Gold

Friday's purposeless spasms in the early going did nothing to diminish the weight of the pattern shown, implying more slippage over the near term to at least 1189.90.  The breach on Friday of a low analogous to the one at 1212.80 we'd been using for the December contract gave the futures some lift by running  stops below that number, and although that could delay their descent, it seems assured nonetheless.  The foregoing notwithstanding, I'd turn bullish as all get-out if buyers were to pop this vehicle above the 1268.00 external peak shown. This benchmark should sound familiar, since we used it last week.

When was the last time we saw gold take a second leg up rather than simply give up whatever gains it may have achieved overnight?  It doesn't happen too often, and that's why beleaguered bulls may have felt something akin to exhilaration as yesterday's $40 surge unfolded. Many of them are undoubtedly wondering whether the rally will turn out to have ended the bear market in bullion that began 27 months ago. It's possible, of course. But technically speaking, the evidence still suggests that a Hidden Pivot target at 1125 first disseminated here a while back will eventually be achieved. Even so, the bull deserves the benefit of the doubt for now, since both of Wednesday's discrete thrusts did what a healthy bull is supposed to do -- i.e., surpass at least two prior peaks on the hourly chart.  However, the December contract will have to repeat this feat, and soon, if we are to infer that significantly higher prices lie in store. Specifically, the futures will need to pop above the 1268.00 'external' peak labeled in the chart (see inset). Were that to occur today, there would be little doubt that a significant rally -- i.e., one with the power to continue for perhaps at least 7 to 10 days -- is under way. Incidentally, Comex Gold has been moving very precisely in relation to our proprietary Hidden Pivot targets.  Yesterday's low at 1212.90, for one, lay just a single tick from the 1212.80 target first broached here several weeks ago when the December futures were trading around $1300. Although we had expected a tradable bounce from very near 1212.80 and had told subscribers to try bottom-fishing there, the $40 trampoline bounce in mere hours came as a pleasant surprise.  _______ UPDATE (5:45 p.m.): So much for the crazy

Notice that bulls' best shot on Friday failed to punch past the implied resistance of the two labeled peaks, let alone the crucial 'external' peak at 1267.90. If any of this were to occur over the next several days, we'd be the first jump back on the bullish bandwagon, such as it is.  Barring this, however, the bearish targets given here earlier will continue to obtain: 1212.80, 1195.40 and, ultimately, 1125.00. I am making no recommendation for a 'camouflage'-style entry here simply because the lesser charts that we'd be using to do so are conflicted, reflecting a duel between bulls and bears. _______ UPDATE (8:08 p.m.): No change, although camouflageurs can always attempt to bottom-fish any bearish target that I've highlighted in brown. They are Hidden Pivots, which implies that they are high-odds spots for price reversals.

December Gold was treading water late Tuesday night, up a few insignificant bucks. We've come to understand by now that an overnight rally of at least $30-$35 is necessary for there to be any gains left when the day shift gets done with this vehicle.  It's probably a good time to reiterate the bearish sequence of Hidden Pivot targets we've been using in recent weeks: 1212.80 and 1195.40.  Remember as well that there's a bear-market target at 1125.00.  Please note that we could banish such negative thoughts, at least for the time being, were the futures to leap above the 1267.90 'external' peak shown.

It’s been a while since we’ve seen the futures move higher for two consecutive days, but it looks like the drought will finally end today.  This is notwithstanding the fact that after-hours trading began with a lurch higher that would have trapped more than a few bulls. But the pullback so far has been shallow, suggesting that shorts for a rare change were mildly on the ropes early Tuesday morning. Now, if they can goose this vehicle past the 1263.20 ‘external’ peak shown, then go on to exceed the 1264.00 ‘D’ target, that would set a bullish tone for next week.

The futures will have a chance to reverse their slide at the 1228.30 Hidden Pivot support shown, but my hunch is that they've been too long in distribution to escape with merely a marginal new low this week. An alternative target at 1222.30 can be bottom-fished with a stop-loss as tight as 1221.90, but I'd suggest limiting contract size to one. Alternatively, if gold surprises with a show of strength, a print today at 1263.30 would turn the lesser charts encouragingly bullish.  Bigger picture targets we've been using that remain to be filled: 1212.80 and 1195.40.

Next stop on the way down:  1212.80, the second of three descending targets we've been using to gauge the bear's continuing strength. (The third lies at 1195.40.) The one at 1237.40 hit yesterday was two months in coming, and although it was exceeded by just $1.60, the pattern that produced it was so precise that the target shouldn't have been exceeded at all.  Things are never quite so dismal, however, as to be hopeless. But it would take an upthrust to at least 1268.00 today to give bulls a fighting chance next week. Failing that, look for 1212.80 to produce a tradable bounce, followed by a relapse to 1195.40.  My big picture target for the bear market is still 1125.  (Note to scalpers: 1228.30, a minor hidden support not mentioned earlier, can be bottom-fished with a stop-loss as tight as four ticks.)

Yesterday's price action looked distributive, lending weight to the stair-step targets given here earlier at, respectively, 1237.40, 1212.80 and 1195.40. Keep in mind as well that a bear-market target at 1125.00 that comes from a much larger pattern is in play too. Alternatively, the futures would provide a faint glimmer of hope with a thrust today or tomorrow exceeding the 1281.70 'external' peak shown. That would turn the 15-minute chart bullish -- not much, but all bull markets have to start somewhere.

Although we've been using a bearish sequence of targets at 1237.40, 1212.80, and 1196.40, we went against the forecast yesterday to trade a promising rally. Details of the trade were advanced to subscribers early Thursday morning in the form of a bulletin.  Traders' outcomes would have varied, however, since the entry signal, tripped at 1282.50,  gave way to a rally that died at 1293.80 -- well shy of the 1298.10 target. The target remains viable, and the futures have yet to dip below the entry price. However, I'll leave it up to subscribers to determine whether they stay in the position. My gut feeling is skepticism, since the futures should have been able to reach so modest a target easily. _______ UPDATE (November 18, 1:07 a.m. EST): The finishing stroke to our presumptive rally target at 1298.83 is taking quite a while, especially considering how unambitious the target is.  It remains valid nonetheless, but you'll need to craft your own entry strategy amidst the tedium of fluctuations that are now entering their fourth day (see inset, a fresh chart). Bulls will need to do somewhat better to energize this vehicle for bigger and better things. Specifically, they must overshoot the target and  surpass the 1313.40 peak without pausing for breath. The bigger picture remains bearish, defined by the sequence of targets given above.