Gold

Gold's bearish chart (see inset) would appear to conflict with reports that Greek voters have roundly rejected austerity measures demanded by their creditors. The chart shows downside targets at 1152.60 and 1135.00, but if Greeks have in fact voted down the referendum, we might expect gold prices to be buoyant when trading resumes Sunday evening. However, considering the feebleness of the initial rally in gold a week ago, when it became clear that Greece would default, we shouldn't get our expectations too high. The hourly chart is tortuous and unclear, but I'd say any knee-jerk pop in this vehicle would hit 1173.10, just $6 above the most recent settlement. Beware of a relapse! ______ UPDATE (July 6, 10:39 p.m. EDT): The futures have bounced from 1155.80, but not by enough to change the targets given above. Keep them in mind unless buyers exceed 1188.00 today or tomorrow, since that would be short-term bullish.  _______ UPDATE (July 7, 9:20 a.m.): A plunge this morning has  brought August Gold down to a so-far low of 1153.60, just $1.00 from the target I'd furnished above.  If and when this Hidden Pivot support fails, look for more slippage to the second target, 1135.00.  Meanwhile, if you used my number to get long near the low, take a partial profit here.

Yes, I know, you only want to hear the good news where gold is concerned. It will be difficult to find on a day when Comex Gold was up a paltry $14 as fears over Greece's capitulation sent Asian, then European stocks into a nosedive. Be that as it may, the 'good' news is this:  Two uptrends, both shown in the chart, remain intact. Since the lesser of the two yields a more realistic target, I'll focus on it alone. The target is 1251.10, and its accuracy and reliability have been confirmed by the precise pullback from the midpoint pivot at 1206.60. Since the downward reversal did not exceed the pattern's point 'C' low, the target itself is still in play. Of course, the futures will have to exceed 1206.60 decisively (i.e., by at least $6 to $8) to make further upside to 1251.10 an odds-on bet.  Since a conventional entry has already been triggered at x=1184.40, the futures are theoretically a buy. But I would attempt this only via 'camouflage,' since the odds will not be in bulls' favor until 1206.60 has been impaled. Thereafter, you could buy at that number 'mechanically' on a pullback that meets our criteria. If I'm in the chat room when this occurs, please don't hesitate to ask for real-time guidance. ______ UPDATE (June 30, 10:34 p.m. EDT): And down we go. However, the futures would need to fall beneath March 20's 1143.80 low to negate the bullish potential of the impulsive rally that occurred between then and mid-May.  More immediately, the August contract ended the day on a moderate upswing with potential to 1183.30. First, though, buyers would need to push decisively past the 1176.80 midpoint resistance associated with that target.

Although weakness was the theme of yesterday's gold tout, I will suggest nonetheless that you try bottom-fishing at either of the two Hidden Pivots shown: respectively, 1168.60 (p2) or 1165.70. These supports look equally likely to produce a bounce from within three ticks of the given number. That implies you could use a stop-loss as tight as four ticks for this trade. Take a partial profit if the position goes 0.90 in-the-black, or implement a trailing stop if you are using only a single contract. _______ UPDATE (9:56 a.m. EDT): Gold's distributive, bull-trap rally overnight negated my strategy by altering the target. It is currently 1166.40, exactly 70 cents beneath the so-far intraday low. If that Hidden Pivot support gives way, look for more downside to 1163.30, or to 1158.40 if any lower.

Yesterday's dive did more damage than the daily weakness to which we long ago became accustomed. Notice that it breached two 'external' lows (labeled in the chart). This implies that even though August Gold was down by just a few dollars yesterday, the selling is more urgent than it might appear. If this reading of gold's vital signs is correct, we should see the pattern shown exceed its 'D' target. Night owls may have an opportunity to get short, but the implied $580 entry risk per contract demands that we use a 'camouflage' pattern on a chart of lesser degree to initiate the trade with theoretical risk no greater than five ticks.

