June

June Gold trampolined off a 1683.10 Hidden Pivot Wednesday, enabling subscribers to get long in their favorite bullion vehicles at or very near the intraday low. I'd posted a heads-up in the Trading Room as the futures began their turn, noting that the 1683.10 'secondary pivot' of a pattern that has been in progress for six weeks was a 'logical' place for a bounce.  The futures rallied $30 from an actual low at 1684.20, and although they are not yet out of the woods, the bounce has turned the hourly chart bullish and breathed new life into targets as high as 1879. ______ UPDATE (May 28, 7:01 p.m. EDT): What would it take to imply the futures are out of the woods? Answer: an upthrust exceeding the 1757.60 peak recorded on May 20. I've set a screen alert to wake me when bulls get there.

I've adjusted our rally target slightly upward to 3069.00, a high-odds turning point that you can short provided you've made at least $600 on the way up. The 'mechanical' buy I'd noted here yesterday is currently profitable to the tune of about $3300 per contract, but I did not recommend it because it came off a 'sloppy seconds' signal. Anyone who took the trade would have suffered an adverse swing of about $1000 per contract before it came home, although the 'mechanical' setup ultimately worked as such trades are supposed to when stocks swoon violently.  As always, an easy move past so clear a Hidden Pivot resistance as 3069.00 would imply the uptrend is likely to continue. ______ UPDATE (May 28, 7:04 p.m. EDT): The intraday high occurred two ticks off the original target, 3065.50, but it was close enough for some Trading Room denizens to make hay. Here's a report from one of them, MattB, a regular at the Wednesday morning tutorial sessions: "Rick, sorry, but I missed the [E-Mini Nasdaq] trade. I was busy using your tricks in [the E-Mini S&Ps]. Paid for the next few years' subscriptions with two contracts in 23 minutes."  We should know soon if the target caught an important high ahead of the weekend.

I sometimes joke that virtually every trading vehicle, in every time frame, whether trending up or down, reverses from p2, the secondary pivot, virtually every time. Or so it would seem. I was never really a p2 kind of guy, but my mentor, Ira Tunik, used it so often, and persuaded so many Rick's Picks subscribers that it was important, that I eventually started to pay attention. That's when I began to see that it actually does repel trends almost as consistently as my beloved 'p' midpoint Hidden Pivot. It has also become clearer recently that some of the most successful traders in the room have been using p2 to set up rABC trades that deliver as consistently as a loose slot machine in a Reno bust-out joint. All of which is intended to call attention to the chart shown in the inset, a weekly graph of the E-Mini Nasdaq futures. This lunatic-powered vehicle comprises an invincible core of no-decision stocks that institutional holders would never even consider selling. That is why it is spitting fire at the moment, just inches from record highs. Notice as well that Wednesday's peak, which put a new high on the bounce from March's Mindanao abyss, occurred almost precisely at p2=9585. I wouldn't want to put ideas in your head, but there are worse places to attempt getting short.  Just sayin'. We can use puts in $NDX, so stay tuned to the chat room for timely ideas -- or make sure you've enabled 'Updates' on your account page. The caveat here is that buyers shredded the 8600.00 midpoint pivot the first time they encountered it on the way up. This made it likely that D=10,571 will be reached. As you can see, it sits well above the current record high at  9763.00.  I can't

Friday's agitated price action was telegraphed at 3:00 a.m. overnight, when the futures meandered aimlessly below a clear Hidden Pivot support at around 3:00 a.m.  This somewhat altered our immediate outlook without significantly affecting its bullishness. Keep the aging, 3153.25 target in the back of your mind as the futures work their way higher, but use the 2984.50 midpoint resistance of the pattern shown as a minimum upside objective for the near term. It will be an enticing spot to squeeze off a short, but not unless you've made at few bucks on the way to it.  A drop of as much as 50 points on Monday would change nothing. _______ UPDATE (May 26, 7:53 a.m.): It took the swarm of locusts 18 hours to munch through 2984.50; now the immediate objective is 3024.88 (see inset), and thence the pattern's D target, 3065.25.  _______ UPDATE (8:59 p.m.): A meaningless selloff late in the day triggered a 'mechanical' buy signal at p=2984.50, stop 2957.50, but I didn't recommend the trade because of its poor timing -- i.e., at the closing bell. We'll take another look if the futures come down to x=2944.13, the green line.

The impressive rally that began the week went nowhere, leaving the futures about where they were in early April. They triggered a weak 'mechanical' buy signal at 1718.10 (the green line shown in the chart) on Thursday at the closing bell, but I did not explicitly recommend the trade ahead of the three-day holiday weekend. It implies minimum upside to p=1770.10 over the near term, but we'll hang back on a possible belated entry until we've seen how things open Monday night. The 1713.90 'D' target/support shown in this chart would be a good place to attempt tightly-stopped bottom fishing if it were to occur overnight or early in Tuesday's session. _______ UPDATE (May 26, 11:06 a.m. EDT): Gold is once again on its knees, too tired to do battle with a rampaging stock market.  The Hidden Pivot at 1713.90 noted above yielded a $4 bounce that lasted all of seven minutes -- too feeble for any profit taking other than by the nimblest traders. _______ UPDATE (May 26, 9:08 p.m.): Gold has turned to dross yet again, unable to compete against a stock market that has gone loco. You could attempt bottom-fishing near 1680 provided  you know your rABCs, but otherwise I'd suggest spectating as the  futures fall to as low as 1652.40 over the near term. Here's the chart.

