Gold

What a day! Although intraday highs and lows associated with the even wildest price action are more or less predictable, it is only the very nimble who should be trading them.  Yesterday's histrionics don't merit an explanation, since any account that we or anyone else might offer would be based on little more than rumors. From a technical standpoint, the series of $25 swings left the December contract in a dive that we should expect to terminate at either of two Hidden Pivot supports: 1172.20, or perhaps 1169.80 if any lower. The second number is the more conservative spot to try bottom-fishing, using a stop-loss as tight as four ticks. Night owls who attempt it should be aware that an easy overshoot of the lower pivot would likely augur a test of the 1146.00 low whence last Friday's powerful surge took off.

Tuesday's stall precisely at the 1204.60 midpoint pivot shown implies that December Gold will achieve q minimum 1228.40 if and when it pushes past the resistance. You should trade with a bullish bias for now, using entry opportunities on the lesser charts to get aboard with reduced risk. The easiest trades lately have come from 'mechanical' entries. In this case, that would imply buying on a pullback to 1204.60 after it has been decisively exceeded to the upside.  A stop-loss of $800 per contract would obtain at that point -- far in excess of what we would ordinarily abide.  One way around it is to pick one's entry spots on ABC patterns of much smaller degree. Another would be the use of a timed buy-stop in the manner taught in the Hidden Pivot Webinar.

The futures look to be consolidating for a push to as high as 1228.40 over the near term. My hunch, however, is that the implied thrust will start from a lower low than the 1180.80 point 'C' shown.  This means night owls who want to get aboard should wait for a marginal breach of 1180.80, then be ready to buy-stop themselves into the trade on an entry signal that would be tripped exactly 12 point above the new low. This is intended as a 'timed buy-stop' entry, since there can be no justification for abiding theroretical entry risk of more than about 0.50-0.70, no matter what your intentions. Using this tactic, you should stay with the trade only if it goes into the black immediately after you enter, and take a partial profit early in the trade. _______ UPDATE 10:40 a.m.): Gold took off last night without the fake-out pullback I'd expected.  In retrospect, the best way for subscribers to have caught the trade would have entailed using the 'timed buy-stop' tactic described, but at a slightly higher price.

On Twitter early Friday morning, I was throwing in the towel on Gold at the very instant Comex futures went bonkers. Technically speaking, the surge in the December contract $1.20 shy of an 1194.10 target that could have been extrapolated from the previous Friday’s impulsive spike. I remain skeptical, but if buyers are able to push the futures past the target, and thence — without correcting — past a small peak on the hourly chart at 1202.80, I’d need to put my skepticism aside, at least for the time being. Gold’s rallies have often erupted when I was at my personal threshold of despair — but also from lows that, technically speaking, were just a tick or two from actual breakdowns (as was the case Friday morning). Whatever happens, we should keep in mind that each and every one of those rallies for the last 3+ years has been little more than a bear tease. According to the technical method I use — my own system — turning the daily chart bullish in a way that would suggest a decisive end to the long bear market would require the December Comex — currently trading for around 1189.10 — to hit 1297.70. Moreover, the rally would need to be uncorrected once the peak at 1255.60 recorded on October 21 has been exceeded.

I'm struggling to give the benefit of the doubt to the bulls, but I can't ignore the fact that every minor abc rally since last Friday's explosive one has failed at its midpoint pivot. This is typically a sign that the dominant trend -- in this case, the explosive rally, to give it the benefit of the doubt -- isn't destined to go very far. A particularly telling aspect of yesterday's constipated price action is that the second attempted rally failed to get past the very modest peak of the first.  Clearly, there is no real buying interest here, even if the right headline could change that for a short while. For now, and still giving bulls the benefit of the doubt, we'll look for a finishing stroke to the 1179.10 target shown. A quick and easy move past it would of course put the 1194.10 target flagged here earlier in play. _______ UPDATE (7:08 a.m. EST): There has been no 'white knight' in the form of a headline felicitous toward Gold -- "Terrorists Nuke L.A." ?? -- and so the futures have taken the path of least resistance overnight -- i.e., lower. If there's any life left in them, they will turn from 1148.00; or if not there, from 1141.50.  Either of these minor Hidden Pivots (60-minute, A=1162.00 on 11/13 at 9:00 p.m.) can be bottom-fished with a bid a tick above the pivot and a stop-loss as tight as four ticks. ______ UPDATE (8:30 a.m.): Don't think that because the futures "only" exceeded the 1148.00 HP support given above by 0.70, that it's doing okay. It's not. Notwithstanding the so far $4.60 rally off the 1147.30 low, when a Hidden Pivot as clear as this one is exceeded by even five ticks, it is foretelling yet more weakness.

