Gold

December Gold is primed to test a double bottom near 1180 that has produced only weak rallies since the first was recorded about 15 months ago. Odds are not good that the ostensible support will hold, but neither is it farfetched to think that a fake-out breach of the low might give way to a rejuvenated bull market that stretches back more than a decade. This, then, is what we should look for now: a running of stops just below 1180, followed by an all-but inevitable bounce higher.  My hunch is that if that bounce achieves 1325 without pausing for breath, it will be the real McCoy. Notice, however, that any downdraft that exceeds the 'external' low at 1155.60 recorded in July of 2010 would be bad news for bulls, since it would refresh the bearish impulsiveness of the weekly chart.  These numbers will not be exact because this is a composite chart that blends many monthly contracts. But the numbers should be close enough for us to gauge the incipient strength of any selling. _______ UPDATE (October 3, 11:03 a.m. EDT): Several in the chat room recalled an old target at 1198.40. It worked briefly and very precisely for bottom-fishing, promoting a $5 bounce, but the fact that it was subsequently demolished was warning of how weak this vehicle remains. My minimum downside target is still the 1126.05 pivot that I tweeted, Stock-Twitted, talked about during the Wednesday tutorial session, and posted in here the other day. _______ UPDATE (October 6, 2:43 a.m. EDT): The futures have rallied after dipping just beneath the 1285.00 low recorded back in December, but the bounce so far is feeble, suggesting the futures are about to plumb new depths.  Alternatively, it would take a print today or tomorrow at 1211.10 to resuscitate the

December Gold Futures The pattern shown is sufficiently clear and compelling that we should use the midpoint Hidden Pivot support at 1126.05 as a minimum downside target for the next 2-3 weeks. The support is ostensibly very important, since its decisive breach would imply more downside to as low as 813.80.  That would be a far cry from the bullish tone change I said I was expecting by mid-October.  I based that on a conversation I'd had in August with Richard 'Doc' Postma, a regular guest on the Korelin Economics Report.  In the past, Doc has shown remarkably good timing in calling gold's intermediate-term swings. In this instance, we agreed on several key points that appeared to favor an imminent upturn in bullion, including the ability of mining shares to hold their ground when bullion price have been weak. I am keeping an open mind about this, but even Doc has pushed back his timetable. He notes that rather than being a turnaround month, October could produce yet more angst for gold bugs. This, too, is of course highly speculative. But rather than try to parse the logic of it, I'm simply going to trust my charts to tell me what's likely. In this instance, I would say there's an 85% probability of a fall to the 1126.05 target. If so, that would represent a drop of 7.4% from Friday's settlement price. As for a further drop to 813.80, it would become an even-odds bet if 1126.05 is exceeded on a closing basis for two consecutive months, or if it is exceeded by more than $19 intraday. Alternatively, if a bull market is brewing, we should expect not only a robust bounce from within a few ticks of 1126.00, but one that clears the two labeled peaks without pausing for

Gold can be bottom-fished at either of the 'D' Hidden Pivot targets shown, but my strong recommendation -- to repeat the point -- is that you attempt this only if you've been short for the ride to the target.  If you'd rather watch from the sidelines, or if you are taking a prayerful wait-and-see stance, please note that a breach of a Hidden Pivot support indicates that more weakness is likely. In this case, because the 1198.40 target has been six months in coming, we should expect it to evince not only a tradable bounce, but a sustained one of at least 7-10 days' duration.  Any less would be fresh evidence that a bear market now entering its fourth year is not yet over. _______ UPDATE (Sep 16, 11:41 p.m. EDT): Bulls and bears went into 'dueling mode' after the futures impulsed bullishly on the hourly chart, so the jury is still out on this rally. In any case, the recommednation to bottom-fish at 1198.40 should be put on hold for the time being. _______ UPDATE (Sep 18, 1:30 a.m.): Gold has relapsed yet again, putting the downside target and the recommendation above back in play.

