Gold

I've selected a somewhat unconventional pattern from among several possibilities, but it's the one that I expect to produce the most precise short-term top. It portends a move to 1278.50 over the near term, meaning there's nearly $14 of theoretical upside remaining to justify getting long from these levels. There were no opportunities to get long 'mechanically' on Wednesday once the futures blew past the red line, a midpoint Hidden Pivot at 1257.70; only 'camouflage' remained to us as an appealing entry tactic. That is still the case unless a swoon brings the futures down to p. A 'mechanical' bid there would take a 1250.70 stop-loss.

I'm skeptical toward Gold's leap on Friday, since it was triggered by payroll news that will not much affect the Fed's determination to tighten 'soon'. The hawkish story they've painstakingly put in play will remain the same regardless of the fact that a piece of meaningless employment news caused a knee-jerk reaction in markets most affected by the dollar's ups and downs. However, because gold's rally is bullishly impulsive on the hourly and daily charts, I'll continue to weight the technical evidence more heavily than mere logic or reason. In practice, that means turning bullish as all get-out if the August contract leaps above the 1257.35 midpoint Hidden Pivot shown, or better yet exceeds it on a closing basis on Tuesday. That would put the 1274.00 target in play, as well the prospect of a complete recovery from May's nasty selloff. ______ UPDATE (June 7, 7:52 p.m. EDT): Buyers have shown sufficient pluck since last Friday's ballistic thrust to suggest they are up to the task of delivering a strong follow-through leg. If so, it has the potential to reach 1279.00, provided the midpoint resistance at 1257.95 gives way easily. Since a theoretical 'buy' signal was tripped today at 1247.43, you'll have a green light to look for a 'camouflage' entry opportunity. Try the 15-minute chart for this, since there are a few 'external' peaks you can use to set up the trade.

Gold took an unwarranted leap Friday on meaningless news of weak job growth. Under the circumstances, we should step back and let the correction run its course rather than trading this vehicle as though it is about to blast off for outer space. To be sure, the rally was powerfully impulsive on the hourly chart, and any pullback Sunday night should be regarded as a possible buying opportunity. But I have my doubts nonetheless that the steep trajectory of the move that ended the week will continue into this one. I'll publish an update after the futures have opened Sunday night if warranted, but in any event, you should use the still-developing pattern shown for trading purposes. For a bigger picture, try this one on the daily chart: A=1074.00 (1/14/16); 1263.00 (2/11). The outlook is clouded by a lengthy consolidation that has produced 'dueling' impulse legs. The overall look of the chart is bullish, but the failed attempt to reach the 1382.00 target following a promising push past the red line (a midpoint Hidden Pivot at 1288.00), is worrisome, as is the failure -- by just three crucial ticks, basis the August contract -- to surpass January 2015's 'Matterhorn' external peak at 1308.20.

Yeah, I know:  Just because this bullion trading-vehicle is threatening to bore us all to death is no reason to take our eyes off the ball. Let's not get fancy, though. I'll suggest using the pattern shown to stay a step ahead of potentially tradable turns. The fact that the futures bounced precisely from p2 is a tentatively bullish sign insofar as they failed to reach the D target. But it would take a further move surpassing 1215.50 to the upside today to suggest that buyers have any guts. If not and the August contract relapses, expect it to fall to exactly 1205.30. You can bottom-fish there aggressively, stop 1204.90, if you've made a few bucks being short on the way down. _______ UPDATE (June 3, 9:15 a.m. EDT): Utterly meaningless, seasonally maladjusted payroll figures released this morning have caused gold to leap by $30 so far. The numbers were downbeat relative to what bozo-dom had been expecting. This evidently drove Fed-obsessed buying, since the summer tightening that had been expected has now supposedly been cast into doubt. In fact, and as we all know, the tightening story will be back in force next week, giving the stock market yet more reasons to act in a way that should cause embarrassment to all of us.

