Gold

As noted in the chat room after Thursday's close, August Gold looks to be consolidating for a thrust to 1327.00 now that the rally has exceeded the crystal-clear target of a lesser pattern at 1288.50 (see inset). Night owls looking for 'camo' entry opportunities should use the 1289.00 trigger of the pattern shown (60-min: A=1246.10 at 2:00 p.m. on 7/10, where p=1301.70). The purple ABC coordinates show this.  ______ UPDATE (July 18, 12:30 p.m. EDT): Yesterday's nasty reversal, triggered by more intelligence-insulting blather from Fed PR-meister HeliBen, left our rally target intact, but it also generated a bearish impulse leg on the hourly chart (see inset) that bears watching.  The b-c follow-through has yet to develop, but if the resulting pattern reaches or exceeds its D target, be prepared to reef the sails. _______ UPDATE (July 19, 1:23 a.m.): It would be quite bullish if August Gold were to push above Wednesday's 1299.70 peak without having touched the 1278.70 midpoint correction target of the pattern shown.

Most unusual: Gold , index futures AND the U.S. dollar were all trading moderately higher early Monday morning. Are traders perhaps unclear on the concept (whatever it might be)?  In any event, it's a good time to look at gold's chart in isolation from the seemingly anomalous. Accordingly, and mechanically speaking, the August contract wants to ascend to at least 1264.10 (or perhaps to 1266.30, based on a slightly lower 'A') over the very near-term. Notice how buyers pushed it well past the 'p' midpoint within the last few minutes. That make a follow-through to the target all but certain. It would also leave the futures well shy of the 1301.80 print required to generate a no-doubt-about-it bullish impulse leg on the hourly chart. Still, higher is better than lower, and it will at least earn bulls the benefit of the doubt, assuming price can hold aloft overnight and into the start of the regular session. _______ UPDATE (11:40 a.m. EDT): The point 'C' low of the rally pattern has been violated, negating the target. More significant is that the top of today's rally failed, in chicken-hearted fashion, to take out last Wednesday's 1259.30 peak. It did take out a slightly lower peak a couple of bars to the right of it, but the pullback that followed couldn't even generate a profitable 'camo' trade of leastmost degree. This feeble action has bearish implications for the moment, although it's nothing that a thrust exceeding 1279.00 couldn't cure. A print at 1279.10 would generate a bullish impulse leg on the 30-minute chart. _______ UPDATE (July 10, 11:45 a.m.): Today's upthrust has put August Gold back on track for a run-up to at least 1287.90. The move is not only bullishly impulsive on the hourly chart, it appears to have converted the 1247.40

Although I try to keep subscribers on top of encouraging signs in gold, there's little value in my trying to sugarcoat the technical evidence at hand. To be as straightforward as I can right now, that means acknowledging that August Gold's bounce from the June 28 low at 1179 has not been nearly strong enough to suggest that a major bear market has ended.  More immediately, and from a purely technical standpoint, the weakness of the last few sessions has transformed a promising, bullish impulse leg into a duel between bulls and bears.  To be sure, the larger of the conflicting patterns is intact and still bullish. But as of early Monday morning, the smaller one dictates trading from the short side if scalping.  The chart (see inset) shows what would need to happen for bulls to regain the upper hand -- i.e., a price reversal from p or above that rallies above the red 'A' without pausing for breath.  However, it would take significantly more than that -- specifically, an uncorrected thrust to 1301.80 on the hourly chart, to refresh the bullish energy of the three-day rally we saw from 1179.

