Gold

Gold's price action has a nasty way of stressing Hidden Pivot supports to-the-max before the futures turn higher, so we shouldn't take the current ordeal too seriously until such time as 1272.50 is impulsively exceeded to the downside (see inset). Otherwise, the weekly chart will remain bullish, with upside potential on the next thrust to as high as 1453.00. A lesser ABC pattern at the rightmost edge of the chart is also bullish and needs but a two-day close above 1353.70 to energize buyers for a more sustained push.  This is as simplified an analysis as I can offer, and you should familiarize yourself with the relevant price points if you want to be on top of any movement up or down that truly matters.

By climbing out of a hole yesterday, the futures left themselves poised for a follow-through to as high as 1384.90 by week's end or early next. This target will become an odds-on bet once the December contract has exceeded the 1345.20 'midpoint pivot' with which the higher number is associated. These benchmarks come from intraday charts, but the weekly bars show promise as well, since a 1453.70 target would be in play on a two-day close above 1372.60.  Traders looking to get long Wednesday night should use a pullback from just above 1340.50 (an 'external' peak from last Thursday) for leverage.

Two important technical thresholds lie not far below: 1) the 1280.00 midpoint support of the corrective abc pattern shown; and 2) a key structural support at 1271.80.  I would rate the first as the more important, since its decisive breach would probably spell more downside to at least 1126.10, its 'D' sibling.  The 1271.80 structural low could prove analytically useful nonetheless, since any 'running of stops' just beneath it would unburden the futures of profit-takers, presumably clearing the way for a strong rally.  Please note, however, that a marginal penetration of that number followed by a weak rally of perhaps $5 to 10 would be warning bulls to look out below. _______ UPDATE (September 24, 8:37 p.m. EDT): If the strong bounce off yesterday's low continues past 1336.10 today, bulls will not only be out of immediate jeopardy (see above), they'll be in good shape to regain the offensive.  Indeed, a close above 1345.00 would all but guarantee a continuation rally to at least 1384.40. (The provenance of these two Hidden Pivots is shown in the chart, a new one.) Traders looking to get long can use an 'a-b' pullback from between any of the half-dozen or so prior peaks recorded on the intraday charts since last Thursday.

In an update to Wednesday's tout, I said the December contract is bound for at least 1453.70. This Hidden Pivot target (see inset) would become an all-but-certain short-term bet if buyers can ram this vehicle past the 1372.60 midpoint resistance shown. They've made fabulous progress so far, with a war-whoop rally in after-hours trading that has hit 1367.80. Clearly, the weasels who love to bet against gold are on the ropes, short up the wazoo and wont to grow even more desperate. However, we should never count them out, since they are indeed very clever guys with friends in the highest places.  That is why we should assess the further potential of this rally one leg at a time, using purely mechanical tools, instead of tuning to the likes of Jim Sinclair for pie-in-the-sky numbers and false hopes. Keep in mind that gold is a trade, not a religion. On the daily chart (not shown), if the 1453.70 target is achieved, that would exceed a small 'external' peak at 1447.10 recorded on May 14. That in turn would effectively refresh the bullish energy of the hourly chart, creating even more pain for the weasels -- and therefore even higher prices for gold. Traders looking to get long at any point along the way should watch for impulse legs on the hourly chart, but on charts of 5-minute degree or less for 'camouflage' entry signals. Catching a ride on this projectile would become increasingly tricky as the rally draws in more short covering and more bulls, but there is surely enough talent in the chat room to spot the opportunities, and so that's where you should hang.  _______ UPDATE (6:24 p.m.):  Gold traced out a tight flag Thursday (see inset), presumably consolidating the powerful run-up from a day earlier. Although it

Late Tuesday night, gold was getting pounded again, off $16 from the regular-session close. The so-far low is 1291.50, just a single tick from the 1291.40 target shown. Although this was a good a place in theory to attempt bottom-fishing, the pivot looked too delicate for an all-in bet. (Why delicate?  Because if we had used the picture-perfect one-off 'A' at 1334.80 to generate a target, our maximum downside projection for this down-cycle would have been 1292.60 rather than 1291.40, and that would have meant the selloff overshot the target by $2.10 rather than falling a dime short of it.) In any case, traders may have a second chance to get long with little risk on a 'b-c' pullback from just above the external peak (see inset) at 1296.00. Keep in mind that a bigger picture -- i.e., the weekly chart -- will remain correctively bullish down to 1271.80. _______ UPDATE (11:31 p.m. EDT): On the three-minute chart, the entry trigger came at 1296.70, at about 10:54 p.m. The rally subsequently surpassed p=1297.80, leaving you long (in theory) two contracts for a shot at D=1300.00 (where one more contract should be exited). I'm not going to assume any fills here, but if you attempted the trade please let me know in the chat room so that I can get an idea of how many subscribers are out there waiting for these morsels. [Further update, 12:57 a.m.: The futures failed to reach D, falling to what would have been a nearly-break-even stop at 1296.50.] _______ UPDATE (3:39 p.m. EDT): With no Fed tapeworm in sight, the futures have blasted off after bottoming a dime from the target given above. Now, if the December contract pushes easily past the 1372.60 midpoint resistance tonight or tomorrow as we should expect, you can count

