Gold

The ABC pattern shown, with a 1255.90 rally target, still looks like the one that is controlling price action in this vehicle at the moment. So much the better, since the failure of sellers on Friday to bring the futures down to the red line, where we might have sought to get long 'mechanically,' hints of buying power beneath the surface. Looking just ahead, you can buy a swoon to the green line 'mechanically' on Monday, but I wouldn't advise trying this at the red line. Why? At the moment, I'd prefer to do my buying in gold when bulls are getting terrorized rather than merely discomfited. Friday's swoon from above the pink line was closer to the former, and it's unfortunate that the intraday low occurred just shy of our optimal one. _______ UPDATE (Feb 13, 10:18 p.m. EST): I've changed the picture (see inset) to show a minor corrective pattern that can be bottom-fished with a bid at 1222.20 and a stop-loss as tight as 1221.80. There are no guarantees this midpoint Hidden Pivot support will contain sellers, but its location looks opportune to me for trading purposes. If the stop is hit, look for further slippage to at least d=1215.40.  Please note that the mechanical buy described above, at 1200.90, stop 1182.50 remains valid. ________ UPDATE (Feb 14, 7:08 p.m.): Today's mildly wacky price action, inspired by yellenblather, altered the pattern I'd suggested trading. I'll hazard no further predictions for Wednesday. _______ UPDATE (Feb 15, 8:45 a.m.): This morning's nasty, gratuitous takedown targets 1209.90 off this pattern on the 60-minute chart; a=1246.20; b= 1220.30. The futures will have a chance to turn up from p2=1216.40, however. If the reversal goes all the way to 1235.90 by tomorrow, that would be quite bullish.

It's late Monday night and April Gold has stolen up on the 1237.70 'external' peak (see inset) that I wrote here yesterday was crucial to the short- to intermediate-term picture.  The so-far high tonight has precisely tied the peak, but it would be hard to imagine the futures coming this far without mustering the tiny push it would take to get past it. That would refresh the bullish energy of the daily chart,  shifting our attention to election night's watershed peak at 1343.90.  First things first, though: Assuming buyers can get past the 1238.80 'secondary pivot' of the pattern shown, a two-day close above it would put the 1257.10 target solidly in play over the near term. As always, an easy move through so clear a Hidden Pivot resistance would be telegraphing a continuation of the trend. _______ UPDATE (Feb 7, 7:46 p.m. EST): Another extremely uneventful day, checked by the 1237.70 resistance drum-rolled above. The so-far shallow retracement from within three ticks of that number suggests bulls are mustering their courage for a push past it.  _______ UPDATE (Feb 8, 10:02 p.m.): Buyers easily cracked the  1237.70 resistance, implying the trend is likely to continue to at least the 1255.60 target shown. We haven't used the secondary pivot (p2) much to set up 'mechanical' buying opportunities, but let's give it a try here, stop 1231.30. If the $600 initial risk makes you squeamish, you can substitute either a 'counterintuitive' set-up using A=1232.30, or 'camouflage'. _______ UPDATE (Feb 9, 10:03 a.m.): The futures took an $8 bounce from  1237.70 before relapsing to the pink line. If you caught the initial trade with a bid placed just above the line, you had a great opportunity to take a partial profit and can manage the trade as you please from this point

After rallying sharply overnight, the futures fell $6 from within a single tick of the 1219.10 Hidden Pivot I'd flagged here earlier. A second-wind burst took them even higher, to an intraday peak at 1227.50 that easily beat my bullish 'continuation' benchmark at 1223.00. This is constructive action, and we should regard any retracement that doesn't breach January 27's 1182.60 low as a potential buying opportunity. Even so, I've selected the most conservative rally pattern available (see inset) so that we can accurately gauge the strength of the rally and trade it knowledgeably.  The A-B leg shown exceeded the 1225.50 peak, making it bullishly impulsive. This cannot be said of the bigger-picture rally leg, however, since its January 24 peak at 1223.00 missed being 'impulsive' by 60 cents. We'll see how it goes on Friday, but if the trend pushes above the 1237.70 peak without correcting, that would be reason for bulls to relax. _______ UPDATE (Feb 5, 6:15 p.m.): No change. Continue to use the small pattern shown to extrapolate day-tradable information.  In theory, the futures would need to retrace down to at least 1202.50 to be considered properly rested for another leg up. In practice, however, if buyers were to push this vehicle above the 1237.70 peak (see inset) without a full retracement, it would increase the imputed bullishness of the daily chart.

 Gold finished the day with a sharp upswing, but not before gratuitously inflicting pain on bulls with a $15 swoon early in the session. If the rally is ruled by the pattern shown as I expect it to be, the futures should hit 1219.10 overnight or early Thursday. With any luck the move will breeze past the target, giving us reason to expect more of the same over the near term. And if buyers can push just a little higher, surpassing the 1223.00 peak labeled in the chart, it would be bears for a change who are on the run. From a trading standpoint, we should stay anchored in bedrock, meaning 'counterintuitive' entries only. I passed up what turned out to have been an excellent 'mechanical' buying opportunity on Wednesday because, like you, I've grown increasingly skittish about catching the falling piano. That is not necessarily to say that gold is difficult to trade, only that we will have to focus our efforts on only the most promising set-ups. Stay closely tuned to chat room give-and-take if you want to participate.

