Gold

Yesterday's psychotic jig may have caused some traders to tear their hair out and others to weep.  When the regular session began, the futures were in a steep climb toward the 1279.80 target we've been using to keep us on the right side of gold. However, they reversed direction sharply and gave up $22 of the gain in a single bar when Draghi began to speak. Whatever he said, speculators inferred that it was bad for the euro, good for the dollar, and therefore bearish for gold. The diving reaction to the eurobankster's latest twaddle was ridiculously overdone, as we might have expected, but the 1279.80 rally target still obtains. 'Camouflageurs' can use a pullback to the green line at 1239.00, stop 1225.30, to get long off a 'mechanical' signal. _______ UPDATE (April 24, 3:31 p.m.): The 1225.30 stop held, but the subsequent bounce did not exactly get us into the comfort zone. At the risk of getting whipsawed when Gold starts to trade again Sunday night, I'll recommend using an 'impulsive' stop-loss on the three-minute chart. Based on Friday's settlement, that would imply exiting the position if the futures dip below 1229.90. Otherwise, we'll continue to hold for extra bases -- meaning in this case 1279.80.  If you hold more than one contract, take a partial profit on half the position at 1240.00. ______ UPDATE (April 25, 11:15 p.m. ET): A typo for which I apologize would have caused traders to exit half of the position for a very small profit of $1.00. I'd intended an exit at 1242.00 but wrote 1240.00. Moving forward, I'll recommend an 'impulsive' stop-loss at 1237.60 for the remainder of the position.  Otherwise, cash out an additional 25% at 1245.70, my immediate target. It can be found on the 5-minute chart using the following

Wednesday's headless-chicken price action did nothing to alter my immediate outlook, which calls for a run-up to 1279.80. That is not to say, however, that we shouldn't tilt our entry strategy more toward 'camouflage', since the tiresome ups and downs have been making it tough on 'mechanical' traders, even those who are using generous stops. Paradoxically, the least risky 'mechanical' trade may be a bid at X, stop 1225.30. That's based on the speculative notion that the futures are going to reach D come hell or high water. A rally to D is not quite that certain, of course, but based on the clean lines of the pattern, it still looks like a decent bet

June Gold fell back into what may have seemed like a rut at week's end, but the important thing to notice is that the high recorded on Tuesday slightly exceeded an external peak at 1262.20 notched three weeks earlier. That means any pullback to as low as 1210.40 (see inset) will still leave a bullish impulse leg on the daily chart. Moreover, it could provide a 'counterintuitive' opportunity to get long with relatively little risk. Accordingly, I'll recommend using an ABC pattern similar to the one I've sketched hypothetically to get long.  The closer the point 'C' low is to 'A' without tying it, the more appealing the trade will be. _______ UPDATE (April 19, 8:18 a.m. ET): The futures are bound for the 1252.60 midpoint pivot of this pattern on the hourly chart: A=1210.30 (4/1); B=1261.40 (4/12). The D target, if bulls go for the gusto, is 1279.80. The in-between target, if the futures exceed 1252.60, is p2=1266.20. _______ UPDATE (April 19, 8:16 p.m. ET): The futures closed above 1252.60, raising the odds of further progress over the near term toward the 1279.80 target given above.  'Camo' traders can use either of two external peaks on the hourly chart to get long with reduced risk.  The first lies at 1258.70 (4/12 at 9:00 p.m.); the second, just above it, at 1261.30. Note: The futures are already a 'mechanical' buy on the pullback to p=1252.60, stop 1243.50, but the implied initial risk of $900 may be too rich for some of you traders, and that's why I've recommended 'camouflage' as an option.

The futures have been trending higher for the last two weeks, but the ascent has been balky and frustrating. One way to alleviate the annoyance of this is to initiate positions that are likely to get off to a good start. Based on the chart pattern shown (see inset), the best opportunity to do so may entail using a 'counterintuitive' entry.  This is a tactic I've been recommending with increasing frequency to recent graduates of the Hidden Pivot course, mainly because it is simple and relatively painless, but also because it has yielded generally excellent results. I've sketched such a trade hypothetically, but the idea behind it is to use a 'conventional' entry trigger in ABC-type patterns where there is not much vertical distance between points 'C' and 'A'. The reasons why this trade works so well are covered in my course, but the rules one uses to set it up can be gleaned from the accompanying chart as well as from timely discussions in the chat room. _______ UPDATE (April 13, 9:39 p.m. ET): Today's fright-mask sell-off, compounded by a so-far $16 decline this evening, has wiped out two of the three 'counterintuitive' opportunities we might have had to get long. However, the most appealing of them remains in the form of last Wednesday's 1217.20 low. We'll use it as a point 'A' if a serviceable buying set-up should evolve.

