Gold

To filter out mere noise, which has become more than a little tiresome, I'd suggest setting screen alerts above and below the current market at, respectively, 1397.80 and 1368.20.  A print at the higher number would be bullishly impulsive on intraday charts (although not quite on the hourly, as you can see). The lower number is a midpoint support (see inset), and we should be concerned if it's exceeded to the downside by more than 2.50 intraday, or if the futures close beneath it for two consecutive days.  That would put a 1342.00 target in play -- presumably a downpayment on an even more bearish one at 1219.20 that we've held in mind for quite a while.

The bounce off Thursday's lows points most immediately to the 1394.30 target shown, although we should be wary of the fact that bulls initiating a trade at the first signaled 'x' would have been stopped out. Regardless, if and when buyers get second wind, pushing this vehicle past the 1388.10 midpoint, we should infer that it's on its way to the target. Thereafter, as always, an easy move through 1394.30 would portend another leg up, presumably after a correction. ______ UPDATE (12:17 p.m. EDT):  After pushing past the midpoint, the futures were unable to parlay this success into what should have been an easy move to at least 1394.30.  This is disappointing, to say the least, and implies that today's $13 rally was just more screw-the-pooch price action.

The August contract looks headed for another test of a 1354.20 midpoint support that barely held last time. If this Hidden Pivot is breached intraday by more than $2.00 or so, or the futures close beneath it for two consecutive days, we should infer that they are bound for the pattern's 'D' sibling at 1219.20.  A target very close to this was first breached here a month ago in conjunction with the June futures, along with another at 1190.

Nasty as Friday's plunge may have seemed, it left intact two closely spaced, bullish targets we've been using for the last week or so as a minimum upside objective.  To simplify, we'll remain focused on the lower one, 1426.60, since any rally that gets there is likely to hit the higher target (see archive) at 1427.00 as well.  We'll have a better idea of whether bulls are merely biding their time or, alternatively, seriously fatigued once the down-leg shown has generated a 'c-d' follow-through. If it's no worse than the pause that refreshes, expect the corrective phase to reverse from a 'p' midpoint resembling the hypothetical one sketched.

Coincident rally targets not far above will give us an opportunity to gauge bulls' mettle, assuming they can soon muster the 20-point push to get there. The targets lie, respectively, at 1426.60 and 1427.00 (see inset), and their implied double stopping power should restrain the rally sufficiently to backstop scalpers looking for an easy, if possibly short-lived, short.  However, if the futures were to push past this barrier within an hour or so of touching it, we should infer that still higher prices impend over the near term.

No sooner had the futures exceeded the bullish threshold I'd flagged at 1417.10  (1416.50, basis June), setting up a potential buy signal Friday morning, than they retreated into a duel between bears and bulls. No trading signal was tripped, and although bulls still hold a small edge in this fray, it was not exactly a healthy sign that the decline has come without the futures having reached the 1426.00 rally target shown.  We'll await further price action to inform any trades we might consider, but if last Tuesday's low at 1372.80 fails to hold, prospects on the hourly chart would darken. However, it would take a fall beneath 1354.40 to turn it outright bearish.

Bulls should have learned by now to distrust any and all feints higher in Comex Gold, since each almost invariably gives way to an equal reaction in the opposite direction. That said, bulls still hold a small edge in the task of completing a move to the 1430.10 target shown.  If this were to occur, it would trip the snooze alarm I'd advised setting at 1416.60 At that price, we'd have a bullish impulse leg on the intraday charts -- not to mention, a possible opportunity for camouflageurs to get long if the thrust is subtle enough.

We're into day five of a tedious slog sideways, and it deserves only a small benefit of the doubt as a possible consolidation because of the failure of last Wednesday's spike high to get past the small external peak at 1416.50 (see inset).  That said, if the ABC rally pattern should get second wind, we could expect it to hit a minimum 1430.10 over the next 2-3 days.

Yes, we should be disappointed by June Gold's failure to 'actualize' Monday's promising $61 reversal. But bear in mind that the rally didn't negate bearish targets I'd flagged at 1218.60 and 1190.40, and as a result, any buying we do in gold futures or other bullion vehicles is speculative. For the moment, however, we should plan on doing no buying at all, since the spike high of yesterday's bull trap gave way to a downtrending impulse leg that left bulls and bears locked in a duel. If the top had been just a little higher, exceeding the 1416.50 'external' peak that I've labeled, I'd say bulls had the edge. As things stand, the fray looks pretty even and hints of a sloppy finish to the week. _______ UPDATE (6:19 a.m. EDT): Something has roiled the markets early Thursday morning, sending index futures plummeting and gold higher, although not quite soaring. The high so far is 1392.00, but it'll take an unpaused (once above 1413.30)  thrust exceeding 1416.50 to turn the hourly chart decisively bullish. A clear pattern on the hourly (A=1340.00 on 5/19) pointed to 1426.10, subject to midpoint resistance at 1389.60.