Gold

The decline in gold since mid-May has mimicked the Chinese water torture, a steady drip drip drip of excruciating pain. It has been noticeably lacking in power, too, since three weeks' worth of losses have eaten up only $70 of the bulls' turf. That was enough, however, to completely erase May's encouraging gains and then some.  Perhaps the pain will abate, at least for a short while, once the futures reach the 1152.10 Hidden Pivot target shown? That number's worth bottom-fishing with a stop-loss as tight as six ticks, but you'll have better odds if you use 'camouflage' to accomplish the task. If you can get short ahead of the implied 20-point fall, you can swing away when you reverse the position. _______ UPDATE (June 8, 9:13 p.m. EDT): Yesterday's tedium created a bullish impulse leg so feeble that we should probably expect lower prices on Tuesday. The 1152.10 target noted above is still valid, but more immediately, look for the futures to stair-step lower on Hidden Pivot supports, respectively, at 1165.30, 1159.50  and 1153.60. To locate those price points, use the pattern, on the hourly chart, A=1185.60 (6/4 at 5 a.m.); B=1162.10. Alternatively, bulls could buy time with a thrust today exceeding 1178.30.

I've revised the target given here yesterday, based on a discovery I made during the weekly tutorial session. Notice how the pattern shown, with a higher point 'A' than the original one, gave way to a C-D follow-through that has bounced from within a few ticks of both p and p2. This suggests that if sellers breach the latter, that the futures can be presumed headed to 1169.70, and to bounce  -- tradably -- from within a few ticks of that Hidden Pivot support. A 'mechanical' short from the red line would require an 1190.00 stop-loss, but you could whittle the entry risk down by perhaps 80% if you use the 5-minute chart to effect a 'camouflage' entry. _______ UPDATE (June 4, 8:10 p.m. EDT): No change. The 1169.70 target remains viable. Night owls may be able to leverage this number with a mechanical short from 1178.50, stop 1181.50, single contract. _______ UPDATE (June 5, 9:01 a.m.): Moments ago, gold plunged to a so-far low of 1164.20. The mechanical short stayed just an inch out of reach, however, since the overnight high was 1178.00. A camouflage short, on the other hand, would have been quite easy to initiate. My current target is 1152.10.

With stock, T-Bonds and the dollar all getting pounded in the early going yesterday, gold futures should have been up $25-$30, not $5.  This hints of weakness to come, although one might conclude from the hourly chart shown that sellers are too enfeebled to do much damage at the moment. Under the circumstances, I'll suggest bottom-fishing at 1183.10, stop 1182.70; or at 1176.10, stop 1175.70, if the opportunity should arise. The lower Hidden Pivot seems the less risky place to attempt it, although the chance of missing the trade is higher if gold turns from the first pivot .

A nasty swoon early in yesterday's session was reduced to a mere palpitation on the intraday charts by day's end (see inset). After the fall, the futures quickly returned to their soporific glide path, presumably after a large seller with urgent needs had done his business. The price action seems neither bullish nor bearish, although those who sold near the lows will probably be wary of getting knee-capped again on Friday. My bias is ever-so-mildly bullish because of this, but night owls may not find it easy to get aboard, since, early Thursday evening, even the very subtlest 'camouflage' entry opportunities were not panning out as we might wish them to. ______ UPDATE (June 1, 10:04 a.m.): Although the Whoopee Cushion rally in the early minutes of today's regular session may have been predictable as to the time of day it occurred, it was untradable nonetheless.  We've learned not to look for a follow-through, at least on the same day. Technically speaking, the rally will remain gratuitous unless it closes above 1210.90, a midpoint Hidden Pivot tied to D=1237.80 on the daily chart.  _______ UPDATE (June 1, 9:23 p.m.): Yesterday's $18 hump was even bigger, stupider and more pointless than  last Thursday's $10 swoon. Perhaps with June options out of the way, gold futures can return to business as usual? If so, we should prepare for lower prices punctuated by occasional spasms higher. Wait, isn't that what we're trying to put behind us?   What might brighten the short-term outlook? Most immediately, a pop above 1207.20, a midpoint resistance that is nicely visible on the 180-minute chart. (A=1178.90 on 5/11). That would put a 1234.10 target in play.