June Gold has pushed above a minor target at 1258.80, implying the futures are being driven by an ABC rally pattern of larger degree. If so, there are two immediate possibilities: 1) a little more upside to the 1265.70 target shown; or if it is easily brushed aside, 2) a run-up to the 1292.50 target of the bull cycle begun on February 22 from 1203.00.  We'll look for precise p and p2 confirmations of the larger pattern as the move progresses, but first let's see how bulls fare in their initial tussle with the Hidden Pivot resistance at 1265.70, which looks like a shoe-in to be reached. _______ UPDATE (April 12, 10:28 a.m. ET): Gold rallied $12 to top at 1264.70, a dollar shy of the target, before receding sharply into slightly negative territory. This is hardly a sign of bullish health, but by now we should have become used to such gratuitous shenanigans in bullion. The bull move from late 2015's lows is not over, not by a longshot, but we will need to be very patient as it musters energy for the next bullish spasm. In the meantime, a relatively shallow pullback would be encouraging.

Each of the last two rallies over the last week has been energetically impulsive, implying that bulls are likely to take another leap either Friday or Monday. The least risky way for buyers to board would be by way of the small ABC pattern that formed near the top of Thursday's flagpole. However, I expect the futures to go at least somewhat lower before they launch anew, and so I'll suggest using the larger pattern to get long. A 'counterintuitive' set-up similar to the one I've sketched would be most enticing, but be aware that an entry trigger late in the day would carry additional risk.  If the futures move higher without pulling back below 1236.00, you'll be on your own fashioning an entry trigger, but I'd suggest zooming down to at least the 3-minute chart for good 'camouflage'.

The accompanying chart shows the least ambitious bullish scenario one could concoct for Wednesday. The rally pattern was validated by the precise stall at p=1233.65 and implies that June Gold will ascend to at least 1240.20, a modest feat, if it can get past the pivot. An easy move above 1240.20 would open a further, bullish path to 1249.90. Traders can use a pullback to p=1233.65 to get long, provided it meets our simple criteria for 'mechanical' trades. Ask in the chat room if you're unsure about how these trades set up. _______ UPDATE (April 6, 10:43 p.m. ET): A beautiful 'counterintuitive' set-up (30-minute, a=1216.00 on 4/4 at 8:00 p.m.) stalled at the midpoint pivot, hinting of weakness to come. Bulls would need to surmount the new 'p' at 1228.60 to get back in gear. That would open a path to a modest rally target at 1240.00, with corresponding 'mechanical' opportunities to get long on pullbacks either to 1228.60, or to p2=1234.30.

Although Friday's dive failed to reach, much less penetrate, the 1208.25 Hidden Pivot support shown, we shouldn't get our hopes too high, since gold will remain under pressure as long as stocks are held buoyant. Accordingly, we should look for the futures to continue falling to at least 1195.40, the D target of the pattern shown, or to 1192.30 if any lower.  You can bottom-fish either Hidden Pivot with a stop-loss as tight at four ticks, but I'd suggest doing so only if you've been short for at least a part of the ride south. ______ UPDATE (April 5, 9:46 a.m. ET): Gold has rallied weakly from nowhere in particular and for no compelling reason. The June contract would need to reach 1262.30, just above a peak from March 22, to look just a little impressive.

It's always possible that yesterday's rally -- prompted, it would seem, by the latest drivel from Yellen -- will keep on going, exceeding the two labeled peaks without a pullback. That would put April Gold on course for a run-up to the 13o2.30 target shown. That is not what I expect, however; rather, I am looking for the futures to sputter out somewhat shy of the first peak, then to resume the corrective decline begun from the 1287.80 top recorded on February 11. The implied down-leg will allow us to accurately assess not only the  power of the selling, but also the likelihood that it will give way to a renewed burst higher. If so, look for the upturn to begin from within inches of the still-undetermined midpoint Hidden Pivot support of the corrective second leg.  At that point, the $1308 'Matterhorn' peak from January 2015 will come back into focus. It is still my benchmark for determining whether we are witnessing a strong bear rally, or perhaps the beginning of a much larger move. ______ UPDATE (March 30, 5:57 p.m. ET): The June contract, currently trading for around 1226.60, looks bound for a minimum 1218.10. The corrective pattern is very tradable and can be found using these coordinates on the one-minute chart: a=1237.60 (3/30, 10:46 a.m.); b=1224.90; and c=1230.80.  ________ UPDATE (April 1, 1:07 a.m.): The futures spent Thursday in a dither, stymied by a minor midpoint Hidden Pivot resistance at 1238.25. If they can push decisively past it today, look for the follow-through to hit 1253.10.