Yesterday's dirge wasn't quite the robust follow-through we were counting on, not by a longshot. Instead, the futures drifted lower after stumbling out of the gate. There was no selling pressure, just an absence of buyers, and so the futures took the course of least resistance rather than attempting a run at the 1194.10 target broached here yesterday (which remains valid). Now, I'll suggest using the more modest Hidden Pivot target shown, at 1181.70. A print at 1162.20 would trip the buy signal, but since I'd rate a follow-through to the 1168.70 midpoint pivot no better than an even shot, I'll suggest using 'camouflage' to get aboard. This implies waiting for a b-c pullback in a pattern of lesser degree from a point B high at either 1162.30, 1162.40 or 1162.50. I've labeled the still unformed pattern with a small ABC so that you can see what I'm talking about.

The rally will need some giddyup to escape gravity's pull, since merely dawdling at these levels will only increase the risk of relapse below a major Hidden Pivot support at 1137.50. The support has been tested twice and done its job, but it seems unlikely to hold if it gets pummeled a third time. Bulls kept the futures out of trouble yesterday nonetheless, energizing a $27 rally that offered subscribers a low-risk opportunity to get long. I'd suggested doing so if 1158.90 was touched, which occurred during the regular session at around noon.  Even though we were using an 1195.00 target, I had also warned traders to take a profit at 1171.00, a 'midpoint pivot' associated with the target. This proved to be good advice, since the futures pulled back (so far) by $12 after peaking at 1172.50. Now bulls will need to forge higher, and soon. An obvious benchmark by which we can judge their mettle is the 1194.10 target shown (slightly revised from yesterday).  But they'll need to do somewhat better than that, exceeding the 'external' peak at 1202.80 that I've labeled, in order to take charge. If this has not happened by Thursday night, however, a fall below 1137.50, with the implications noted above, will become an odds-on bet by week's end.

Now that sucked, didn't it? We ended the week thinking, ah, at long last, a decent rally in Gold! After yesterday's nasty slide, however, which took back two-thirds of the gain, it's starting to looks like the rally was just a one-day wonder.  From a technical standpoint, the very major Hidden Pivot support at 1137.50 flagged well ahead of the low is holding; however, it cannot be presumed inviolate. We'll have to let Mr. Market tell us what is on his evil mind, so it'll be wait and see for now. I cannot predict the outcome, but if a bear-market pivot that took 15 months to reach is smashed decisively after holding for just a few days, that would be dreadful news for bulls. More immediately, the futures would trip a minor buy signal at 1158.90. The relevant pattern is shown in the chart, and although I can feel in my bones that an entry at that price will get you at least to the midpoint pivot at 1171.00, I'd strongly suggest nailing down a partial profit there so that you can still be holding a small long position without much risk.  That's what bottom-fishing in a presumptive bear market entails, and we should come to the task with neither hope nor sentimental longing in our hearts.

Ignoring Thursday's fleeting shakedown beneath a major Hidden Pivot support at 1137.50, the futures look to be in good shape Sunday night to continue higher. Price action is subdued at the moment, but it comes on the heels of a rally that exceeded no fewer than four 'external' peaks on the hourly chart without taking a breather.  Conditions do not warrant a green light for getting long at the moment, unless via the 'camouflage' technique. We should wait to see what develops in Monday, but be aware that the next bullish benchmark above lies at 1202.80, in the form of a minor external peak recorded October 30 on the way down.