I've used three sharp coordinates on the hourly chart to project a possible short-term bottom at 1191.10, a Hidden Pivot target first broached in the chat room last week. June Gold would need to rally above 1223.00 for bulls to turn things around, but barring that, 1212.85 would trip a theoretical 'mechanical' short, stop 1220.20, for a ride down to 1191.10. A 'camouflage' modification is suggested, since the hourly chart would become bullishly impulsive with a print at 1215.00. ______ UPDATE (May 31, 8:20 p.m.): Herky-jerky spasms have generated some minor, bullish impulse legs on the hourly chart that are potentially tradable. The 1191.10 downside target remains viable nonetheless, but it can be put aside if the futures push above 1223.20. That's equal to a peak on the hourly chart recorded last Friday on the way down, and a subtle bc-type pullback from just above it could set up a 'camouflage' entry opportunity for traders looking to get aboard. _______ UPDATE (June 1, 10:15 p.m. EDT): The futures have a hacking cough, but it doesn't seem serious enough yet to be lung cancer. Wednesday's ups and downs occurred between the Hidden Pivot levels of two minor, bearish patterns, and there is therefore little point in attempting to make something of it.  Let's see what Thursday brings. 

Gold's dive on Tuesday crashed numerous minor Hidden Pivot supports on the way down, but sellers may struggle a bit harder to take out the 1222.30 target shown.  Accordingly, I'll recommend bidding 1222.50, stop 1221.90, to get long. If you want to avoid the known risks of trying to catch a falling piano, then I'd suggest using 'camouflage' to initiate. This implies looking for the upturn in the form of an abc pattern that is easily discernible on a 5-minute bar chart or less.  Lest bulls begin to despair, they should keep in mind that June Gold would need to fall a further $80, to 1146.00, before it has retraced 0.618 of the 2016 rally. ______ UPDATE (May 25, 8:53 a.m. ET): A 1222.50 bid would have been stopped out, since the low was 1220.50. 'Camouflage' on the 1-minute chart could have gotten one aboard at 1221.60 (6:08 a.m.), but it's doubtful the position, even after partial-profit-taking, would have survived the subsequent swoon to 1220.60 at 6:37 a.m. Now, if the futures take out the so-far low at 1220.50, they'll likely be going to 1215.40.  _______ UPDATE (7:11 p.m.): June Gold could always surprise us with an impulsive rally, which would require a thrust exceeding 1228.40, or 1237.60 for good measure. But the way things have been going, I'm more inclined to think the 1215.40 target given above will be reached before the futures can turn around. Don't despair quite yet, however, since the decline would need to continue for another $76, to $1146, to retrace a not unusual 61.8% of the powerful rally begun last December from $1048. _______ UPDATE (May 26, 5:34 p.m.): No change.

Bulls will have a chance to end gold's three-week losing streak at the trendline shown. With the mild weakness of the last three days, the line has likely become magnetic. It also looks more compelling as a minimum downside target than any Hidden Pivot support I could offer you at the moment. The line will come in at around 1231.70 on Tuesday, and I expect it to provide a tradable bounce. Just to be safe, however, I'd suggest using camouflage to generate a low-risk entry set-up. This implies looking for an uptrending abc pattern on the three-minute chart or less if and when the futures come down to within a point of the line.

June Gold found support last week exactly where it should have if bulls are about to turn things around. Thursday's low came within two ticks of the 1244.80 target of the corrective pattern shown, and although the bounce from that Hidden Pivot was not very impressive, it left buyers in good shape to defy gravity when trading resumes on Sunday night. They can breathe a sigh of relief if and when the rally gets past 1277.30, equal to a small peak made Wednesday on the way down. If the effort falls short, however, the relapse could send the futures groping for support in the range  1217-1230, where a thick band of consolidation took shape in April.  Most immediately, there is support from a rising trendline noted here earlier. The trendline has an upward slope of about 70 cents per day and comes in at around 1230.20 on Monday, 1230.90 on Tuesday and 1231.60 on Wednesday.

I expect one of two things to happen next, neither of them particularly bearish.  Scenario #1 calls for June Gold to fall just a bit more, to the 1251.00 Hidden Pivot support shown, then rally sharply to a new record high at 1336.30.  More likely in my estimation would be a test of the trendline, then a strong rally to the same number. If the latter scenario were to play out, with the futures touching the trendline by the middle of next week, the implied drop would be to around 1231.30, or 30 points. I may be able to sharpen the forecast a bit, depending on how minor abc-type rallies play out over the next several days.  Stay tuned to the chat room if you're interested. _______ UPDATE (9:18 a.m. EDT): The futures are getting slammed again this morning and have been down as much as $30 overnight. Having crushed the 1251.00 pivot identified above, they are now a good bet to reach the trendline, which comes in today at around 1229.40 and has an upward slope of about 75 cents per day. _______ UPDATE (8:24 p.m.): The low of today's decline was 1244.60, between the busted Hidden Pivot support and the trendline. Allowing for the trendline's gentle upward slope, it will come in today at around 1229.40, give or take a couple of ticks.