Gold

I've reproduced April Gold's weekly chart to show how close the futures are to hitting our bullish benchmark at 1361.20. That would surpass a key 'external' peak from early November, but the important fact to note is that it will have done so with no significant pullbacks on the weekly chart since the rally began on the opening day of 2014. This is healthy price action, and it would become still moreso if buyers continue to push this vehicle without pause above the 1430.20 peak recorded last August. That would generate a bullish impulse leg sufficiently powerful to imply that the rally of 2014 is indeed the beginning of a major bull market. ______ UPDATE (March 9, 5:40 p.m. EDT):  If Friday's shakedown takes another leg down to open Sunday night's session, look for a possible bottom-fishing opportunity near the 1327.30 midpoint support, on the 15-min chart, of a=1353.20 (3/7 at 8:430 a.m.); b=1326.60. _______ UPDATE (March 10, 11:23 a.m EST): The midpoint pivot came within two ticks of nailing the overnight low and the start of a $17 rally. If you got aboard, most of the position should have been covered by now, with the rest tied to an impulse leg-based stop-loss on the 10-minute chart.

Considering that equities were in a rabid, take-no-prisoners short-squeeze yesterday, and Ukraine was on its way to becoming yesterday's news, gold held up pretty well. The scumballs who thrive on beating it down at every opportunity had to accomplish the task in under 30 minutes yesterday -- in the dead of night. Pretty sleazy. And what weakness we saw thereafter was not weakness at all, but rather, bulls saying, Make my day. There is immediate downside risk to at least 1326.60 nonetheless (see inset), but bulls have stood their ground so well here that it's difficult to imagine the selling will get much worse than that. Camouflageurs looking to bottom-fish should monitor charts of 5-minute degree or less near the red and green lines shown. _______ UPDATE (March 6, 10:47 a.m. EST): Gold has popped for a $16 rally this morning after having gone no lower than 1331. If and when it blows past the 1349.10 midpoint pivot, we can infer more upside is coming to at least 1366.90 over the near term. (FYI, the pattern displays nicely on the 30-min: A=1319.30 on February 28.)

Sunday night's Putin-inspired short-squeeze has recouped nearly all of last week's losses in a mere hour, although the hoopla has stopped just shy of the recent high at 1345.60.  The all-but-inevitable thrust past it will be encouraging, but keep in mind that it is the 'external' peak at 1361.10 previously noted here that must be surpassed before bulls can muster their newfound self-assurance for the next big push.  Assuming the good guys retain control overnight, look for the rally to achieve a minimum 1357.80. By implication, any pullback to the 1338.60 midpoint pivot should be regarded as a buying opportunity for traders who are trained in the art of 'camouflage'.

The rally begun on the first trading day of the year remains intact and is especially encouraging because it has yet to correct on the weekly chart. While the absence of a pullback suggests that short-covering is helping to drive gold higher, it would be premature to infer that bulls are confidently in command and unafraid. That would change, however, if this vehicle can push above the 1361.10 peak recorded in November (see inset). The result would be a bullish impulse leg of weekly-chart degree, and it would be more powerful than the somewhat hesitant, failed leg that occurred back in August. For the time being, however, I'd suggest setting a mental alert at 1261.10, since it is above that price where we should begin to see bullish psychology become increasingly robust. If the rally goes still further without correcting, exceeding August's 1430 peak, that would be even more compelling evidence that this two-month-old rally is the real deal. (Trading note: My immediate downside target is 1324.60, a midpoint pivot that can be bottom-fished cautiously. If it fails, though, brace for more downside to 1312.80.)