Even with a double entry signal (see inset) the futures were having difficulty getting airborne late Monday night. That said, entry off the small pattern at the rightmost edge of the chart required an initial stop-loss of five-ticks -- just within our range for this vehicle. Since the opportunity is past, however, I am proffering the chart to give you an idea of the kind of set-up you should be looking for.  There are still a couple of 'external' peaks yet to be exceeded in this picture, and they have the potential to reduce theoretical entry risk to perhaps as little as three ticks.  Step back to the hourly chart, however, and the picture is moderately bearish, with a 'D' downside target at 1294.10 that will become an odds-on bet if the midpoint support at 1305.40 gets mauled.  Either number can be bottom-fished with a tight-stop-loss, or more conservatively using camouflage.  Coordinates for the pattern are: A=1325.30 (11:00 a.m.), and B=1302.70 (5:00 p.m.)

With Sunday night's $28 surge, December Gold's 60-minute and weekly charts are now synchronously bullish. However, while the former has already tripped a buy signal, the latter will need to hit 1345.20 -- $9.30 above the so-far high -- to do likewise. Traders should come to the task with a bullish bias, but I'd suggest waiting for a second point 'C' low to form before you look for a 'camouflage' entry signal on the lesser charts.

With Wall Street visualizing Whirled Peas and the transformation of the Middle East into a boring oasis of stability, gold has somehow managed to hold its own.  Even so, the breach of the 1366.90 midpoint support shown in the chart has put the burden of proof on bulls for now, since it portends more downside over the near term to as low as 1338.80, the 'D' target of the pattern. (Note: You can bottom-fish there with a tight stop-loss.) Alternatively, the most bullish thing that could happen would be for the futures to reverse direction and create a bullish impulse leg on the 'hourly' by pushing above the 1400.00 peak recorded last Thursday.  Less decisive but encouraging nonetheless would be a pop exceeding the 1380.30 'external' peak made yesterday on the way down. _______ UPDATE (9:52 a.m. EDT): Last night's $37 takedown exceeded my 1338.80 target by nearly 13 points, activating a new correction target at 1319.80 (A=1434.00 on 8/28, daily chart) that lies about $6 beneath the so-far low.  You can bottom-fish there as well with a tight stop-loss, perhaps emboldened by the fact that the futures took their biggest bounce overnight -- a $6.30 move -- from exactly 1338.00.  If you are concerned that this nasty selloff is something worse than a correction, check out this pattern on the weekly chart to be reassured that it is not: A=1271.80 on 8/9; B=1434.00 on 8/30; and C, still informed=(prospectively) 1319.80. ______ UPDATE (September 13, 1:08 a.m. EDT): Gold's ups and downs have been very precisely predictable lately. Yesterday, for one, the futures bottomed at exactly 1320.40 -- 0.60 from the target proffered above -- then rallied $10, so some subscribers may have caught a nice ride. The bullish tide has receded by nearly $8 since (see inset, a fresh

It's possible some subscribers are still long from Friday's bottom since the 1359.00 correction target I'd disseminated the night before caught the low of a $35 bounce within two ticks. The rally was only mildly impulsive, however, since it sputtered out just shy of an important 'external' peak at 1400.00 recorded a day earlier.  It must be displayed on the 30-minute chart to be usable, however (see inset). In that context, buyers have yet to push past midpoint resistance at 1397.60, and so that will remain our minimum upside target as long as the point 'C' low at 1380.30 remains intact. Once 1397.60 has been breached by more than 1.00 point or so, the 1414.90 Hidden Pivot (aka 'D') with which it's associated will be in play. Traders should note that there is enough distance between 1397.60 and the obvious peak at 1400.00 to set up a nice entry point if there's a b-c pullback from somewhere in-between. ________ UPDATE (September 9, 6:52 p.m. EDT): Zzzzzzz. Yesterday's constipated action left my recommendation unchanged.