Gold

Gold reversed sharply yesterday from just above the 1382.80 midpoint pivot I'd flagged.  That was bullish in itself, but even moreso was the reversal's having generated a bullish impulse leg on the hourly chart. Notice as well that the intraday high came within a hair of the 1414.80 midpoint pivot. That was a logical place for buyers to take a breather, but I expect them to push past the midpoint by no later than Wednesday morning. If so, a two-day close above 1414.80 will put the 1456.00 rally target shown in play. Camouflageurs should look diligently for uptrending ABCs to ride following any pullback from above 1414.80 (aka 'p'). That's because the futures will be signaling a breakout on our terms that relatively few other traders and technicians will have noticed. _________ UPDATE (9:36 a.m. EDT): Last night's takedown occurred after the futures had poked above the 1414.80 benchmark we were using. The overshoot was $1.60 -- mildly bullish but still well shy of the two-day close above the pivot we'd stipulated . The futures are now in 'dueling' mode, but bears would gain the upper hand short-term on a print today beneath Tuesday's 1384.30 low.

The yellow flag is out, since the drubbing December Gold received on Sunday pushed it well beneath a clear target at 1390.10 that had served as our minimum downside objective. This portends more weakness, presumably at least to the 1382.80 midpoint support shown in the chart. Any lower, however, and we should brace for more selling to at least 1367.20, or perhaps 1355.60 if the first number is smashed. All of these numbers are Hidden Pivot supports, and each can be leveraged for the purpose of 'camo' bottom-fishing. I'd suggest using charts of 5-minute degree or less, keeping entry risk limited to no more than five ticks theoretical.  My gut feeling is that this selloff is gratuitous -- a mechanical reaction to the important rally target at 1328.80 where we'd expected tradable resistance. The correction would begin to look more serious on a print today or tomorrow below 1351.60, since that would generate a robustly bearish impulse leg on the daily and larger intraday charts

December Gold spent the day playing toe-sies with the midpoint Hidden Pivot support of the corrective pattern shown (see inset), teasing and annoying so far rather than threatening. The move is bearishly impulsive nonetheless, and so we should pay attention if sellers push the futures more than $1-$2 below the red line (p=1403.30) today, or close this vehicle below it, since that would augur more downside to as low as 1390.10 over the near term.

Bulls paused for breath midway between two Hidden Pivot targets -- one major at 1428.80, already achieved; and a lesser one at 1439.40 given here yesterday. The fact that the December contract did so after pushing above the 1426.00 'external' peak from June 6 refreshed the bullish impulsiveness of the daily chart and affirmed that buyers are eager to forge higher as soon as this so-far very shallow correction has run its course. As noted earlier, a two-day close above 1428.80 would greatly shorten the odds of a run-up to $1500 or higher. Traders looking to board can try bottom-fishing near the p midpoint of any corrective abc patterns that develop on the 15-minute chart. In that regard, the pattern shown (see inset) could prove useful. The futures have been screwing the pooch near the midpoint support for an entire day, and the next move could go either way. There's a bull trade here, but 'camo' traders will need to zoom down to the 3-minute chart to create a proper entry set-up. Otherwise, if the futures head lower, 1408.30 is where you should plan to do your buying, camouflage-style or otherwise.  Eagle-eyed Pivoteers may notice that I cheated to come up with a point 'C' high on the chart, but the few rules we use are of course made to be broken.

It's around 1:30 a.m. EDT, and December Gold has just popped through 1428.80, a Hidden Pivot rally target we'd been using since the futures were trading 120 points lower. The actual high so far is 1429.50 -- not quite high enough for us to consider the pivot demolished. As I'd noted earlier, however, a two-day close above it, or an intraday move that exceeds it by more than a couple of dollars, would shift our gaze confident toward $1500. From a Hidden Pivot standpoint, the December contract can still be bought here, albeit cautiously. Although we shouldn't be surprised to see it take a rest because the target it just connected with was an important one, we should remain open-minded to the possibility that the rally is potent enough to shred any technical impediment in its way. Most immediately, the 1439.40 target shown in the chart (see inset) is well in play, implying a bullish bias is appropriate for night owls.

Monday night's bullish stab stopped an inch shy of the 1408.00 midpoint pivot shown. Assuming Gold gets second wind -- a logical outcome, since there are a couple of larger, bullish ABC patterns driving the futures right now -- a move even slightly above p=1408.00 could be expected to generate sufficient thrust for a follow-through to the 1427.60 target shown.  It is close enough to the 1428.80 target given here two weeks ago, when the future were trading around 1311, that we  should expect to see some stopping power. If not and gold blasts through it, or closes above it for two consecutive days, we should take this as evidence that buyers have raised their sights to 1500.

The futures have pushed above mid-June's 1396.50 high Sunday night, generating the first bullish impulse leg of daily-chart degree since the rally began on June 28. This has effectively refreshed the trend, but as always we should remain caution in our assumptions. In practice, this will mean using the so-far stubby rally that has begun from 1351.60 as a point A (see inset) in order to calculate an entry point (via camouflage, presumably), a midpoint resistance and D target. Of course, a point B high has not yet been created, and it's possible the futures will exceed yet another 'external' peak or even two before this happens. That would strengthen the bullish case for weeks to come, but even if it doesn't happen, you should view any pullback that takes the form of b-c leg as a buying opportunity.  Entry points signaled thereupon on the daily chart should be leveraged on charts of much lower degree -- presumably the five-minute chart or less.

Gold's performance so far this week has been disappointing but technically of little consequence. However, because the downtrend penetrated a midpoint support which earlier yesterday had evinced a fairly precise bounce, we should assume that the correction will continue down to at least the midpoint's 'D' sibling at 1345.50. A decisive penetration of that number would imply still more weakness, while a rally exceeding 1367.40 would put bulls back in command, at least for the short-term. _______ UPDATE (August 21, 10:36 p.m. EDT):  I signaled a bullish trade via an e-mail alert about 30 minutes ago, but it was stopped out shortly thereafter. Beause the 'camo' pattern looked so promising, I'm given to infer that gold will remain weak for at least the next several hours or possibly longer. The outlook would brighten, however, on a print at  1368.80. That's a tick above an 'external' peak visible on the five-minute chart, and it could set up another subtle buying opportunity like the one noted above.

A HIdden Pivot target at 1411.60 remains my minimum rally objective for the near term.  Notice that Sunday night's modest move toward that number has stalled precisely at the 1383.60 midpoint pivot of a minor bullish pattern -- one whose 'D' target precisely coincides with the target of the larger one given here earlier.  That implies it will have double stopping power -- but also that any decisive move past it will all but guarantee a finishing stroke to at least 1428.60, a target given here ten days ago when December Gold was trading just above $1300.