Gold

My last tout focused on a possible 'counterintuitive' buy if gold eased lower, but the potential opportunity shown looks more appealing -- and less risky. Because the a-b impulse leg meets all of our criteria for legitimacy, I am now recommending that you bottom-fish the target shown with a 1301.80 bid for two contracts, stop 1299.80. You can increase the size of your bid if you use 'camouflage' to initiate the trade. If the order fills and goes in the black, cash out half of your contracts at 1307.80 and set a stop-loss that would leave you with at least $1000 profit on the trade no matter what._______ UPDATE (Sep 19, 8:26 p.m. ET): The futures tripped a minor buy signal and then died. It will remain valid nonetheless if there's no dip first below 1315.00.  The target in play is 1324.20, with crucial resistance at 1319.60 (60-min, a=1312.60 on 9/18 at 9:00 p.m. ET; b=1321.80; and c=1315.00. _______ UPDATE (Sep 20, 6:11 p.m.): The futures held above the 1315.00 support, but only barely. The above analysis remains valid nonetheless, although odds of moving bullion quotes higher on a 'Fed day' are never going to be great.

Although gold's six-day slide may have some bulls feeling a little glum, the bigger picture is still quite bullish and suggests that the weakness has been merely corrective. This would still be true even if the futures were to fall beneath the 1305.50 point 'C' low of the pattern shown. And if the futures were to rally exactly $13.10 from some low in the range 1308-1311, that could provide a 'counterintuitive' buy signal that would be almost irresistible. Stay tuned to the chat room and be sure you have checked 'Email Notifications' on your account page, since I will be tracking this potential opportunity in real time. If the signal flashes in the manner described above, our goal will be to find a corresponding 'camouflage' entry with risk very tightly controlled.

The booster stage of today's rally from the depths of a shallow hole was sufficiently impulsive to imply bulls could enjoy a favorable breeze on Tuesday. However, entry strategies, even using camouflage patterns like the one shown, have produced only pain so far. Moreover, the immediate potential for this rally would appear to be no higher than 1340.70, the Hidden Pivot target of the larger ABC pattern shown. It's midpoint pivot lies at 1335.60, but buyers would have to clear that resistance with ease to suggest they're capable of hitting 1340.70 within the next day or two._______ UPDATE (September 13, 9:52 a.m.): The promising rally begun yesterday has laid an egg, dying just three ticks from the 1335.60 midpoint resistance noted above. The futures could conceivably become a 'counterintuitive' buy if a point 'C' low forms above yesterday's bottom (the so-far low at 1325.50 is not quite close enough). However, I would be a cautious buyer at that point rather than an enthusiastic one.

We've had little success bottom-fishing, and the tightly stopped bids I'd suggested would have produced losses of $40 theoretical per contract. Gold futures look less promising at the moment than Silver, since the peak of last week's rally in gold failed by nearly $4 to exceed any external peaks on the daily chart. Also, the recent bottom at 1305.50 overshot a Hidden Pivot correction target by more than $3. Taken together, these small signs of weakness argue for watching from the sidelines on Monday -- unless you are hot to day-trade and can do so with risk under tight control using Hidden Pivots.

The futures blew past the 1346.10 target with ease, implying that an ABC pattern of greater magnitude, with a correspondingly higher target, is driving this rally.  The one shown projects to 1430.80, about 5.6% above current levels. The futures tripped a theoretical buy signal to this number when they hit the green line today. However, the implied $3100 initial stop-loss is reason to look for other, less risky, ways to get aboard. Since only one subscriber reported using the guidance I put out last night to get long, I'll save more-detailed tactics for the chat room on Wednesday, assuming the interest is there. Self-starters can use x, p or p2 to get long 'mechanically', or to generate camouflage buy signals at any of those levels, provided the pullback to them meets our simple criteria for 'mechanical' entries. Note:  This rally looks quite promising.  Notice how it blasted through two external peaks on the daily chart in the space of a single day. If buyers knock off a couple more peaks this week, that would be even more encouraging._______ UPDATE (September 8, 9:05 p.m. EDT): Any lower and we should brace for more corrective action down to at least 1337.50; or thence to 1332.10. Either of these Hidden Pivots can be bottom-fished with a stop-loss as tight as four ticks.

