Gold

The futures were consolidating for a push to at least 1229.20 when the week ended, but we shouldn't get our expectations too high, since the only factor seemingly capable of boosting gold these days is a falling stock market. The opportunity here may be for night owls only, since bulls rarely get second wind in this vehicle once U.S. traders have had their second cup of coffee. As always, an easy push through the target would imply the trend driving it is likely to continue.

Gold's delicate little rally couldn't stand a little competition from a rising stock market on Wednesday, and so Comex futures edged lower as shares wafted higher. From a technical standpoint, this turned an incipient consolidation just above a midpoint Hidden Pivot at 1220.00 into a potential distribution.  The 1264.00 rally target associated with that number remains valid nonetheless, but we'll make bulls affirm its viability by checking their vital signs regularly on the hourly chart.  They would regain some credibility with a thrust today exceeding the 1223.90 peak recorded December 16 on the way down. _______ UPDATE (January 8, 9:20 p.m.): Zzzzzzzzzzzzzzzzzzzzzzz.

Gold's upward progress since January 2 has been labored, to put it mildly, but we'll give bulls the benefit of the doubt nonetheless, since they appear to be consolidating this vehicle above the 1216.00 midpoint Hidden Pivot for a push to 1264.60. That implies there's plenty of room to get long for the ride -- a task that would be made easier if you use uptrending patterns on the 5-minute chart to initiate the trade. Just such a pattern was developing Tuesday night, where A= 1215.20 at 7:15 p.m.  An entry signal following a new point C low beneath the one at 1216.00 recorded at 8:25 p.m. would be particularly opportune.

We'll take our rallies one small leg at a time, since Gold has displayed a nasty propensity to disappoint whenever we've turned too bullish too quickly. The current rally, now in its third day, has stalled ay the 1208.20 mipdpoint pivot of the pattern shown. If buyers can push past it by just $1 or so, the futures would become an odds-on bet to reach 1214.80.  As always, it would be a bullish sign going forward if the target is exceeded by a point or two rather than merely touched.

There have been five rally attempts since gold made what looked like a promising low in early November, but none has been anything to write home about. The term 'sucker-bait' comes to mind, or perhaps 'bull traps', mainly because each of the rallies has come off a low that occurred just beneath some prior low. This implies that more than a few bulls would have gotten stopped out near the respective lows, lightening the selling load ahead of the ensuing rally.  Under the circumstances, it's somewhat surprising that the rallies have been so fleeting and feeble. This is not the behavior of a commodity that wants to go higher, and so you should exercise particular caution if you incline toward trading gold only from the long side.  If and when it heads lower, which is what I expect, look for the February contract to fall to at least 1114.80 in search of traction. (My long-term target is still $810, by the way.) This Hidden Pivot support was first broached here nearly two weeks ago with  gold trading around these levels. As I mentioned last week, I'd happily change my mind and wax as bullish as the next guy, if not quite bullish as all get-out, if and when the February futures hit 1256.30. That would generate a robust impulse leg on the daily chart for the first time since August 2013. However, you should keep mind that that rally, promising as it seemed at the time, proved to be...sucker-bait.  Meanwhile, and most immediately, the futures appeared to be consolidating Sunday night at an 1190.80 midpoint pivot for a further push to 1203.80, its 'D' sibling.  They'll need to exceed it, though, to imply that buyers are not fixing to roll over yet again. _______ UPDATE (11:33 a.m. EST):  The predicted

The  trade proffered Monday night worked beautifully, triggering a long-entry signal at 1185.10 that could have produced a gain of as much as $2500 per contract. Check the chart that accompanied this trading 'tout' in the archive if you want to determine whether or not you could have caught the move. Some subscribers in the chat room reported getting long, but I've yet to hear from anyone who did so using the Comex futures contract. If you bought the Februarys based on my advice, you should be out of the 3/4 of the original position and swinging for the fences with what remains. I am carrying a position in the mini-futures myself from the 1140s, persuaded by my partner to hold onto them over New Year's because of gold's so-far favorable interaction with its 50-day moving average.  Upside potential over the next 4-7 days is to the 1268.00 Hidden Pivot resistance shown. This would become an odds-on bet once the midpoint pivot at 1219.4o has been decisively exceeded.

<a href="http://www.rickackerman.com/wp-content/uploads/2014/12/Subscribers-who-bought-gold-at-1185.jpg"><img class="alignleft size-thumbnail wp-image-67033" title="Subscribers who bought gold at 1185" src="http://www.rickackerman.com/wp-content/uploads/2014/12/Subscribers-who-bought-gold-at-1185-122x67.jpg" alt="" width="122" height="67" /></a>The  trade proffered Monday night worked beautifully, triggering a long-entry signal at 1185.10 that could have produced a gain of as much as $2500 per contract. Check the chart that accompanied this trading 'tout' in the archive if you want to determine whether or not you could have caught the move. Some subscribers in the chat room reported getting long, but I've yet to hear from anyone who did so using the Comex futures contract. If you bought the Februarys based on my advice, you should be out of the 3/4 of the original position and swinging for the fences with what remains. I am carrying a position in the mini-futures myself from the 1140s, persuaded by my partner to hold onto them over New Year's because of gold's so-far favorable interaction with its 50-day moving average.  Upside potential over the next 4-7 days is to the <span style="color: #008000;"><strong>1268.00</strong></span> Hidden Pivot resistance shown. This would become an odds-on bet once the midpoint pivot at <span style="color: #008000;">1219.4o</span> has been decisively exceeded.

One step up, two steps back: that's how gold has cruelly "played" bulls since peaking near $1900 in 2011. One of these days, when the accustomed bull-trap rally seems to have lost its ability to rekindle even a faint flicker of hope in long-term investors, the bottom will be in. For now, though, we should treat each new uphtrust as a sucker's bet, buying only at pullback targets or on minor, impulsive breakouts. An uncorrected thrust exceeding 1256.20 over the next couple of weeks would dramatically change the picture, but until such time as that happens, we should view gold's daily ups and (mostly) downs with clinical detachment and just a dash of cynicism. In the meantime, and most immediately, permabulls who can't shake the buying habit might try getting long using a pattern similar to the hypothetical one I've sketched (see inset). It has the potential to reduce theoretical entry risk to perhaps 3-5 ticks -- and there's always the chance you'll be on board for the unexpected ride to $1400 that sustains our interest. _______ UPDATE (8:33 p.m. EST): The trading opportunity I'd alluded to was ripening at press time, so don't tarry if you're keen on getting aboard. _______ UPDATE (10:07 p.m. EST): Shortly before 7 p.m., February Gold tripped a buy signal at 1185.10 with a pattern similar to the one I'd  drawn. Since the futures went on to achieve the 1187.70 'camouflage' target, you should be out of three-fourths of a four-contract position, swinging for the fences with the contract that remains.

My most recent update for February Gold offered a minimum upside projection of 1219.40 over the near term, with a shot at 1268.00 if the futures can get past the lower number without difficulty. The chart shown zooms in on a piece of the expected rally small enough to provide a possible entry point with relative little risk. The pattern has already tripped an entry signal at 1195.70 for a short hop to 1199.10, the midpoint pivot. However, the initial theoretical risk of $480 is about ten times what we would ordinarily put at stake. Instead, I'll suggest cutting the ante down to size by using a still-smaller pattern similar to the one shown to get aboard. _______ UPDATE (10:55 a.m.): The trade was a non-starter, since gold went lower overnight and has remained leaden this morning.