Gold

June Gold has been pounding every Hidden Pivot support it has encountered over the last three weeks into submission. Now the futures appear to be replicating the feat in relation to the 1188.50 pivot shown, a bearish target flagged here earlier.  The breakdown already appears sufficient to put the 1168.00 target in play, but we shouldn't trust it entirely because the pattern itself is such a mongrel, with a point 'B' low that surpassed...nothing. Bottom line: The target should be considered good enough for government work, so trade away if the Civil Service has qualified you for the job.

Gold, now well into year four of a bear market, continued its familiar pattern on Monday: one step up, two steps back. My long-term correction target remains $810, although I'll always keep an open mind about trading from the long side, or even initiating a long-term bet, whenever gold is merely creating bullish impulse legs on the hourly chart. For perspective, however, it would take a run-up to 1347, nearly 13% above these levels, to turn the weekly chart unambiguously bullish. More immediately, the June contract has come down to within inches of an 1188.50 midpoint support associated with a D target at 1168.00. If gold's behavior in the days ahead is typical, however, bears will struggle to push it lower almost as hard as bulls struggle to keep it buoyant. Then, when it appears they've succeeded and are pushing for extra yards, the futures will turn higher, encouraging false hopes as they rise toward yet another middling rally target that will remain just out of reach. _______ UPDATE (April 21, 7:41 p.m. EDT): A moderate rally Tuesday morning pushed the futures to a minor target identified in the chat room in real time.  The peak fell just shy of impulsiveness, but if this vehicle exceeds 1204.30 tonight by perhaps 0.10-0.40, then pulls back in b-c fashion, it could offer an entry opportunity for alert night owls.  Check out the 15-minute chart to see the significance of 1204.30, an 'external' peak recorded Monday on the way down. _______ UPDATE (9:48 a.m.) 42 months into a bear market, gold rarely fails to disappoint. Overnight it exceeded the external peak noted above by a single tick. Then, instead of pulling back to 'actualize' this ostensibly bullish feat with a follow-through leg, it fell and kept going. There was one more failed rally

Gold didn't show much pluck on Friday, considering  how badly stocks were getting trashed. Still, the few pokes that buyers took at a 1204.60 midpoint resistance (see inset) hinted at its permeability, and therefore the possibility of more upside to the 1214.80 target of the bullish pattern shown. Although that would be no great shakes in itself, it would put bulls back on the offensive by pushing past supply represented by some 'external' peaks recorded over the last week or so. Traders looking to get aboard should consider a mechanical entry at 1204.50, stop 1201.10, on a pullback from within the range 1207.20-1209.00. ______ UPDATE (10:46 a.m): Traders who took the trade got massacred when a rally that topped at 1209.00 (3 a.m.) plunged overnight to a so far low of 1191.20. The loss on a mechanical entry would have been a theoretical $340/contract.  Henceforth, we will avoid bullish mechanical trades in this vehicle, since gold is in a bear market that seldom reaches the D targets of corrective rallies.

The midpoint pivot at 1194.70 looks suitable for bottom-fishing with a stop-loss as tight as 3-4 ticks, although it seems likely to be hit overnight if at all. The futures should turn from that price if the dominant uptrend is about to revive. Odds of this would diminish somewhat, however, if the pivot is decisively exceeded.  That would put an 1187.75 target in play -- another spot where tightly-stopped bottom-fishing would be warranted.

Gold has a scary habit of pulling out of its all-too-frequent kamikaze dives just before splattering on the deck, technically speaking. If, for one, yesterday's selloff had exceeded 1187.20 to the downside, we might have expected it to continue to at least 1175.60. Instead, bulls showed up in a nick of time, turning the futures higher from 1188.30. The result was an impulsive rally on the hourly chart that has kept alive the large, bullish pattern shown. It projects to as high as 1227.50 over the near term, with only a single significant impediment between here and there: a midpoint resistance at 1205.50. To get long ahead of the move, I would suggest buying a pullback to 1205.50 after that Hidden Pivot has been exceeded decisively -- i.e., by about $4-$5 (see inset). An 1198.20 stop-loss would apply. That is a 'mechanical' entry, and it may be best suited to those who awaken Thursday morning to see that a rally and correction have already occurred. But one could conceivably get aboard earlier, and lower, by using the 'camouflage' technique from current levels. As of around 5:00 p.m. EDT, the best place to look for set-ups was on the 15-minute chart. ______ UPDATE (11:59 a.m. EDT): Gold went nowhere overnight, then lurched lower as the regular session got under way. Its pathetic, feeble feints in the wee hours never achieved the minimum $4 of loft above p that I'd stipulated, so officially nothing was done.