We are trading with an ambitious rally target at 3153.25, but first things first. The immediate objective is the 3008.00 Hidden Pivot shown in the chart. Given the way Monday's stampede crushed the midpoint resistance, and barring some world-shaking development overnight, the target is all but certain to be reached. Be alert, however, to the possibility that the rally could stall at 2991.25. But if 3008.00 is exceeded decisively intraday, the next significant peak en route to 3153.25 would be at 3074.00. These last numbers are all to be found in this pattern, which is smaller than the ones referenced above but more immediate. It's a lot to keep track of, but to summarize, the sequence of resistances is: 2991.15...3008.00...3032.75....3074.00....3153.25. Any upthrust decisively exceeding one will put the next in play. The HP levels in both charts can be used to create 'mechanical' setups, probably the easiest way to trade this rally. ______ UPDATE (May 21, 8:49 p.m. EDT): The futures have made no headway toward the lowest of my targets, 2991.15, but bears haven't shown much moxie either. I expect the week to end with a whimper as the nation heads into a three-day holiday weekend, but if sellers turn churlish, here's a chart to stay a step ahead of them.

The chart show the pattern I would suggest using if you want to trade ES right now, or at least avoid getting on the wrong side of it. This isn't rocket science, and you need to put aside the intimidating fact that the ups and downs comprise the biggest market swings, measured in points, that have ever occurred. They are no different, as far as we should be concerned, from the patterns we would use on the 5-minute chart to trade and forecast. Note that the D rally target still leaves room on the bearish chart displayed here yesterday to allow a 200 point rally and still be bearish. I went with the bearish pattern first because I did not imagine a rally would occur so soon that would be big enough to tip me bullish. The reason I am so confident in this chart is that its point B high is legitimate, meaning it is not 'sausage', having slightly exceeded an 'external' peak well to the left. I am making no effort to comprehend the silliness of what is going on here, other than in purely technical terms. You should get it out of your heads that what is happening on the charts needs to be tied to economic reality. I am not thinking about reality, just reading the stupid chart. It says what it says, and I you needn't seek answers beyond it to make money and/or preserve capital, our main objectives. We can trade the bejeezus out of it using the same tactics we would on the five-minute chart. At the moment, the best way to cut risk down to size is by using the lesser charts to create set-ups at turning points on bigger charts. Here's a note to ourselves for later (shades of Unk!): If

An interesting fact concerning the Mother of All Bear Rallies that has unfolded since March 23 is that it has exceeded but a single 'external' peak on the daily chart: 2499.00, on March 25. Strictly speaking this puts the rally in jeopardy of rolling over -- or rather, of continuing to roll over, following the April 30 recovery high at 2965.00. Assuming that is what is happening, the next plunge will take the futures down to p=2486.50. There is an alternative interpretation, however, that involves a rather finely nuanced question related to our Hidden Pivot rules.  To wit: Is the March 10 peak at 2873.00 a legitimate 'external' peak? Strictly speaking, it is not, since the price bar on which the peak occurred has not exceeded the bar to the left of it. Even so, there is reason for treating it as a true peak, since it most surely constitutes a significant point of resistance to any rally. This would make the a-b rally shown in this chart an impulse leg -- one capable of propelling the futures as high D=3177.50. I'll go with the bearish case for now, meaning I doubt we'll see a rally exceeding 2965.00, the so-far recovery high. (Be sure to check out my latest DIA tout, since it adds a bearish nuance to this analysis.) As a practical matter, however, there is no reason to be a hero by getting short at these levels with the intention of gutting it out come hell or high water. We'll trade conservatively from either side of the market as conditions warrant, but with an eye toward shorting a top that could give us a play on the next huge downdraft. More immediately, bears should be prepared for frustration in the days ahead, since last week's nerve-racking struggle failed

Gold has struggled for three weeks to fulfill the lofty promise of early April's strongly impulsive rally. While the tedium may have discouraged bulls, particularly when one of the downswings briefly devalued contracts by nearly $100, all of the pooch-screwing has had little effect on an 1873.90 target that has been in play since April 22. The fact that nearly a month's worth of Sturm und Drang has yet to get the June contract even to the 1770.10 midpoint Hidden Pivot has been frustrating, but it looks like it will not be much longer in coming. Bulls were poised to get there when last week ended, and unless Sunday night opens with bullion caught in a game of whack-a-mole, we should count on a test of the resistance by no later than early Monday. What we should want to see then is a decisive push past the pivot, or a two-day close above it, since either would make the 1873.90 target an odds-on bet to be reached. ______ UPDATE (May 9:56 p.m.): Before this agitated hippo plummeted today for no good reason, it exceeded two peaks recorded in mid-April, one of them 'internal', the other external. That is bullish, implying this pullback is merely corrective. _______ UPDATE (May 21, 8:59 p.m.): A pullback to the green line in this chart has triggered a 'mechanical' buy, but the signal is a weak one because the pullback was not 'textbook'. Plan on sitting the day out as June Gold enters its second month of sideways tedium.