Gold

Gold has held up pretty well since spiking two weeks ago on Brexit news. The moderate upward drift since then promises to deliver not only the 1382.80 target we've been using in recent days, but the 1418.00 target shown. Mechanical entries from p or p2 look enticing, and that's what I would suggest, provided you are familiar with the simple rules governing this type of trade. If the futures were to pull back to the green line, that could set up a 'mechanical' opportunity for an aggressive buy, albeit one using a 'camouflage' entry in order to greatly reduce the initial theoretical risk of about $2700 per contract. For what it's worth, the futures have been moving very predictably lately -- which is to say, very tradably. If you want to see just how predictably, check out this pattern on the 15-minute chart:  a=1368.00 (8:15 a.m. EDT); b= 1355.00 (9:45 a.m.); c=1358.40. I posted it in the chat room shortly before the 1351.90 midpoint pivot caught the intraday low within a single tick. I have not established a tracking position, however, because I did not explicitly advise bottom-fishing there. Nevertheless, two subscribers evidently used the pattern aggressively and reported getting long very near the intraday low. A larger version of the pattern could set up a similar entry opportunity tonight at p=1356.70 if this midpoint Hidden Pivot support is hit in the wee hours. To find the pattern on the 15-minute chart, use these coordinates: a=1368.00 (8:15 a.m. EDT); b=1352.00; and c=1364.70 (2:45 p.m.). ______ UPDATE (July 10, 5:00 p.m. EDT): Friday's wacky gyrations did not alter the guidance provided above, although they did turn my entry strategy into a non-starter. If you're still looking for a way in, I'd suggest focusing on 'camouflage' set-ups on the 15--minute chart. There

There are three powerfully impulsive ABC rally patterns of differing degree driving this move, so there should be little doubt that the futures will achieve the 1382.80 target broached here previously.  As always, we'll be looking to see whether buyers can push this vehicle above our benchmark, and how easily they do so. The 1382.80 target is as high as I am able to project for now using 2016's ups and downs to locate ABC coordinates. But as the rally extends, building on impulse legs of lesser magnitude, it would generate fresh targets above 1400.00. That implies a significant pullback along the way, but because it would presumably be corrective, we shouldn't fear it. As long as the correction comes from above some discernible 'external' peaks to the left -- the more imposing, the better -- the selloff should be regarded as a buying opportunity.  On the continuous weekly chart, there are potentially useful peaks at the following prices:  1392.60 (3/21/15);  1432.90 (8/30/13); and 1487.20 (5/3/13).

Gold futures held their own Tuesday even though the stock market's strong rebound from recent Brexit lows might have been expected to put pressure on bullion. Look for more consolidation for at least the next 3-5 days, since the recent top at 1362.60 precisely completed a rally pattern that took three weeks to play out. The next leg up should be good for a ride to the 1382.20 target of the big ABC pattern shown. At present, a pullback to the 1240.50 green line with which it is associated would be the most logical place to get long 'mechanically', using a stop at 1193.20. The size of the stop would dictate using a 'camouflage' trigger on a chart of much smaller degree, but there's also a chance that the pullback might not come down to 1240.50. 'Camouflage' would solve that problem as well, possibly using the midpoint support or 'd' target of a minor correction pattern. ______ UPDATE (June 29): A tedious day left the forecast and analysis above unchanged. _______ UPDATE (June 30, 8:24 p.m.) Rinse and repeat.  However, gold's ability to hang tough these last few days despite the upward onslaught of the stock market has been encouraging and is decidedly bullish.

Friday's monster rally hit the 1362.60 Hidden Pivot target shown to-the-exact-tick, so that could be it for bulls, at least for a while. A still larger pattern projects as high as 1450.00, and the easy move through its sibling 'midpoint resistance' at 1325.80 suggests we should take the target seriously. However, we should not allow ourselves to be teased by this prospect to the extent that it dims our technical judgment. Better to let bulls prove their case one step at a time, which in current circumstances demands a decisive move past 1362.60. We needn't wait for such an event in order to do some cautious buying on pullbacks, however, since the tendency of abcd corrections that occur within bull markets is to reverse from the midpoint of the c-d leg. This telltale habit will afford us the opportunity to bottom-fish with theoretical entry risk held to $100 or less per contract. _______ UPDATE (June 27, 11:48 p.m. EDT): The futures appear to be consolidating just above the midpoint of Thursday's ballistic thrust, but they'll be challenged to find traction if index futures remain strong tonight.  Key resistance lies not at the recent peak, but at a 1365.90 midpoint resistance just above it (60-min, A=1252.80 on 6/23). Alternatively, moderate weakness could be expected to come down to at least 1308.40 before we see an attempt to reverse.

