1240.70, but even then I wouldn't look for a subsequent rally to get to the still-obtaining 1262.80 target. _______ UPDATE (March 29, 1:40 a.m.): This evening's dirge has dampened my enthusiasm for bottom-fishing at 1246.20. If you're eager to go against the trend anyway, I'd suggest trying it at 1243.50, two ticks above the minor corrective target shown (click here for chart), with a 1242.90 stop-loss.

Just a small push would put gold on track to hit the 1277.00 target shown. The April contract has stalled precisely at the 1235.90 midpoint Hidden Pivot, meaning a decisive push past it would make the 'D' target an even-odds bet to be reached. Judging from the trajectory of the rally, we might expect this to happen within the next 4-7 trading days.  Also, the target should show very precise stopping power, given the precise pullback from the pattern's midpoint pivot. If it doesn't and the futures surpass it easily on the first try, that would imply the rally is capable of getting legs. Yes, we've been down this path many times before, teased and tempted but ultimately disappointed.  That's why we should simply go by-the-numbers here, using a very compelling ABCD pattern that will give us a firm handle on trend strength. _______ UPDATE (Mar 21, 11:25 a.m. EDT): The decisive push past 1235.90 has put p2=1256.40 in play as out minimum upside target (while also making a pullback to p=1235.90 a 'mechanical' buy in theory. In practice, use the entry trigger to create a 'camouflage' one.) Be alert to a possible stall, or even a significant trend reversal, from p2=1256.40.) _______ UPDATE (Mar 23, 8:20 p.m.): Today's gratuitous feints had no effect on the benchmarks given above.

Buyers extended Wednesday's perplexing rally -- perplexing because if gold were acting normally, it would be falling on Wednesday's headline news of a 25-basis-point rate hike by the Fed. Rising returns on risk-free paper are supposed to attract money away from bullion, right?  Whatever the case, day two of gold's surge conspicuously failed to reach the midpoint Hidden Pivot at 1236.00, never mind punch through it. A decisive move past the pivot would all but guarantee a further push to the 1277.10 target, but there's no point in guessing about whether this will occur. We'll give it another day or two, but the longer it takes for the April contract to move above the red line, assuming it does, the greater the suspicion that this so-far spirited rally is not headed for greatness. It may in fact turn out to be yet one more bull tease/trap. _______ UPDATE (Mar 19, 6:00 p.m. EDT):  Gold disappointed us for the umpteenth time on Friday, going no higher than 1231.50 while oscillating all day long in a tedious, five-point range.  Granted, it looks like a consolidation when viewed on the intraday charts. Regardless, buyers will need to rip through 1236.00 to persuade me they're serious.