Gold

Gold became a fetching 'mechanical' short, stop 1150.60, after breaching the 1148.20 midpoint support shown and rallying back up to it. The implied objective is p2=1141.00, but any significant breach (i.e., by $3 or more) of that Hidden Pivot would  portend further slippage to the D target of the pattern, 1133.90.  The daily and weekly charts remain bullish, as noted here yesterday, and that wouldn't change unless the selloff comes down to 1097.60, $50 below the current price.

Wednesday's sharp rally easily exceeded the 1178.80 'snooze alarm' level I'd suggested that bulls set. Although the futures have since relapsed Wednesday night and are currently trading $22 below the $1183 intraday high, this has done little damage to the hourly chart, much less to the daily and weekly, which remain quite bullish. Going forward, I'll recommend using the pattern shown to judge whether bulls are turning things around quickly. Specifically, if they can push above the red line (p=1179.85) without first dipping beneath 1152.10, that would strongly imply the good guys are resurgent. _______ UPDATE (10:23 a.m. ET): A weak rally overnight from 1152.10 failed, crashing the support with a so-far low of 1150.40 as the regular session began. This implies more slippage to at least 1148.20, the midpoint support of this pattern on the 60-minute: A=1180.70 (3:00 p.m.); B=1152.10; C=1162.50 (3:00 a.m.).  p2= 1141.00 here, and D= 1133.90, my worst-case target for the near term.

Although the futures were nominally a 'mechanical' short from x=1164.40, we've learned to back away from or scratch the trade when they are as reluctant to follow-through with a drop to p2, as is occurring here (see inset).  Although this is not quite sufficient to cause us to wax bullish -- that would take a pop above c=1169.60 -- we at least have reason to take encouragement. However, if sellers succeed in pushing down to p=1159.20 overnight, you could bottom-fish there with a bid a tick or two above the pivot and an 1158.90 stop-loss. ______ UPDATE (10:07 a.m. ET): With a Whoopee Cushion bounce from 1160.50, the futures narrowly avoided our bid this morning. We'll back away for now, since gratuitous spasms in both directions have been too wacky for all but the very nimblest traders. _______ UPDATE (9:13 p.m.): Set your snooze alarm for 1178.80, since that's where this trading vehicle's trance-inducing dirge, now entering its tenth day, would start to look interesting.

We'll give the December contract a little more leeway to the downside, lest we get fooled into turning negative prematurely. The pattern shown is of greater degree than the one we used earlier that had allowed room down to 1162.50 before generating a bearish impulse leg.  This one has a prospective point A low at 1151.30, and a pullback to within a point or two of it could set up the kind of low-risk buying opportunity that we look for. If the futures should instead hit 1173.30 on a rally without going any lower, that would turn our short-term trading bias bullish. ______ IMPORTANT UPDATE (Saturday, 3:35 p.m.): In the chat room just now, I have raised the yellow flag. Specifically, check out my 13:06 post concerning a danger signal flashed by a chartist colleague of mine whose technical work I greatly respect.  Not a subscriber? Click here for a free two-week trial subscription. It will give you instant access not only to all of Rick's daily trading 'touts' and intraday updates for stocks, options and index futures, but to a 24/7 chat room that draws veteran traders from around the world..

The rally continues to show signs of good health, with each new thrust exceeding a previous peak. When this occurs, the rally is telling us that it wants to go higher. So that you can better judge how much higher, today's chart shows the next six 'external' peaks to be summited. An easy and decisive move past one would be assurance the next is likely to be reached.  For trading purposes, a peak need only be exceeded by a single tick to make the rally 'impulsive'.  In fact, it is when the breach is by only a tick or two that the best trading opportunities tend to arise, since the impulsive strength of the rally is better disguised.  That can create 'camouflage' entry opportunities for us that help minimize the risk of getting aboard. We need only zoom down to charts of lesser degree when this occurs, with the goal of finding bullish ABC patterns of minor degree within larger patterns that have provided a go-ahead signal. For current purposes, I would suggest the following steps: 1) use the daily chart shown for big-picture signals; 2) zoom down to the hourly to find correspondingly bullish impulse legs; 3) use the five-minute chart or less to identify an even smaller entry pattern. Ahead of gold's opening Sunday evening, the relevant point 'A' low on the hourly chart was 1162.50, last Wednesday's low. A pullback creating a point 'C' low near it would be especially enticing for a 'counterintuitive trade' of the kind I have been emphasizing during the weekly tutorial sessions. _______ UPDATE (7:36 p.m. ET): No change. The futures have come down to 1168.60 so far, leaving the bullish ABC pattern noted above not only intact, but potentially tradable.