The 1183.40 downside target given here yesterday allowed subscribers to get long four ticks off the intraday low. Since I received reports of actual fills in the chat room, I'm establishing a tracking position: long two contracts with a cost basis of 1180.90. That's based on an initial purchase of four contracts, with half exited at 1186.00, the approximate midpoint of the 5-point rally that ensued. For now, we'll look to exit a third contract three ticks below the 1189.20 target shown, at 1188.90.  For now, make the order o-c-o with a stop-loss on the entire position at 1184.80.  If you hold just a single contract, an 'impulsive stop-loss' would imply exiting at the same price, 1184.80. At or above the pink line (p2=1188.20), you should switch to a 'dynamic' trailing stop that shrinks as 1189.20 is approached so that risk:reward is held constant at 1:3.  If the futures surge higher, exceeding 1190.40, consider sticking with the position. _______ UPDATE (9:28 a.m. EDT): A spike overnight to 1192.00 made it possible to exit a third contract at 1188.90, as suggested above.  This would have produced a gain of $800 and left a single contract with an 1180.90 cost basis.  It should have been sold at around 6 a.m. for 1186.80 when the futures went bearishly impulsive on the intraday charts. The total gain worked out to a theoretical $1400 for a position held less than a day.  FYI, the monthly composite chart says the June contract must fall to 1094.00 over the next four to six weeks before it finds good traction. P=1200.90, but so far price action has not been conducive to a mechanical short there. (A= 1346.80 on 7/31/14).

Tuesday's dump put bulls in limbo yet again. It left a clear downside target at 1183.40 undisturbed, and although that would ordinarily be mildly encouraging, in this case sellers' seeming timidity can probably be attributed to structural support around 1183.00 from earlier in May. Traders can still try bottom-fishing with 'camouflage' if and when the target is more closely approached, but if it's easily breached, that would be a sign of further weakness to come. The bigger picture suggests that the tedious, grueling chop since late March is just noise and will remain so unless a key midpoint support at 1125 is breached.

A 1247.20 rally target beckons (240-minute, A=1145/70 on 3/18), but don't expect to see significant progress toward it today. The futures held their own yesterday after a two-day, $30 slide, but it would have been more encouraging if they'd shown a little pluck rather mere buoyancy. Under the circumstances, I'll be looking for a resumption of the downtrend today based on the pattern shown. It projects to as low as 1191.90, a Hidden Pivot support that should be regarded as a worst-case low for the very near term. It looks like a promising spot to try bottom-fishing with a stop-loss as tight s four ticks, but so do p=1202.50 and p2=1197.20. In order of diminishing attractiveness, I would rank them D, p2, p. _______ UPDATE (6:53 p.m. EDT): The breach of 'hidden' support at 1202.50 has put the next such support in play: 1197.50.  Surely there are easier ways to make money than trading this minor, annoying downtrend?  ________ UPDATE (May 26, 10:54 a.m. EDT): Gold is getting pasted this morning -- and who knows why? Support (and a logical minimum downside target) lies at 1183.40 off this pattern on the 60-minute chart: A=1232.00 (5/18)' B= 1200.80 (5/21)

Yesterday's dive is cause for annoyance rather than despair. Notice how it left a robust impulse leg on the daily chart very much intact. I use the word 'robust' because the rally exceeded not only the required internal and external peaks, but a second external and yet another 'shaded' one to boot.  I've sketched in a hypothetical entry point (x), but only as a rough guide. In practice, if an 'x' is triggered, we should initiate entry on a pattern of much small degree, with commensurately smaller, initial theoretical risk of perhaps 5-6 ticks.

Bulls had to be pleased with last week's progress, which stopped just shy of testing the 1230.00 p2 resistance shown. This Hidden Pivot seems likely to be reached either Sunday night or Monday morning, but if it were to be exceeded decisively the first time it's touched -- meaning by perhaps $2 to $3 -- that would be reason to infer that the 1250.50 'D' target with which it is associated will be achieved. It would also put in play the 1317.00 target of the still-larger bullish pattern that began with last November's bear-market low at 1134.10. _______ UPDATE (May 18, 9:31 p.m. EDT): We should remain focused on the 1250.50 target shown, since it remains a logical minimum objective for the near term. I didn't make this explicit earlier, but there was a good opportunity to get long via a 'mechanical' buy on Friday. Notice how the futures pulled back to within a hair of the midpoint pivot (i.e., the red line) before taking off. Although it's debatable whether we could have caught a low that did not quite reach the pivot, the idea of it should always be held in mind if you're trading aggressively. You may get another chance if the futures pop through p2=1230.00 and then pull back.