We've been using an ambitious rally target at 2771.70 (newly corrected) for months, but the wait has begun to impact the odds it will be reached any time soon. The midpoint Hidden Pivot at 2549.30 has become a barrier to October Gold's upward progress, and there can be no guarantees the target will be achieved until such time as buyers push decisively past that number. So far, they have failed to breach it, having spent the last month screwing the pooch just below it. A pullback to the green line (x=2438) may be needed to give the futures a rest and a running start. That would generate a 'mechanical' buy signal in theory, although it would not be strong because the pattern's C-D leg has dragged on for long enough to squander the bullish energy created by the A-B impulse leg. For now, though, the longer the futures hover just beneath p, the greater the chance they will relapse 50-100 points to regroup for another try. ______ UPDATE (Sep 12, 11:30 a.m.): No pullback or running start was necessary, since the futures have turned the 2549 midpoint Hidden Pivot into chop suey this morning. The move looks sufficiently powerful to all but guarantee a run-up to at least p2=2680.50 over the near term, and thence to the 2771.70 target flagged above.
Gold's ascent toward the 2760.70 target shown has paused in a logical place, at the p=2543.90 Hidden Pivot midpoint of the pattern. Although the strong push the futures got last February when they left the launching pad is reason to expect the target to be reached, we'll be better able to assess the odds once we've seen how buyers handle resistance at p. A stab through it would all but guarantee more upside to at least p2=2652.3, the secondary pivot. In the meantime, we should alert to the possibility of a correction to the green line, x=2435.40, since that would create an excellent 'mechanical' buying opportunity.
You don't need to be a chartist to see how bulls masticated major trendline resistance last week, setting up October Gold for a push to at least 2589.60 over the near term. If that Hidden Pivot doesn't stop the rally, 2597.80 will be the next stop, and thence 2752.20. The provenance of those last two numbers can be seen in this chart. In the meantime, any one-level pullback on the second chart would signal a 'mechanical' buy for a presumptive ride to D=2597.80. Intraday buying opportunities abound on the lesser charts.
Gold took off Friday following a shallower correction than we'd become used to. It's tempting to say that the scum balls who manipulate bullion prices for a living lost control, but more likely is that they are simply ready to let 'er rip. In any case, the October contract finished precisely at the authoritative trendline shown, and unless DaBoyz believe they can accumulate yet more tonnage with another takedown, this week should see the breakout that will finally take gold to $3000.
Last week's strong start laid an egg as expected, leaving yet more paint to dry on an indisputably bullish picture. The constipated price action cries out for a swoon beneath the three lows near 2330 that have occurred since April just to clear the air. We'd be 'voodoo' buyers down near 2351 in any case, but let's not kid ourselves into thinking the futures would do us such a kindness. In the meantime, they remain tradable on intraday signals that have been plentiful, even in bullion's increasingly tedious holding pattern. Stay tuned to the chat room if you care.
The futures rallied nearly $40 last week from within a dime of the target provided here a few days earlier. This has not made me especially bullish, however, even if I am open to the possibility the rally will achieve new highs without requiring five to eight weeks to recharge, as has been the case since April. That scenario would become more like if the October contract lunatics above the external peak at 2456.70 recordeed last Wednesday on the way down. Until such time as that occurs, be alert to the possibility of a punitive relapse.
Three successive, marginally higher tops in the last three months have made this vehicle more than a little tiresome. The futures will need to come down to at least p=2352.00 of this latest, bullish pattern before we can get a confident read on how long the tedium might last before gold blasts off toward 3000. We might be able to determine trend strength accurately as early as Monday or Tuesday by looking at patterns going in either direction on the lesser charts, so stay tuned.
Although GDXJ broke out last week, the chart shown in the inset, for August Comex futures, leaves me skeptical. I would remain at least somewhat so even if the rally were to surpass the 2477.0 peak recorded on May 24. However, I wouldn't hesitate to buy a pullback to the red line (p=2340.60) mechanically. The by-the-book stop-loss would be at 2295.10, so we'd need to craft a less risky set-up to leverage the opportunity. For the moment, though, this vehicle remains on a 'mechanical'-short signal.
Just a little higher would trigger a 'mechanical' short on the weekly chart, but the pattern is not of the highest quality, and my gut is saying not to resist the rally. A better opportunity may lie in bottom-fishing the next correction, which could be as much as $78 or as little as $39. We'll let bulls deal with resistance from July 7's top-let at 2406.70 first, but stay tuned to the chat room and your email notifications if you trade this vehicle and want to stay attuned in real time. Please note that a worst-case relapse could bring the August futures down to as low as 2204.20 without diminishing the bullish look of the long-term charts. This is unlikely in my view, but it never hurts to be prepared for whatever pain bullion is capable of dishing out.
Last week's thumb-wrestling match ended in a draw as bears failed to push the Auggies down to the 2281.00 target shown. The best they could muster was to diddle the secondary Hidden Pivot support at 2306.40 for nearly two days. The week ended with the futures mildly on the upswing, although a further push to the green line (x=2357.20) would trigger a 'mechanical' short. The opportunity looks second-rate, so I'll recommend watching from the sidelines. A bigger picture shows a nearly three-month consolidation with potential to 2520 or higher. Somewhat lower prices remain likely for now, though.
