Gold

By fits and starts, the futures appear to be making their way to the 1286.50 target shown.  With gold moving inversely in lock-step with stock prices, it is probably mildly bearish that bullion couldn't make more headway yesterday with the Dow down more than 300 points.  However, going strictly by-the-numbers, a run-up to the target is still no worse than an odds-on bet, since the top of yesterday's fleeting spike decisively exceeded the 1262.00 midpoint pivot. It also refreshed the bullish energy of the hourly chart, since the move exceeded the small 'external' peak at 1264.10 that I've labeled. For night owls, finding a low-risk entry spot will be tricky at best, but I'd suggest waiting for a signal on the hourly chart before zooming down to the lesser charts. The relevant pattern in this case uses Monday's high (see inset) as point B.

Gold bounced from a promising midpoint pivot in almost exactly the way I'd sketched. Unfortunately, its $16 leap was short-lived, ending as it so often does before the regular Comex session got rolling. Thereafter, the futures retraced to within an inch of the would-be launching pad, near where they continued to languish Sunday night. We therefore begin the new week defensively, albeit open to the possibility of a rally strong enough to turn the hourly chart as bullish as it was last Monday. (That would require a print at 1257.00.)  Keep in mind that buyers got sandbagged on last week's opening bar, which proved to be the highest price of the week.

Yesterday's rally stopped just shy of the 1272.50 threshold where I'd said bulls would keep short-term momentum alive.  Instead, they will now have to depend on a mild correction to signal that all is well -- or at least, not unwell. In Hidden Pivot terms, 'mild' here means a C-D leg that reverses from the midpoint Hidden Pivot or above. So that you can visualize this, I've sketched out a hypothetical scenario that would imply renewed strength as next week begins.

The bullish case would be strengthened considerably if the futures can push above the 1362.30 peak shown without an intervening pullback of $59 or more.  That would generate the first bullish impulse leg we've seen on the daily chart since the August high, 1433.70. Note that this vehicle has been moving very precisely in relation to our Hidden Pivot benchmarks.  For one, this year's bull trend came from a low in early January that was just $1.20 from the 1182.60 target shown. More recently, as noted here earlier, the 1279.80 high recorded on Sunday night 1279.80 missed a 'D' rally target by less than 1.00. From a trading standpoint, camouflageurs could try entering on a pullback from just above 1257.80. That is where an obscure but technically important external peak lies. It was created on the way down yesterday and is visible on the 5-minute chart at 9:35 a.m. EST. One final note: If the rally is going to fail, the 1272.45 midpoint is a logical place for this to occur. It was exceeded Sunday night by $7, but the futures have now fallen below it and appear to be having difficulty mustering another charge. _______ UPDATE (10;23 p.m. EST): Yesterday's crazed action saw the futures abort what had looked like a near-certain run-up to the 1274.80 target of a minor rally pattern. The target remains viable, but the futures need only surpass an external peak at 1272.50 recorded on Monday to refresh the bullish energy of the hourly chart.

Monday's ratcheting decline turned an ebullient hourly chart into a mixed picture, with bulls and bears locked in a duel.  The former should still be presumed to hold an edge, since the $28 selloff from the recent high amounts to a so-far healthy, 0.618 correction of a $45 rally. It was fully expected, since we were using a 1278.90 target that came within nine ticks of nailing the last top, 1279.80.  Looking ahead, we'll be better able to gauge the power of the selling by monitoring midpoint supports like the one shown. If bulls are ready to get back in gear, we should see abc corrections go no lower than their respective 'p' Hidden Pivots. Alternatively, if this or any other minor abc downtrend overshoots not just p, but the D target, infer that bears will continue to dominate, at least for the near term.

The minor rallies continue to encourage, since each new one has been able to surpass at least one prior peak (labeled #1 and #2) on the daily chart. The next such challenge lies at 1294.70, where an 'external' peak recorded in mid-November lies. If the rally begun last Thursday from 1230.80 gets past it without an intervening correction of more than $19, that would add weight to the bullish case for the near-  and intermediate-term. Note an additional obstacle as well -- a Hidden Pivot target at 1284.00. If the futures pop through it with little trouble, that would imply they're capable of pushing past 1294.7o as well.

It is puzzling that bullion seems to need stocks to fall in order to rise. Still, we'll take any gains we can get, and they've been pretty decent lately.  My minimum upside target for the rally begun on New Year's Eve is 1278.90, a Hidden Pivot target shown in the chart. Achieving that number shouldn't pose a problem for bulls, but we should want to see them do better by blowing past it with ease. The last $15 theoretical of this move could prove tradable for night owls, since, even on the 60-minute chart, there are some handholds for a 'camouflage' entry. (I've labeled the tradable pattern for your guidance, but the actual entry should be pursued on a chart of lesser degree and with the goal of holding theoretical entry risk down to five ticks or less per contract.)

Yesterday's tout allowed for a pullback to as low as 1237.40 for gold to remain in feel-good territory, but the futures exceeded it, generating a bearish impulse leg on the intraday charts in the process.  You know the drill by now: We'll wait and see what the C-D follow-through leg looks like before we jump to negative conclusions. The most bullish thing that could happen would be for C-D to reverse from the midpoint pivot or higher, and then to generate a bullish impulse leg on, if not the hourly chart, at least the 30-minute.  I've sketched this hypothetically for your further guidance. ________ UPDATE (January 22, 11:10 p.m. EST):  Sellers easily smashed the 1234.40 midpoint support noted above, implying this decline will continue over the near term down to at least 1224.90.

U.S. markets are closed Monday in observance of MLK Day, but Gold has been set loose Sunday night to vent whatever pent-up forces of supply and demand may have built up globally since last week's end. The unsurprising result has been a fleeting spike higher (to $1262)  on the opening bar, followed by a period of detumescence that continues apace.  The rally, although ostensibly harmful to bulls who got knee-capped, was bullishly impulsive nonetheless, having exceeded an obscure 'external' peak at 1256.50 recorded on December 12. A pullback to as low as 1237.40 is therefore a buy in theory, but I am making no specific recommendation, since I won't be in the chat room Monday to provide further guidance. _______ UPDATE (5:20 p.m.): Not much has happened since the analysis above went out, so it can stand as written. I'll be traveling on Tuesday and am therefore encouraging a little some group-think in the chat room in order to leverage the tradable ups and downs of this vehicle via camouflage.