Gold

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.

Our downside target for the near-term is 1156.60, a 'midpoint' Hidden Pivot that comes from the weekly chart. April Gold had a chance to rally out of the hole this week from a bouncy-looking pivot at 1195.40. Instead, the futures popped for a few measly points before falling back to the support. This is pretty feeble price action, especially considering the rally had round-number support at 1200.00 going for it as well. Under the circumstances, we should expect the futures to continue lower, eventually turning 1200.00 into resistance. I'd return reluctantly to the bullish case, at least for the near term, if this vehicle were to leap above 1214.50 in the next day or two. That would generate a bullish impulse leg on the hourly chart -- one that presumably would be tradable. _______ UPDATE (March 15, 7:47 m. EDT): Gold's loco leap on Fed news is bound for at least 1236.00, the midpoint Hidden Pivot of a rally pattern projecting to as high as 1277.10 over the near term (click here for chart). But count me  skeptical and unenthusiastic for the time being, since the clear-as-day 1156.60 downside target identified above has placed the burden of proof squarely on bulls' slippery shoulders. For starters, they'll need to turn the 1236.00 midpoint resistance into suet to persuade me that this rally is for real.

Wednesday's pummeling generated a bearish impulse leg on the daily chart -- the first time this has occurred since mid-November. If the down-leg shown continues without interruption, exceeding yet another 'external' low at 1182.60 that I've labeled, it would deepen gold's malaise. Even so, we'll remain open-minded to the possibility of 'counterintuitive' buy signal that would come from a rally begun fro just above 1182.60. I'd be skeptical of its chances to reach the 'D' of the a-borning rally pattern, but we could still make a few bucks and enjoy a bullish ride, however fleeting. ______ UPDATE (Mar 9, 6:41 p.m.): Round-number support at 1200.00 is a mighty slender reed for bulls to lean on. Instead, I would make preparations for a fall to at least 1156.60, the midpoint Hidden Pivot support of the pattern shown (see inset, a new chart). _______ UPDATE (Mar 12, 7:42 p.m. EDT): Keep the 1156.50 downside target flagged above well in mind as a minimum downside objective for the next several weeks, but more immediately we can give bulls the benefit of the doubt, since buyers generated a weak impulse leg with Friday's moderate rally. Take encouragement if it exceeds two or more of the labeled peaks  Sunday night or Monday, since that would generate a promising impulse leg on the hourly chart.  _______ UPDATE (Mar 13, 8:48 p.m.): There was little to encourage, since today's upward blip exceeded only the lowermost of the four peaks shown in the chart before dropping back. Nevertheless, if buyers can pop this vehicle decisively above 1207.30 today, I'd make it an odds-on shot to hit 1213.60 over the near term.

There can be little doubt that the futures are about to fall to the 1208.90 target shown, and soon. It should engender a precisely tradable bounce, but I am recommending this only to subscribers who have made a few bucks on the ride south via a short position. If the target, a middling Hidden Pivot support, gives way, especially easily and the first time it is hit, that would strongly imply more slippage to 1182, where a test awaits of a key low recorded there on January 27. _______ UPDATE (Mar 8, 9:33 a.m. EST): The 1208.90 Hidden Pivot  I'd identified evinced little support as the futures fell to a so-far intraday low at 1206.80. The implications are bearish, as noted above.

Bulls were on the run once again on Monday, headed for a test of support near the point 'C' low of what had been a promising rally pattern projecting to as high as 1281.50. I have put that target in boldface green because it is still viable in theory. However, a breach of the  'C' low would portend more slippage to an even more  important low at 1182.60 recorded in late January.  We shouldn't be too optimistic that this structural support will hold if it's hit. However, it wouldn't be unusual for gold to challenge the faithful with a dip below it before rallying strongly enough to encourage the kind of false hopes we've been nurturing since 2011.

April Gold tripped a buy signal when trading got under way Sunday night as 1236.00, but upside potential was limited to perhaps $9 over the near term, and so I am not recommending the trade except to night owls who know how to execute a 'camouflage' entry. A push past the 1238.90 midpoint pivot would make the 1244.80 target an even-odds bet.  Until Friday we'd held a single-contract tracking position with a cost basis that had been reduced by profit-taking to 1174.40. The 1225.00 stop-loss triggered late in the day, terminating the position with a theoretical gain of $5060. The details of the trade, with time stamps, are on the chat room Scoreboard. For what it's worth, Porter Stansberry mailed out a letter from Steve Sjuggerud that is calling for an imminent bottom in gold.  For my part, I'll need to see more evidence on the charts. Specifically, if and when the April contract pushes above the election night high of 1343.90, I'll become more receptive to his and other bullion bulls' arguments.

Weakness we'd anticipated brought the futures down to within $1.80 of the 1229.30 target disseminated in the chat room early in Thursday's session. Some subscribers reported having gotten short for the ride, but I am currently tracking only a bigger-picture long position that has left us with a single contract and a 1225.00 stop-loss.  The cost basis for the position, reduced by two profit-taking opportunities, is 1174.40.  That means if the stop-loss is hit we'll come away with a theoretical profit of about $5060.  The details of this trade can be found by clicking The Scoreboard tab in the chat room. Night owls should check the chart (inset) for a potential bottom-fishing foray this evening.

April Gold was in a moderate sell-off in after-hours trading Tuesday night after having achieved the 1265.70 rally target show. Night owls might enjoy success bottom-fishing at the 1241.70 corrective target of a lesser pattern (15-minute, a=1259.30 at 12:30 p.m. EST), using a stop-loss as tight as four ticks. If that Hidden Pivot fails to reverse the downtrend, expect further slippage to the 1236.10 downside target of yet another pattern (20-minute, a=1264.90 on 2/27 at 11:40 a.m.; b= 1248.20 on 2/28 at 1:40 p.m.).  It looks very promising for catching a swing low precisely.  You could also get short to that number if and when 1244.50 has been penetrated to the downside by perhaps 1.20-1.50.  At a more subjective level, I should say that gold's rallies have been disappointing in the way that we might expect if bullion were still in a bear market. Gold (and silver) have rallied enough to keep bulls engaged and hopeful, but little more. It often feels like investors are being strung along by upthrusts that, while encouraging, are unable to get legs. I discussed this with Cory Fleck this morning in my daily interview with Korelin Economic Report. To access the recording, click here. _______ UPDATE (Mar 1, 10:56 p.m. EST): The futures have bounced $14 so far after bottoming $1.10 from the 1236.10 target given above. The trouble is, the bounce narrowly failed to surpass the 'external' peak I've labeled at 1252.80 (see inset, a new chart). The move is bullishly impulsive, to be sure, just not bullish enough so far for a presumption of significantly higher prices. To get things rolling, buyer will need to close this vehicle above the 1253.90 midpoint pivot, or trade through it by at least $3-$4 intraday.  Thereupon, the 1270.60 target would become my minimum upside objective