The violent, gratuitous swoons of the last two days have temporarily dulled my enthusiasm for offering trade set-ups overnight, since it's become all too obvious lately that it's possible to get clobbered in this vehicle even if one gets the trend and target exactly right. Subscribers who have reported positions in the chat room this week appear to have done much better in practice, in part because recent predictions for gold featured a near-perfect low and two 'camouflage' entries that worked as advertised. But the latter required close attention, since the futures did a kamikaze dive at a time when many traders would have been patting themselves on the back and counting unhatched chickens. Looking just ahead, the pattern shown points as high as 1203.10 over the very near term. Although this implies potential 'mechanical' buying opportunities on pullbacks to x (which in fact has already occurred), p or p2, I'll leave it to subscribers to determine whether the necessary conditions for getting long still obtain as the night wears on. This would imply, for starters, that the 1173.90 low holds.

December Gold achieved a rally target on Wednesday that had been more than a month in coming, generating a new bullish impulse leg on the daily chart in the process.  The 1189.90 intraday high slightly exceeded the 1188.30 target shown, although the chart leaves room for an alternative peak as high as 1193.80. Regardless, the move has already surpassed an 'external' high at 1189.00 recorded back in June, refreshing the bullish energy of the daily chart.  Now, if the futures were to continue slightly higher, exceeding the 1207.30 peak without correcting along the way, that would be the most bullish thing to occur on this chart since January. Night owls who want to get aboard belatedly should consider using this pattern on the 10-minute chart: A=1172.50 (10:10 a.m. on 10/14); B=1189.90; and C=?  A point 'C' low has yet to be created, but I'd suggest passing up the first before you buy-stop your way in at the 'x' trigger price. _______ UPDATE (2:33 a.m.): The trade triggered at 1185.90 (C=1181.50) at 1:40 a.m.  The target of the pattern is 1198.90, with midpoint resistance (p) at 1190.20, and secondary resistance (p2) at 1194.60. _______ UPDATE 12:56 p.m. ET): The trade worked, allowing a profitable exit at p=1190.20 before the futures swooned to 1173.90. The gain per contract could have been as much as $800. We'll steer clear of this vehicle for the time being, since the big, gratuitous intraday swings seen over the last two days have verged on psychotic. _______ UPDATE (1:24 p.m.): Gold's psychotic swoon has stalled at the 1189.10 midpoint pivot of this pattern on the five-minute chart: A=1162.50 (yesterday at 8:20 a.m.); B= 1191.70 (today at 8:20 a.m.). That means D=1203.75 and p2=1196.40, both with tradable implications.

In off-hours trading early Tuesday evening, December Gold was fixing to accomplish what it had been unable to do the entire day -- i.e., push above Monday's 1168.60 peak.  This would put the futures on track to achieve a rally target in the mid-1180s first flagged here a month ago. The exact number, which has migrated slightly over time, is 1187.70.  Night owls may have an excellent opportunity to get long with relatively little risk, since the futures as of around 6:48 p.m. had yet to poke impulsively above Monday's 1168.60 peak. A pullback from just above it could set up the best 'camouflage' entry opportunity we've seen in this vehicle in days. (See chart for a hypothetical picture of this.)  Another would have come at yesterday's lows, which the tout sent out Monday night had predicted within less than a point.  Since no one in the chat room mentioned having caught the $16 rally from the low, I did not establish a tracking position. _______ UPDATE (9:44 a.m. ET): Entry for night owls using the tactic I'd illustrated came at 1167.20 around 9:50 p.m. (5-minute chart, A= 1164.90 at 3:20 p.m. on Tuesday). The stock hit 1176.90 seven hours later, for a gain of as much as $1200 per contract, but in practice you'd have been out of at least half of the position at 1170.10, the 'D' target of the small entry pattern. Results thereafter could have varied greatly, since, in the dead of night, the futures swooned violently to 1162.50 before trampolining to a so-far high this morning of 1178.70. The 1187.70 target remains viable.

Gold futures were getting whacked early Tuesday morning, but the move so far looks innocuous when viewed in the context of the large, bullish pattern shown. Its 1187.70 target is slightly higher than the one given here previously due to the slightly higher point 'A'. Notice that the peak of Monday's rally exceeded the secondary resistance p2) at 1165.30. The overshoot was by $3.30 -- probably sufficient for us to infer that this weakness is merely corrective. For bottom-fishers, a 'mechanical' bid at p=1142.90 would take an 1135.40 stop-loss, but I'd suggest cutting it down to size by using 'camouflage'. Night owls should look for a possibly tradable reversal at either 1152.00 or 1150.40. These Hidden Pivot supports can be located on the 5-minute chart, where a=1158.40 at 10:05 p.m. ET on 10/12. _______ UPDATE (12:39 p.m. ET):  The futures have rallied $16 so far this morning off an 1151.30 low that fell in the middle of the tight bottoming range I'd provided.  If you were able to get long near the bottom, please let me know in the chat room and I'll establish a tracking position for your further guidance.