Yesterday's gratuitous swoon should have killed any eagerness we might have had to buy this vehicle. I went a step further in the chat room, recommending a short to scalpers that could have been covered for a small profit by day's end. Now the futures appear headed down to the 1175.60 target shown. The most likely place for a tradable bounce to occur, or possibly even a trend reversal, is the 1187.20 midpoint support shown. _______ UPDATE (11:09 a.m.): The futures bounced $8 after having gone no lower than 1188.30 overnight. The move is of no consequence, technically speaking, and the 1175.60 target will remain viable until such time as 1198.60 is exceeded.

Two robust, ABC uptrends of different degree are driving this rally, auguring a successful voyage to the 1238.90 target we've been using to stay abreast of the move.  It has been relatively easy to trade, since the swing highs and lows have come more or less where expected, at Hidden Pivot supports and resistances. Night owls who are looking to jump aboard or augment a bullish position should use charts of 5-minute degree or less to fashion a BC-type pullback from just above the 'external' peak at 1212.50 recorded on April 8. A second opportunity could develop if the futures pop through the midpoint resistance at 1214.50, then pull back to it after having achieved an interim high in the range 1216-1220.  A mechanical buy at the red line would take a 1207.00 stop-loss. ________ UPDATE (11:47 p.m. EDT): Yesterday's downward dirge left the technical picture theoretically unchanged, but the failure to achieve an easy target at p=1214.40 is hardly reason for optimism.  Regardless, it would take a decline touching 1180.40 to seriously damage the moderate bullishness of the chart shown.

Since the Fed 'announcement' was a fraud, we have to assume that Gold's selloff in reaction to it was also a fraud. If my logic is correct, the 1238.90 rally target we've been using is intact (even if a mechanical 'buy' at the 1208.60 midpoint pivot would have gotten crushed. See chart accompanying Wednesday's tout.) Let me now introduce a lesser ABC pattern, also bullish, that is speculative because it lacks a point 'C'. You can fill in the blanks when the low is in, but the important thing to keep in mind is that any push past the midpoint pivot would put the 'D' target with which it's associated in play. Traders looking to get long should note that even on the 60-minute chart, there are several tiny 'external' peaks that would lend themselves to a camouflage entry. ______UPDATE (6:32 p.m.): The futures eked out yet another low, but as long as they hold above A=1180.50, the analysis above can stand.  _______ UPDATE (April 10, 10:20 a.m. EDT): Gold has surged higher this morning after having bottomed at 1192.40 on Thursday. Using this as a point 'C' low for the pattern shown yields a midpoint p resistance at 1214.40. It can serve for now as a minimum upside objective for the near term.  Its D sibling lies at 1236.40, close enough to the original target at 1238.90 to suggest the two together will magnetically draw gold higher.

Gold struggled to move in either direction yesterday but left unchanged a bullish picture that projects to 1238.90. The June contact can be bought 'mechanically' at 1208.50, stop 1198.50, but the implied $1000 entry risk can be reduced to a theoretical $40 or so by using the 'camouflage' technique. On the 3-minute chart, a possible opportunity was setting up that could suit our needs. The point 'C' low of the pattern is as yet unformed, but a BC-type pullback from the so-far high at 1211.20 could be the ticket, since the tiny AB rally is genuinely impulsive. Check out the chart for more-detailed guidance, but don't hesitate to improvise if the picture should change via a lower point 'C'.