Gold

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.

Gold has been adrift for six weeks, a time period that corresponds almost exactly to the stock market's bear rally from mid-February's lows. I view the rally as doomed, implying that we will see gold resume its upward course when stocks yield to gravity, as they eventually must. The precise timing of this is unknowable, but with the broad averages hovering within a few percentage points of presumably unattainable new-record highs, we may not have long to wait. More immediately, the April contract will have an opportunity to hold the line with some pushback from a Hidden Pivot support at 1210.10 that contained sellers on Thursday. The bounce so far has not been very robust and would need to go a further $20, exceeding 1237.00, to give bulls some breathing room. This looked like a dubious bet as the week ended, however, since stock-market bears had trapped themselves in a vicious short-squeeze just ahead of the three-day weekend. Assuming bullion eases lower, look for a test of the 1191.50 bottom whence the April contract embarked on a modest three-week rally of about $100. The gains have all but vanished in the last two weeks, but the larger, bullish picture going back to late December's lows remains very much intact. _______ UPDATE (March 28, 6:41 p.m. ET): The bounce off Monday's 1206.00 low has been technically gratuitous, at least so far, since it has exceeded no prior peaks on the hourly chart. That would be remedied with just a small pop to 1225.20, an event that would generate a minor, bullish impulse leg and perhaps reason to get long on whatever pullback might ensue.

Gold is likely to remain under pressure as long as the stock market stays buoyant. Even so, the April contract is on a mechanical buy signal right now that used a 1252.00 bid to get long and a 1241.10 stop-loss. I haven't established a tracking position, however, because there was only one mention of the trade in the chat room -- by a subscriber who did not make it clear whether he'd opened a position. Regardless of how the trade plays out, we should look for a possible second entry opportunity if the futures come down to within a point or two of the 1228.30 point 'A' low shown. That could set up an appealing 'counterintuitive' trade, since trader worries at that point would center on whether the futures were about to break down. _____ UPDATE (March 23, 10:42 a.m.): Gold is getting schmeissed today, down as much as $33, negating the trade I'd proposed. Hidden Pivots aside, the April contract looks bound for a test of the 1191.50 low logged on February 16.

The chart shown provides a more expansive view than the one given here Friday, with a 1384.10 rally target that is commensurately higher.  Getting there would represent the culmination of a bullish ABCD pattern that has unfolded at a glacial pace. However, any doubts we might have had about the pattern's viability were scotched on March 10 when a sharp rally stalled precisely at the midpoint pivot, 1287.80.  As of now, we have no way of knowing for certain whether the April contract will get past that 'hidden' resistance. However, if and when it does, especially if by way of a two-day close above it, or by exceeding it by $5-6 intraday, that would imply a likely follow-through to at least 1335.95, or possibly to 1384.10 if any higher. From a trading perspective, the futures became a theoretical 'mechanical' buy, stop 1191.40, on two separate occasions when they pulled back to the green line (x=1239.65). They are on a buy signal now, but because they're trading above the 'mechanical' entry price, I'd suggest using another tactic to get aboard. If a 'camouflage' entry is your preference, please note that the futures would trip a buy signal on the chart shown at 1259.63 -- four ticks above Friday's recovery high. The relevant coordinates are: A=1227.00 on 3/16; B=1271.90 on 3/17; and (tentative) C=1248.40 (3/19). The D target would lie at 1293.30.  ________ UPDATE (March 21, 8:45 p.m.): Assuming Monday's 1241.20 low remains intact, the futures would trip a theoretical 'buy' signal at 1252.08, stop 1241.10, that could be good for a ride to at least 1262.95, or possibly 1284.70 if any higher.  On the 30-minute chart, here are the coordinates: A= 1228.30 (3/16); B=1271.90 (3/17).  A 'mechanical' entry from x=1252.08, p=1262.95 or p2=1273.83 may be possible, but getting aboard is certain

April Gold appears to be consolidating Wednesday's sharp rally, which was caused by the Fed's apparent misgivings concerning any future rate hikes.  The bullish pattern, along with its 1301.80 target, remain viable nonetheless, although the best place for a 'mechanical' bid has come down to p=1244.95, stop 1225.90. The implied $1900 of theoretical entry risk can be reduced by as much as 95%, however, by employing a 'camouflage' entry technique if and when 1244.95 is hit (shown as a green line; see inset). This would entail generating an entry signal with an ABC-type pattern on a chart of much lesser degree (i.e., the one-  or three-minute bars). If you are not familiar with this type of trade, tune to the chat room for guidance in real time.