We made a game effort to bottom-fish on Tuesday, and although the trade wasn't a home run, it produced a profit of as much a $1000 per contract for subscribers who'd used my 1249.20 target to get long. The position was stopped out Wednesday morning when the futures relapsed to new lows, and it would now appear that a further fall to 1234.20 (see inset) is in the cards. This Hidden Pivot can be bottom-fished with a stop-loss as tight as three ticks (!), but I'd recommend this trade only to those who have gotten short from current levels and who are reversing the position. Alternatively, the December contract would become an enticing bull trade on a bc-type pullback from just above the 1253.80 'external' peak shown. -

The futures pulled out of a two-day tailspin yesterday, rallying $10 from a low that lay 1.10 beneath the Hidden Pivot target at 1249.20 I'd proffered. The breach of the support was more adversity than I would have tolerated myself, but it evidently didn't stop some subscribers bolder than I from staying in the position with a wider stop-loss. The ensuing ride from the low was worth as much as $1000 per contract, but unless I hear from at least a few traders who stayed long into the close, I'll forego tracking guidance.   The bounce was impulsively bullish on the hourly chart, so any bc-type pullback would theoretically be a buy. _______ UPDATE (Sep 10, 2:23 a.m. EDT): Several subscribers reported in the chat room that they are still on board, so I'll recommend cashing out half of the position at or near current levels. That would leave a position of two contracts with a profit-adjusted cost basis of 1239.00.  For what remains, use an impulsive stop-loss based on the 30-minute chart for now. That would imply exiting on an uncorrected plunge exceeding two prior lows at, respectively, 1254.30 and 1248.10.  I'll further suggest taking off a third contract at 1264.50. That is three ticks below the D target, on the 30-minute chart, of A=1248.10, B=1258.60. The midpoint pivot lies at 1259.60, and if it's exceeded by more than three ticks, I'd rate the 1264.80 target an odds-on bet. _______ UPDATE (after-hours): The futures plunged, initially to 1246.90, stopping out the position for a theoretical gain of a little more than a thousand dollars per contract. A subsequent rally gave way to yet another plunge to intraday low at 1244.00.  The futures rallied into the close, but my projection calls for more slippage to at least 1234.10, provided the point

Several subscribers have reported using my 1257.80 correction target to get long near the low, so I've established a tracking position for your further guidance. Assuming half of the position was covered at 1270.00, we hold two contracts with a profit-adjusted cost basis of 1246.10 from an original position of four contracts. To manage risk dynamically, I'll now suggest using an impulse leg stop-loss based on the hourly chart. This implies that the futures would have to breach the two lows shown, and to do so without a visually significant correction once low #1 is breached, to stop us out.  If the stop is hit, brace for more downside to at least 1249.20. You can bottom-fish there with the usual microtight stop-loss, but don't expect to hit a home run on the bounce. ______ UPDATE (2:01 p.m. EDT): Gold has relapsed to a so-far low of 1252.10 -- not exactly a healthy sign. We exited on the stop at 1257.90 for a theoretical gain of $1,180 per contract.  The 1249.20 pivot can still be bottom-fished nonetheless.

In trading early Friday morning, December Gold has bounced nearly $10 so far from within two ticks of my longstanding target at 1257.80. A buy down there would be a home run by now for night owls who were paying attention, but I have no way of knowing if any of you did the trade unless it is reported in the chat room.  Please note that the futures will fall to 1249.20, a Hidden Pivot that I flagged in Thursday morning's impromptu session, if the existing low is taken out.

Yesterday's flaky price action failed by 2.30 to achieve a downside target at 1259.60. The near-miss of a target so clear and compelling would have bullish implications if the next move is higher and exceeds the tiny 'external' peak at 1278.80 shown.  However, a breach of the support, even by as little as five ticks, would hold at least mildly negative implications for the near term.

Earlier, I identified a correction target at 1257.80 that remains viable as a place to try tightly stopped bottom-fishing if demand for gold is soft in the days ahead. However, I also want to give you a bigger, bullish picture (see inset) in case the futures  move higher this week without deferring to our bid.  The buy signal would be tripped on a print at 1299.90, and I would encourage you to look for 'camouflage' entry opportunities on the lesser charts if that should happen. Thereafter, my minimum upside target would be 1326.30, the midpoint p pivot; and thereafter, assuming the midpoint is decisively breached, the 1379.20 D target shown. This is all quite speculative, since, unless we are focused on the very lesser charts round-the-clock, we cannot know exactly when the futures are taking off. _______ UPDATE (Sep 2, 10:54 p.m.): I've adjusted the rally target and key price points to reflect the marginally lower point 'C' created on the weekly chart by yesterday's selloff.  At present, the 1316.00 midpoint pivot is the number to beat.