Gold

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

Although two recent upthrusts have failed to achieve our 1209.80 rally target, there's nothing to suggest we should alter our bullish bias. However, because Gold's feints higher have been so very coy lately, I'd suggest using our most mischief-resistant tactic to get aboard: the 'counterintuitive' entry. Currently, that would imply making 1200.10 (see inset) the point 'A' low of a potentially tradable pattern. One further suggestion: If point 'C' dips below 'A', use the pattern anyway.  Yes, I'm aware that, strictly speaking, it would no longer be an uptrend; however, the evidence is growing that we should consider using 'ersatz' ABC set-ups in order to stay one or two steps ahead of machine traders that are programmed to look for the obvious.  This may prove to be the best possible use of the rABC patterns that enjoyed a brief vogue in the chat room a while back. All of this will be Greek to subscribers who are unfamiliar with the nuances of the Hidden Pivot Method. However, you need only tune to the chat room for timely guidance in real time. I haven't put this trade on The Scoreboard because it could play out in several ways that are unpredictable. For now, though, I've sketched a 'counterintuitive' set-up built on rABC to help you visualize this one.  My hunch is that the trade will work best if 'C' is only slightly lower -- i.e., $1.20 or less -- than 'A'.  If so, to trade this set-up you need only be ready to pull the trigger on a buy-stop order if the futures trampoline after running stops below 'A'. _______ UPDATE (Jan 17, 10:02 a.m. EST): We were a step behind the trade, since it would have triggered 'counterintuitively' on Monday at 6 a.m. using C=1201.00 (i.e., just  0.90 above A). 

Gold's robust rally paused for just long enough on Wednesday to discourage bulls -- including your editor, who had advised a long position in GDX with a stop-loss far more generous than is typical for a Rick's Picks trade.  Unfortunately, it wasn't generous enough to weather the gratuitous swoon shown in the chart (see inset), although it did leave the 1210.50 rally target we'd been using intact. I've lowered the target slightly, to 1209.80, to conform to a 'one-off' low at 1147.20 that looks likely to produce a more accurate short-term top. The new target can also serve as a minimum upside objective for the near-term; and the more accurate pattern, to set up precise 'mechanical' trades in accordance with our simple rules.  Although the trade in GDX didn't work, a 'mechanical' buy in the futures at the green line manifestly did. We'll file the results in the backs of our trading brains, lest we feel intimidated by whatever treacheries lie ahead. In the meantime, it's hard not to regard today's fleeting plunge as other than bullish, since its effect was to plant doubts in the minds of bulls. A rally with a bunch of giddy optimists aboard is not destined for longevity, and that's why we should be heartened by the nastiness of this morning's little fooler. _______ UPDATE (Jan 12, 9:40 p.m. EST): The rally came within $2.60 of our target before relapsing   for no particular reason. Let's focus for now solely on 'counterintuitive trades to get long. Night owls can use (possible) A= 1189.50 (Jan 11, 4 p.m.) on the hourly chart for this, otherwise we'll wait for a slide down to  (possible) A=1177.00.

The rally stalled very precisely today at an 1190.80 'hidden' midpoint resistance associated with a 1210.50 target (see inset). The stall in itself does not tell us whether buyers or sellers will prevail over the next day or two, but it does imply that a decisive (i.e., $2 to $3) thrust past the resistance would become an odds-on bet to reach 1210.50. We might also expect a tradable pullback from that price, or very close to it, implying that longs could either reverse positions and get short there, or perhaps put on an option hedge.  (Note: Some subscribers were able to get long intraday, but I haven't established a tracking position because the futures didn't pull back far enough to trip the bid I'd suggested.)

Gold's rally, which took off in earnest a week ago, signaled more to come on Thursday when it pushed above two prior peaks on the daily chart (see inset). This indicates a new and healthy trend, according to the proprietary Hidden Pivot Method that we use to trade and forecast the markets. Notice that with just a little more oomph, the March contract could surpass two additional 'external' peaks on the daily chart (see inset). That would put them within a few ticks of tripping a theoretical 'buy' signal, shifting our focus, if not yet our expectations, to the 1434.80 target. Buyers would still face crucial resistance at the red line, a 'midpoint pivot' at 1279.60, but that would become the minimum upside objective once the green line has been exceeded decisively (i.e., by $2 to $3). Yes In the  meantime, subscribers should stay tuned to the chat room, since tradable ideas in this vehicle are getting a pretty good play in real time. _______ UPDATE (Jan 9, 8:58 p.m. EST): Consider using either of these two lows on the 60-minute chart as a point 'A' to fashion a 'counterintuitive' entry: 1177.40 (11 a.m. EST today); or 1173.00 (1:00 a.m.). There is scant evidence that Gold has made a significant top -- only a minor, bearish impulse leg on the 15-minute chart: a=1185.20 (3:15 p.m.); b=1180.00; c=1183.80 (click here to see the chart). Even f this evening's weakness breaches d=1178.60, I'd still be game to try the 'counterintuitive' set-up off A=1177.40.