All that bouncing around between the red line (p) and the brown (p2) implies the futures are bound for at least 1192.20, the target of the minor rally pattern shown. There was a 'mechanical' buying opportunity on the pullback to p=1183.00 that would have required a stop-loss at 1181.50, but if you missed it you can attempt a belated entry on a pullback to p2=1187.50 after that hidden resistance has been exceeded by at least 1.60 points. The usual rules will apply, including 'white space' beneath the intervening bars between breakout and pullback.  Since profit potential would be a theoretical 4.60, an initial, 1.50-point stop-loss would apply from the time of entry at 1187.60. _______ UPDATE (10:16 a.m. EDT): The futures blew past the 1192.20 target, putting in play the new one shown, at 1248.00. Its midpoint pivot at 1205.10 should stop the rally, at least for a while, but any decisive move past it would bring p2=1226.52 into focus.  The futures did not pull back overnight to provide the easy buy we'd hoped for at 1187.50, but there were other ways to get aboard ahead of this morning's surge. A 'camouflaged' rally pattern that played out late Wednesday night, for one. On the 15-minute chart, for instance, A=1183.50 at 9:15 tripped a midnight buy signal at 1186.50 that would have subject the buyer to little stress or strain. ________ UPDATE (June 21, 4:00 p.m.): The 1205.10 midpoint pivot flagged above has stopped buyers in their tracks, but if they can get past on Monday it would shorten the odds of more upside over the very near-term to at least 1226.52, and thence 1248.00.  _______ UPDATE (June 22, 9:12 p.m.) Yesterday's feeble selloff was technically irrelevant other than for day traders. For the record, it left the futures sitting exactly

The pattern shown is only weakly bullish, but don't let that scare you off if you're itching to trade gold from the long side. Initiate a mechanical trade in either of two ways: 1) bid 1179.90, stop 178.30, with 1184.60 as a minimum objective; or, 2) buy a pullback to p=1184.50 after this midpoint pivot has been exceeded by 1.80-2.20. Minimum objective would be 1189.20. Notice than in neither instance are we using the actual 'D' target of the pattern. That's because rallies tend to fail to reach their D targets when the dominant trend -- in this case a bear market stretching back to April 2011 -- is bearish.  (Note: Moments ago, as we went to press, the first trade triggered with a dip down to 1179.60. I'd suggest passing up option #1 and spectating just to get the hang of it, win or lose.) _______ UPDATE (3:40 p.m.): The Whoopee Cushion bounce came from an 1173.90 low on the latest Fed 'news', so there was no trade. The $14 rally has no consequences unless you are a day trader.

Gold bolted out of the gate Sunday night but couldn't hold onto the relatively modest, $6 gain. The rally can be attributed to a correspondingly weak opening for index futures, but unless the tempo of the selling picks up, we should expect bullion's performance on Monday to be lackluster. From a purely technical standpoint, the uptrend begun last Tuesday on 6/9 from 1174.30 remains viable, albeit barely so, and portends upside potential over the very near-term to the 1192.30 target shown. A relapse breaching 1174.80. however, would put a downside target at 1159.80 in play (p2), or even 1149.20. The pattern can be found on the hourly chart, where A=1204.70 on June 1. _______ UPDATE (12:13 p.m. EDT):  The futures are showing a little life at the moment, up $9.50 after having idled for most of the morning. My immediate target is 1195.20, provided the August contract can push decisively past p2=1189.40 of a pattern on the 30-minute chart that began on June 8 at 1168.50. An easy move past 1195.20 would augur more upside over the near term to as high as 1201.60.  _______  UPDATE (June 16, 8:34 a.m): The rally reversed from p2=1189.40 of the pattern associated with d=1195.20 (where a=1168.50 on 6/8). Gold fails so reliably and consistently to reach D targets that we should consider shorting p2 mechanically whenever it is hit.  There is a further problem with this bullish pattern in particular, since its point B high at 1191.80 (6/10) failed to surpass any significant peaks to the left of it.

Although yesterday's erratic weakness did not alter the bullish impulsiveness of the hourly chart, it magnified Wednesday's failure to surpass any of several external peaks recorded last week.  This is not exactly a sign of good health, but because the downtrend didn't exceed any prior lows, bulls still deserve the benefit of the doubt. The ABC pattern shown was technically a 'buy' at x=1179.20 (the green line), but I'd suggest using a mechanical bid to get aboard if and when the futures pull back after exceeding the midpoint resistance at 1183.60 by $3 to $5. If this were to occur after the start of the regular session, a higher level of caution would be warranted, since this vehicle seldom follows through on rallies during the day.

August Gold is flatlining Wednesday night following a moderate correction of a $17 rally earlier in the day. For the benefit of all subscribers, I'll repeat the advice I proffered during the weekly tutorial session yesterday: Traders looking to get long can use a conventional signal generated by the pattern shown, but I'd suggest initiating via camouflage on a chart of much smaller degree -- perhaps the two-minute bar chart.  My gut is telling me the rally will have a follow-through; however, getting off the launcher may require a fake-out point 'C' low or two (or three). That's why I'm suggesting camouflage. You should also be prepared to use a 'timed buy-stop' entry on the big pattern if its point 'x' is hit on a sudden upthrust that comes during a quiet period.