Gold's rally continues to lack the vigor of Silver's, so I've used a relatively modest target for today at 1225.30 (see inset). The trip should be  a piece of cake, judging from the way buyers speared the 1204.00 'midpoint Hidden Pivot' resistance early in Tuesday's session. Were the April contract to blow past 1225.30 as easily, we could raise our sights to 1255.60, a target that would become an odds-on bet following a two-day close above 1219.10. Night owls can position for a 'mechanical' buy at 1204.00, stop 1196.90, if the futures pull back to the green line. Otherwise, there is still one more 'external' peak at 1220.30 (1/24) that can be used to craft a lower-risk 'camouflage' entry. _______ UPDATE (Feb 1, 9:40 a.m.): We'll respect the selling because it looks punitive. Bring the mechanical bid down to x=1193.30, stop 1182.50. We can still attempt to get aboard at p=1204.00, but I would suggest doing so only with a 'camouflage' entry.

Gold is showing none of Silver's feistiness at the moment, but it's nothing that a pop above the red line, a midpoint Hidden Pivot resistance at 1201.30, would not remedy. Were that to occur, we might expect a finishing stroke to at least 1228.80, the pattern's 'D' target. I've suggested using the minor levels shown to to set up 'mechanical' trades to take us higher. This implies waiting for a pullback to the green or red line once either has been decisively exceeded for at least several bars. The stop-loss would be equal to a third of the difference between the line where entry was made and the D target.  Please note as well that any 'mechanical' signal can be used to rationalize entry via two other tactics we employ, namely 'camouflage' or 'counterintuitive.' _______ UPDATE (Jan 30, 8:41 p.m.): Anyone on board? The futures tripped an in-your-face mechanical buy on a pullback early Monday morning to the green line. If I get any reports of fills from subscribers, I'll track the position on The Scoreboard.

We've stayed cautiously bullish lately, lest gold disappoint us for the umpteenth time.  Accordingly, I posted a modest, 1221.30 rally target in the chat room this morning that has taken fully six hours to reach. Actually, it has yet to be achieved, since the so-far high as we went to press is 1220.10. Remember, we don't want these Hidden Pivot levels merely to be reached, but to be exceeded with bold panache. Were that to occur now, we could raise our sights a skosh -- to 1226.90, a Hidden Pivot target drum-rolled here yesterday.  This is all little stuff, I realize, but if the futures were to vault the 1236.10 'external' peak from mid-November that I also mentioned, especially without much of a pullback first, the rally would start to look like the real McCoy. For now, however, let's cross our fingers as February Gold steals up on the hidden resistance at 1226.90 noted above. _______ UPDATE (Jan 24, 4:49 p.m. EST): Gold disappointed us yet again-- but in a so-far small way, by head-faking to a high marginally above Monday's and then relapsing. This generated a bearish a-b impulse leg on the intraday charts, but we won't know how potent sellers are until we've seen how the c-d leg plays out.  Traders can use A=1198.20 (1/20 at 6:00 a.m. on the 240-minute  chart) to set up a potential counterintuitive' buy for any rebound that may be coming. _______ UPDATE (Jan 25, 11:25 p.m.): This morning's failed 'counterintuitive' trigger implies more weakness ahead. We can gauge the strength of the selling by how many prior lows are exceeded without an upward correction. _______ UPDATE (Jan 26, 9:46 a.m.): Punitive selling has taken out two prior lows overnight -- one an 'internal' low at 1192.60, the other an 'external at 1187.50

February Gold did everything we asked of it on Friday, clearing the way for a push to the 1226.90 target given here earlier. As always, a move that easily exceeds the target, in this case by perhaps $2-$3, would affirm the robustness of the rally and the likelihood that it will continue. The short-term outlook would brighten even more if bulls can surpass mid-November's  1236.10 'external' peak (see inset), especially if they achieve this feat without taking a noticeable breather. The futures finished toward the middle of their range on Friday, suggesting that buyers were not exactly chomping at the bit.  My hunch is that a slow start Sunday night would be more constructive than a leap that could attract unwanted multitudes of profit-takers.

Within the next day or two we should have more evidence to tell us whether the rally begun in late December is the real deal. If bulls have any moxie, they'll push this vehicle above the 1223.50 peak (see inset) without much ado. Still better would be an unpaused thrust exceeding the second, 1236.10. Our rule for bull markets is that each completed upthrust should pierce an old high or a layer of supply. The effect is to refresh the bullish energy of the daily and intraday charts. That's the least we should expect of a rally if we are to presume it has sufficient energy to continue. Another point to consider: Although the futures have tripped a theoretical buy signal tied to a 1445.90 target that sits well above these levels, imagining gold at those heights is not what should inform our trading right now. That would amount to reckless optimism; our strategy should be skeptical and cautious. Practically speaking, it suggests we will need to wait for a mechanical buy signal on a pullback to the green line before we jump in. Even then, the $8000 per contract initial risk this would imply impels us to substitute a 'camouflage' entry strategy once the signal is given. However we might proceed, theoretical entry risk should be held to no more than $100-$150 per contract. _______ UPDATE (Jan 18, 9:47 p.m. ET): Gold significantly underperformed relative to silver today -- enough so that we should regard it as a divergence. The intraday high fell $3.60 shy of the 'external' peak at 1223.50 noted above, falling shy of a bullish impulse leg that would have confirmed silver's unambiguous lead. In fact, the minor trend in gold is bearishly impulsive, with a point 'a' high at 1215.80 that could be used to