The sluggish uptrend begun in mid-December appeared to pick up steam as 2017 got under way.  The even better news is that the intraday swings have been easily tradable and targetable. (Check out Tuesday's chat room discussion for reports from subscribers who actually made hay. If you don't already subscribe, click here for a free two-week trial period that will get you into the room immediately and allow you to view a trading 'Scoreboard' updated 24/7 with actionable ideas.)  One such trade was a 'counterintuitive' long entry, noted by an alert subscriber, at the green line (see inset).  Although the trade initially went against buyers, subscribers who applied a simple rule avoided getting stopped out and subsequently got a ride to the 1165.50 target -- precisely -- for a quick gain of as much as $1400 per contract. Although the futures retraced moderately before the regular session ended, they looked poised for another leap to as high as 1174.20. That target will remain viable as long as the recent low at 1156.70 holds. Thereupon, if the rally pushes decisively past 1165.50, a further move to 1174.20 would in my estimation become an odds-on bet. _______ UPDATE (Jan 4, 9:58 p.m. ET): Late Tuesday night, the futures were within an inch of the 1174.20 target proffered above. If they can smash through it on the first attempt, that would add to the evidence that this rally is more than just a flash-in-the-pan. _______ UPDATE (Jan 5, 9:53 a.m.): The rally easily surpassed the target, hitting 1179.90 before pulling back. Bulls are now working on an 1189.70 target that would become an odds-on bet to be reached if the futures can push decisively past a related, 'midpoint' resistance at 1180.40. Please note that, despite the encouraging overnight performance, the yellow flag is

The last of four February Comex futures contracts acquired by subscribers two days ago should have been exited early Thursday morning at 1149.90 for a total profit of about $3800. The 'dynamic' stop-loss at 1149.90 was triggered by a $1.40 drop from the high at the time, 1151.30. Based on reports in the chat room, numerous subscribers actually did the trade, which was posted, and then continuously updated, in real time here and on the chat room 'Scoreboard.'  Looking just ahead, buyers' ability on Thursday to blow past the 1155.50 target we'd used for the trade suggests there's still some pent-up energy ready to push gold even higher. The nearest Hidden Pivot resistance lies at 1164.00 (60-min, A=1124.30 on 12/15; B=1151.70 on 12/27), but if it too gets shredded, so will the key external peak at 1168.00 recorded on 12/14. That would refresh the bullish energy of the intraday charts, making it more likely that 2017 will begin with a bang for bullion. ________ BULLETIN UPDATE (8:19 p.m.): The futures just touched 1164.00. Let's see if they can get past it! _______ UPDATE (Jan 1): The futures did NOT get past the Hidden Pivot resistance. In fact, they sold off $13 after topping at 1164.30. This is no reason for gold bulls to despair, but it is certainly disappointing. The hourly chart remains slightly bullish, but it would take a print at 1168.20 -- and the sooner the better -- to make it unambiguously so.

The futures have tripped a 'conventional' buy signal this evening after retracing most of the rally that occurred in the dead of night. With a target at 1155.50, there's about $14 of immediate upside potential. Accordingly, I'll recommend using a 'mechanical' bid at 1141.30.  This implies the futures must hover above the green green line for at least three bars after exceeding it and that, furthermore, the low end of those bars must not touch the line. An 1136.50 stop-loss would be required, but you can use 'camouflage' to cut the theoretical entry risk of $480 per contract by as much as 90%. The trade seems likely to trigger in the wee hours if at all, but if this hasn't occurred by Wednesday's regular-session opening, check in the chat room for further guidance. _______ UPDATE (Dec 28, 11:22 p.m. ET): We have an active trade on in this vehicle that is showing a theoretical profit of $960 at current prices.  Sell a third contract now, with the futures trading a few ticks from p2=1150.80. The 1155.50 target can be used for exiting the remaining contract, tied to a 'dynamic trailing stop' that should shrink, always holding risk:reward at 1:3, as the target is approached.