We'll stick with little stuff for now (see inset), since Gold shows no inclination at the moment to fulfill big-picture patterns that remain unambiguously bullish. On the five-minute chart, the December contract tripped a theoretical buy signal on Friday that points to as high as 1346.10 over the near term. A pullback to the green line would offer a 'mechanical' buying opportunity, stop 1319.40, but I'd suggest substituting a 'camouflage' entry if the opportunity arises and you want to reduce initial risk of about $670 by as much as 90%. Odds of reaching the target would shorten if and when the red line, a midpoint Hidden Pivot resistance at 1332.80, is decisively penetrated to the upside. As always, a precise stall at the line would confirm the pattern and the target. _______ UPDATE (September 6, 8:42 a.m. EDT): The futures have rallied $14 after tripping a 'mechanical' buy signal on a pullback to the green line (1326.20) Sunday evening around 8:00. I won't establish a tracking position, however, unless I hear from at least two subscribers in the chat room who initiated the trade using either 'camouflage' or a 'mechanical' bid. At the moment, the futures have stalled precisely at the secondary pivot of the pattern, 1339.50.  If and when they get decisively past that 'hidden' resistance, the 1346.10 target flagged above will become an odds-on bet to be achieved, presumably precisely.

The failure to fully correct down to our target at 1302.70 is bullish. Accordingly, I'd suggest using the rally pattern shown to trade this vehicle today. The futures were already a 'mechanical' buy on the pullback to the green line (1317.10), but they could become so again on a retracement to p=1319.60 if you're looking to get long belatedly. A decisive push past the red line, a midpoint Hidden Pivot resistance at 1319.60, would make a follow-through to the 1324.50 target an odds-on bet. _______ UPDATE (9:16 a.m.): The usual bunch of halfwits, harlequins and headless chickens sent gold into wild spasms on alleged 'news' this morning that the U.S. supposedly had added a mere 151,000 McJobs last month. In current Wall Street semiotics, this supposedly signifies that there is less chance the Fed will tighten soon -- something that anyone not from Mars or sitting on the Fed board of governors would already know. Gold's histrionics ended with the futures moderately higher, although they got there via a route very different from the abc pattern I'd sketched. To get a handle on the rally, I suggest using these coordinates on the 15-minute chart: a=1307.40 (8:45 a.m. EDT); b=1334.00 (8:45); c=as yet unformed.

The pattern shown, with a minor downside target at 1302.70, looks like it will provide the most useful perspective for the very near term.  Neither the midpoint pivot nor the secondary (respectively, the red and green lines) showed any discernible support, and that's why I expect the selling to continue down to at least 1302.70. Also, the midpoint pivot produced a would-be profitable 'mechanical' short, as I expect the secondary pivot at 1313.20 to do now. We can worry about the seriousness of this presumptive correction, now in its third week, if and when 1302.70 is easily or decisively exceeded. Were that to occur, the futures would be likely to grope their way down to 1259.10, the June 24 Brexit launching pad, in search of good traction. _______ UPDATE (September 1, 12:01 a.m.):  No change: The analysis provided above can stand as is.

Today's chart offers a minimalist perspective, since gold shows little inclination to do anything interesting, let alone gratifying.  Assuming today is another yawner, we can gauge what buying power exists by using the pattern shown. With a modest target at 1330.00, the futures have already tripped a mechanical buy signal on the pullback to the green line. Yet another potential 'buy' signal remains at the secondary pivot (i.e. the pink line) if it is exceeded by perhaps 0.40-0.60 before the futures pull back. This is little stuff, although it's always possible that for risking just 1.20 theoretical to get long at the green line, we could be on board when the futures reach escape velocity for a shot at 1442.50. That's the ambitious D target of this pattern on the daily chart: A=1259.10 (6/24); B=1384.40 (7/6); C=1317.20.