Hawk-eyed Pivoteers who scrutinized the chart displayed here yesterday may have noticed that the overnight retracement that primed gold for Monday's strong rally did not quite pull back into the correction window. This means that the bullish impulse leg begun from last Thursday's low at 1179.40 is still technically intact and lacking a b-c leg so far. This is of course bullish -- potentially very bullish -- but we'll need to see how the corrective phase plays out to get an accurate read. Camouflageurs, please note: If things should develop as shown, the 'x' trigger could yield a stellar buying opportunity. ______ UPDATE (July 2, 7:12 p.m. EDT): Today's commentary notes that the $14 selloff did not diminish the bullish look of the 240-minute chart shown.  In fact, the pullback is now sufficient for us to consider the August contract sufficiently recharged for a thrust to as high as 1319.80.  Pivoteers will recognize that that target will remain valid only if Tuesday's 1238.80 low endures. It might not, but I've refreshed the chart so that you can see  nonetheless the pattern that is driving the buying.

Shortly after midnight, the futures have rebounded to within a hair of the 1246.40 pivot where I'd said they'd become an enticing short. However, on the 240-minute chart (see inset), they've also generated a bullish impulse leg that dictates trading from the long side for the time being. (This is why I had originally suggested that shorts be attempted only via camouflage.)  Accordingly, camo traders should watch for a long-entry trigger based on a pattern similar to the one I've sketched hypothetically.  Because buying at X would imply entry risk of at least $1500 per contract, it will be necessary to initiate the trade, camo-style, using a signal from the lesser charts to pare theoretical risk down to more like $40 per contract.  My guess is that you will be able to find such an opportunity only on charts of 3-minute degree or less. If I'm in the chat room when this occurs, I will signal it.  If it happens overnight, however, night owls will be on their own.

There's so much slapdash forecasting going on out there that I decided to take a look for myself.  Now that a clear-as-day Hidden Pivot support at 1219.20 has been obliterated in just 24 hours, we must shift to an even larger pattern in search of a suitably dismal endgame  The pattern shown (in a continuation chart for August Gold) projects an important low at exactly 1004.80, so I'll suggest using this number as a minimum downside objective for the time being.  A rally to the 1246.40 midpoint pivot should be viewed as a belated opportunity to get short, but I'd strongly recommend camouflage if you attempt it, since the midpoint pivot has evinced no precise confirmation so far.

Today's commentary describes exactly what must happen for Comex Gold to generate the most bullish signal we've seen in months. Specifically, the August contract must surpass the two labeled peaks without a corrective pause once the first has been exceeded.  That would create a bullish impulse leg on the hourly chart, with the implication that any subsequent pullback be viewed as a buying opportunity.  Camouflageurs, take note:  If the b-c pullback comes from a high just a tick or two above the 1254.30 peak (#2), that could provide a very subtle -- and therefore low-risk -- way to get aboard.

A 1219.20 target has served us well, tempering any misguided enthusiasm we might have had to attempt bottom-fishing as the price of gold has fallen since early May.  The target, a Hidden Pivot, still looks like a logical place to bid aggressively, albeit with a tight stop-loss.  However, as you can see in the chart (inset), an additional target at 1241.90 derived from a somewhat lower point 'A' beckons as an additional spot to put a speculative bid.  Camouflage is the preferred tactic, but it may be possible to get away with a 1241.90 bid and a stop-loss as tight as 3-4 ticks. If you decide to do it that way, I'd suggest a single-contract trade. _______ UPDATE (June 26, 3:54 a.m. EDT):  Gold is getting slaughtered tonight as usual, with a so-far low at 1242.60 that fell just 0.70 shy of the target given above.  The subsequent $12 bounce was tradable, although only with more difficulty and stress than we should prefer. If you were able to get long near the low and exit on the bounce, then great.  Otherwise, a short to 1219.20 is the play from here.

Gold gutted and disemboweled a minor hidden support at 1353.60 that I'd flagged in the chat room (see inset), shortening the odds of the two-day close below 1353.70 that I'd said would clinch a fall to 1219.20.  There are two structural supports at, respectively, 1338.80 and 1323.00 that seem very likely to at least break the fall, but I expect any rebound from either to be temporary. Even so, and to guard against the hazards of certitude, we'll use 1439.40 as a bullish benchmark, since an impulsive thrust that hits that number would put the good guys back in the driver's seat.