This is the same, promising rally pattern that I've featured in a GLD tout elsewhere on this page. It implies short-term upside potential to as high as 1301.80, a Hidden Pivot target that would become an odds-on bet if p=1263.90 is exceeded by perhaps 10 points.  A pullback to p thereafter -- one that takes at least a few bars -- could set up a 'mechanical' buy there, stop 1257.60.

In The Morning Line (see above), I characterized as imbeciles and knaves those who chased stocks higher Wednesday on the latest non-news from the Fed. However, we shouldn't overlook the fact that these same dolts and broad-tossers threw enough money at gold in the space of an hour to cause its price to spike wildly. Should we be worried?  Not if my respective forecasts for stocks and bullion are correct. I remain cautiously bullish on the latter while looking for a potentially important top in the broad averages as early as today.  From a technical standpoint, I'd suggest using the pattern shown to trade this ETF, either with stock or options. It has been confirmed by the pause almost exactly at p=120.60, and a decisive move past it would portend more upside to at least 122.22, or possible even 123.85. As always, an easy move past any Hidden Pivot implies the trend will continue. Meanwhile, p, x and D can each be used in the usual ways to get long or short, or to exit a trade.

Judging from the emails I received today and the discussion in the chat room, April Gold's slide from 1288 to 1230 over the last two sessions has brought bears and doubters out in force. Technically speaking, however, even if the selloff were continue all the way down to $1145, a further $80 below Monday's settlement price, that would still represent just a 'normal' 0.618 retracement of the explosive rally launched from early January's lows. Would that be healthy? It would depend on whether bulls can get traction there.  But the technical damage would be negligible on the weekly chart, if not the daily. Under the circumstances, the uptrend continues to deserve the benefit of the doubt. Looking at a bigger picture, I've billboarded $1308 as an important threshold at which we might reasonably infer that the bear market begun in September 2011 is over. That number marks an important 'external' peak recorded on January 2015.  As such, the jury is still out, since the rally has gone no higher than 1287.80 so far. Meanwhile, my hunch is that gold will remain under pressure as long as stocks are held buoyant. If that proves to be the case, gold and silver bulls may not have long to wait, since targeted Hidden Pivot resistance lies not far above in the Dow and S&Ps. Most immediately, night owls can try bottom-fishing at 1222.30 with a stop-loss as tight as four ticks.  If it's hit, the next place we might look for a tradable bounce is from 1217.10, a Hidden Pivot target on the 20-min chart derived that follows from a=1250.70 (1/14 at 10:40 a.m. ET). _______ UPDATE (March 16, 3:34 p.m. ET): Gold has popped one helluva wheelie today, based on the latest, meaningless drivel from the Fed.  Although we found a way

Overexuberant bulls got badly trapped on the spike to 1287.80 Thursday evening, setting the stage for Friday's nasty $37 plunge. Although the pullback to the green line has ostensibly made the April contract a 'mechanical' buy at 1251.30, stop 1237.40, for a shot at a still-viable D target at 1292.90, we'll put caution ahead of opportunity for the time being. I may revise this, depending on how the futures open Sunday night. But if the broad stock averages continue higher, as I expect, bullion bears -- joined most recently by the commercials -- are apt to use the occasion to inflict more pain on bulls. The bigger picture, for your information, still looks very promising, although it will still take a push above January 2015's 'Matterhorn' peak at 1308.00 to drive a stake through the heart of the bad guys.