As of around 8:20 p.m. EDT, Brexit jitters were evidently still with us. Gold futures are registering second thoughts about the outcome of today's election with a timid $10 rally that would seek to straddle the bet.  The move is not yet bullishly impulsive on the hourly chart but would become so with a print at 1275.00, just $1.30 above the so-far high of this bounce. At that point, we  might infer that gold had sniffed out a vote favoring exit, although I hesitate to tell you how to play this forward as a trade. Nevertheless, a bc-type pullback from just above peak #2 (see inset) could set up a camouflage entry opportunity. Given the circumstances, even that tactic might not be sufficient to hold the initial risk down to the nickel-and-dime level we prefer.

The corrective pattern shown, along with its 1262.60 target, has been confirmed by precise reversals at p and p2. Getting short on Tuesday for the last leg of the ride south was more trouble than it was worth, but bottom-fishing at 1262.60 with a tight stop-loss, as one chat room denizen suggested, could prove worth the wait. A 1262.80 bid, stop 1261.90, will be the easiest way to initiate the trade, but if you want to reduce risk and have a better chance of getting aboard if the futures don't come all the way down to D, a 'camouflage' entry is the best way to go. ______ UPDATE (June 22, 8:49 p.m. EDT): The slight overshoot of 1262.60 this evening implies lower prices ahead: 1255.40, or 1238.60 if any lower (240-min, a=1297.40 on 6/20 at 10:00 p.m.). There was no 'camouflage' trigger for establishing a long position, but if you used a 1262.80 bid, stop 1261.90 as I'd suggested, your loss on exiting would have been around $100 per contract. 

The usual bunch of gang-bangers, mountebanks and child molesters may have knocked gold down hard from yesterday's summit, but this failed to negate the very bullish implications of the rally that had preceded their attack. Notice that at Thursday's 1318.90 high, when August Gold was up $43 on the day, it slightly exceeded the 1308.20 high recorded back in January 2015.  I have previously referred to this peak as 'the Matterhorn', and its conquest today has rejuvenated the bullish energy of the long-term charts. The rally surpassed two prior peaks (both labeled), transforming the uptrend from early June's 1201.50 low to yesterday's high into an 'impulse leg' from which any pullback should be regarded as a buying opportunity. We'll wait for the correction to run its course before we jump aboard, but you should tune to the chat room in any case, since the turn could be signaled at any time via subtle price action on the lesser charts.  _______ UPDATE (June 19, 1:20 p.m. EDT):  Bulls recovered half of the ground they'd lost on Thursday to end the week, but they'll need to take out the 1323.40 target shown (see inset, a new chart) to imply there's sufficient buying power to keep June's steep rally going. As noted above, buyers already done the heavy lifting by exceeding early 2015's 'Matterhorn' peak. The move was bullishly impulsive, meaning that any pullback now to as low as 1201.60 is to be regarded as a buying opportunity. _______ UPDATE (June 20, 11:21 p.m. EDT): No change in my analysis.

This week's rally has been relatively gentle, but notice that it has exceeded two 'external' peaks on the daily chart (see inset).  They can both be used as hooks to set up a relatively low-risk 'camouflage' entry from these levels. Ask in the chat room if you need guidance in real time, since there are apt to be a half-dozen or more regulars in there who know how such trades work.  The rally has shortened the odds that August Gold will eventually reach a 1382.80 target that has been in play since February. Judging from the pitch of the thrust since June 7, hitting p2=1335.40 looks like a lead-pipe cinch.

Re-read my last tout for August Gold if you have yet to attempt a 'mechanical' trade, since the buying strategy I'd advised worked almost perfectly, producing a theoretical profit of $1100 per contract with relatively little stress or pain. You be the judge as to whether you could have followed my instructions. On Thursday night, I had suggested buying on a pullback to 1268.10, a secondary pivot shown in the chart. The trade tripped at 2:00 a.m., but you could have gotten aboard at or very near that price until 8:00 a.m. The 1264.60 stop-loss I'd advised proved more than adequate, since the futures went no lower than 1267.30. They finally got airborne around 8:00 a.m. with a rally that two hours later hit the 1278.50 rally target we'd been using all week to keep us on the right side of gold. So what's next? The slight overshoot of 1278.50 is mildly bullish, but we should hold our exuberance in check until such time as the rally surpasses the 1292.40 'external' peak recorded on May 16. If and when that occurs, it would put a target at 1382.80 in play, and even moreso once the 1288.00 midpoint pivot associated with that target has been decisively exceeded. The pattern can be replicated on the 240-minute chart using these coordinate: A=1074.00 (1/14/16); B=1263.60 (2/11); and C=1193.20 (2/16). _______ UPDATE (June 13, 9:42 p.m. EDT): The rally stopped at 1290.30, just shy of the 1292.40 bullish threshold noted above. All we can do now is remain patient. _______ UPDATE (June 14, 7:48 p.m.): The futures poked slightly above the 1292.40 benchmark noted above, but that should suffice to refresh the bullish energy of the hourly chart. If so, for starters we should see a pop overnight to the 1297.70 target shown. (See inset,