Wednesday's takedown was the nastiest we've seen in a while. It warrants particularly close watching, since the reversal began off a bull-trap opening that missed our 1353.30 rally target by nearly $8.  If bulls are going to retake the advantage right away, they step in to buy this vehicle near the 1324.50 midpoint support shown. Night owls can bottom-fish there using camouflage, or more simply (but limiting size to a single contract) with a 1324.60 limit bid and a stop-loss no wider than four ticks. If the stop is hit, be prepared for more slippage to at least 1317.80, the Hidden Pivot target associated with 1324.50.  If that support gets trashed too, the futures will likely come down to at least 1308.00 in search of traction. ______ UPDATE (9:57 a.m. EST):  Apologies for the absurdly tight stop that did not even follow my rule of placing stops just beneath the whole number (i.e., at 1323.90).  Anyway, the futures bounced $10 off a 1324.00 low, and if you had the street sense to override my obsessively risk-averse advice, more power to you.

The rally pattern shown should warm bulls' cockles, the moreso because of the touch-and-go landing Monday morning on the midpoint pivot. The ensuing rally has turned resistance to support, affirming the likelihood of a further run-up to D=1353.30 in the process.  The 10-minute chart on which I have displayed this does not show the immediate opportunity very clearly, but if you squint you'll see that camouflage set-ups abound. Night owls looking to get long with as little as 3-4 ticks of theoretical risk should take a look at this one, taking shape as of 8:16 p.m. EST: A= 1335.50 (8:10 p.m.); tentative B=1338.40 (8:20 p.m.). _______ UPDATE (10:24 p.m. EST): The futures obviously weren't ready earlier this evening to make their move.  At the moment, the 3-minute chart suggests the selling could come down to 1331.00 before buyers find traction. _______ UPDATE (10:32 a.m.): The 1331.20 target missed the overnight low by just two ticks. Those who were able to climb aboard have enjoyed a $10 rally since. The 1353.30 target still obtains. _______ UPDATE (February 26, 12:25 a.m.): Bulls showed some pluck yesterday in the early going, but they appeared to have lost their mojo Tuesday night. Don't be surprised if the futures meander overnight, or perhaps for a bit longer, before fresh inspiration strikes. Notice how Tuesday night's so-far high has merely tied the external peak recorded earlier in the day. The rally leg is impulsive nonetheless, raising the possibility of a camouflage entry signal similar to the one shown (see inset).

Since bottoming on the last trading day of 2013, April Gold's daily chart has done what we might expect of a trading vehicle in the early stages of a bull market. Which is to say, it has surpassed at least two prior peaks with each new upthrust. The picture of a baby bull would become even more persuasive if the next surge carries above the 'external' high at 1361.10 that I've labeled in the chart. Ideally, this should occur without a pullback beneath the recent, 1307.10 low, and with no subsequent corrections of significance until 1361.10 has been exceeded.  Meanwhile, the April contract will trip yet another short-term 'buy' signal if it touches 1330.90 today or tomorrow. Since theoretical entry risk using the large ABC pattern shown would be nearly $2400 per contract, I'd suggest that traders zoom down to the three-minute chart or lower in search of a less risky entry signal. Using the 'camouflage' technique, we should aim to limit entry risk to no more than about $60 for each contract acquired. If I am in the chat room when the entry signal is tripped, pleased don't hesitate to query me.

The futures have pulled back from a peak that came within $5 of a 1335.30 target introduced here a week ago, when this vehicle was trading $40 lower. The target remains valid, but in the meantime we should regard any pullback as a buying opportunity. That's because the top of the most recent rally leg refreshed the bullish energy of the daily chart by surpassing November's 'external' peak at 1325.20 (see inset).  Camouflageurs should look to do their buying near the p or D Hidden Pivot of corrective downtrends on the lesser (i.e., 15-minute or lower) charts.

The April contract is making fitful progress toward the 1335.40 rally target broached here earlier. Traders should bring a confidently bullish bias to their efforts, but with the following caveat: Bullish AB impulse legs have routinely been generating false entry signals on the intraday charts. Accordingly, when looking for promising turning points on charts of larger degree, you should arbitrarily let the first such opportunity pass before zooming down to a lesser chart to line up the actual trade. In practice, this means waiting for a second point C low to form before you act.