Gold

The futures were trading moderately higher Sunday night, although most of the gains occurred in the space of a single bar that was over too quickly to trade. Buyers appeared to pull back precisely to the 1157.10 midpoint pivot shown, implying this vehicle will be bound for its 'D' sibling at 1163.80 on the next leap. If it were any vehicle other than gold, I'd say a move to the target is a lock-up. But in view of bullion's wonted failure to reach 'easy' rally targets these days, we can only wait and see. As always, it will take a move past the target to hint that this rally will be more than just a flash-in-the-pan. _______ UPDATE (4:12 p.m.): The rally topped at 1163.30, five ticks from my target, and then the tide receded to an intraday low of 1149.30. Some subscribers reported getting short near the high. If you stayed short, please let me know and I'll establish a tracking position for your further guidance.

The 1140.00 downside target given here yesterday remains viable, but another at 1128.40 should be considered if it fails. It would be corroborated by a bounce on Wednesday from the 1151.40 midpoint pivot shown. As always, the more precise the bounce from p, the more likely an exact hit at the D target -- in this case 1128.40 -- if p is breached.  Alternatively, it wouldn't take much for bulls to muster a counterattack. Specifically,  a thrust exceeding 1174.40 (the  point C high of the downtrending pattern) would put the futures on track for finishing the week on an upswing. _______ UPDATE (8:47 p.m. EDT): No change in my outlook.  _______ UPDATE (March 12, 8:09 p.m. EDT): Still no change, notwithstanding yesterday's gratuitous $16 hump, which topped, more or less untradably, at 3 a.m.

A bearish pattern took shape yesterday that suggests the bear market's next plunge will hit 1140.00.  The 1157.20 midpoint pivot could help break the fall; regardless, it can serve as a minimum downside target for the near term. I would suggest bottom-fishing at either of these Hidden Pivots, but only if you've caught a profitable piece of the ride south via a short position. Alternatively, the bullish case would perk up somewhat on an impulsive pop exceeding 1176.70, a level equal to an external peak recorded Friday on the way down.

It's not a happy sign that Friday's selloff crushed several Hidden Pivot supports I'd noted, including a worst-case number at 1167.10. The overshoot was $4.20, sufficient to imply that any rally be regarded as a short-sale opportunity. As of around 4:25 a.m., the futures were butting up against the 1173.10 correction target shown. It's worth a three-tick stop-loss, but this vehicle would become a short-term buy on any pullback from above either of the two labeled 'external' peaks.

I aired a series of minor bearish targets yesterday that implied April Gold will stair-step its way down to 1176.30 in the days ahead, but a new target at 1167.10 'discovered' by a hawk-eyed subscriber looks even more likely to deliver a durable low. The target is associated with a midpoint pivot at 1195.10 that has twice repelled the downtrend, lending authority to the 1167.10 target itself.  The lesser targets, respectively at 1189.40 and 1186.00,  can be bottom-fished if you are eager to day-trade, but I'd suggest doing so only if you've been short for at least part of the ride south.

The 1189.40 downside target of a pattern noted here yesterday remains valid, but a new and lesser target at 1186.00 has also come into focus (see inset).  With two distinct downtrends driving gold at the moment, we might expect an easy move lower. In actuality, the southbound local in recent weeks has been as tedious and tortuous as the rallies. Trading this vehicle is for the nimble only, although price reversals have been somewhat easier to nail in the off-hours. _______ UPDATE (March 5, 1:42 p.m. EST): We noted three bearish targets during this morning's tutorial session: 1189.40, 1186.00, 1176.30. Because gold is well into the fourth year of a bear market, all of these targets are likely to be reached. You can play the expected bounce from the Hidden Pivots identified above, but I'd suggest getting short to them in the first place.  A mechanical short to the lowest of the three could be initiated on a rally to the 1199.70 midpoint support-cum-resistance shown in the new chart. Assuming the futures fall a bit lower first -- to, say, 1191 (or so), a rally back up to p=1199.70 could be shorted mechanically with a stop at 1207.50.  This would implicitly risk a third of what you stand to gain if the futures fall to 1176.30.

Bears appear to have grown weary trying to break down the 1201.90 midpoint support shown. It remains valid nonetheless -- and potentially useful as a place to try bottom-fishing with a very tight stop-loss. Its decisive breach would portend more weakness to as low as 1189.40 over the near term. Alternatively, buyers would need to pop this vehicle above 1219.60 to brighten the short-term bullish case within a bear market now well into its fourth year.

The 1225.80 'buy trigger' I'd suggested here yesterday went unachieved, sparing us the false encouragement of a bull trap rally that died in the wee hours Monday morning. The subsequent dive exceeded a Hidden Pivot support at 1199.60 (see inset), promising more pain for bulls down to as low as 1176.30 over the near term. The futures were ostensibly a bull trade shortly after midnight Tuesday, but let's wait for a print at 1225.30, lest we court disappointment.

The correction from January's 1308.80 high has been nasty, but we shouldn't let that distract us from seeing the turn if it comes.  It's tempting to think yet another leg down is coming over the next day or two and that we should therefore be looking for a way to get short. Notice, however, that the larger, bullish ABC pattern going back to the January 2 low is still intact. That pattern would generate a buy signal on a print at 1225.80 (rounded).  Accordingly, I'll recommend using a 'camouflage' entry signal on the 3-minute chart or less to get long once that number has been hit. This is liable to be tricky, so don't hesitate to seek guidance in the chat room.