April Gold stalled last week en route to an important rally target at 3040.90 that will remain viable if the futures don't slip beneath 2586. You should be prepared to bid or bottom-fish aggressively at the midpoint Hidden Pivot, 2838,60, with a tight stop-loss or a small reverse-pattern trigger. If the expected pullback crushes the support, that would open a path down to as low as d=2708.60, equivalent to a correction of 8.7%. The futures would still have a chance to turn around at 2773.60, the pattern's 'secondary Hidden Pivot support'.
A 3040.90 rally target proffered here earlier remains viable, although we should be prepared for a possible stall at 2927.40, a 'secondary' Hidden Pivot. If buyers fist-pump their way through it, that would firm the case for a follow-through to at least 3040.90. The target might not work precisely because of the pattern's murky origins in a clutter of possible starting points. It is good enough for government work, however, and has kept us on the right side of the trend even when bullion was getting slammed by the white-shoe hoodlums who run the show. The ascent to 3040.90 could be relatively steep, since the breakout two weeks ago blew the cover of central banks and others who had been quietly accumulating gold after it stalled in November and traded in a range for several months.
Last week's decisive breakout above the 2791.90 midpoint Hidden Pivot shown in the chart all but clinches a follow-through to at least p2=2905.30, and thence to an almost as likely D target at 3018.70. (The April equivalents are, respectively, 2927.40 and 3040.90.) A pullback in the meantime to the green line (x=2678, or 2700.30, basis April), however unlikely, would offer the juiciest 'mechanical' buying opportunity we've seen in a long while. More immediately, you should expect a potentially tradable stall at 2854.80 (2883, basis April), my minimum upside target for the near term. The usual imbeciles are attributing the breakout to Trump's tariff plans, whatever they might be, but also to a run on London bullion inventories by presumptive buyers in China and India, and to many other sovereign entities that evidently want to be prepared if this already-too-interesting world should turn still more interesting. There is as yet little evidence that the spike in demand for gold has fed into Bitcoin. True disbelievers in the latter's value and potential should consider betting the spread will widen, but don't expect Michael Saylor and his ilk to fade you till their heads cave in.
Careful! Feb Gold topped Friday at a double resistance of daily-chart degree. One of the impediments is shown in the chart: the 'd' target of a reverse pattern dating back to September. The second was a voodoo number that came even closer to nailing the actual high at 2794.80. Taken together, these 'hidden' obstacles made shorting the top relatively easy. The 19-point reaction move was worth as much as $7600 to any subscriber who took my 9:34 post in the chat room seriously enough to squeeze off a trade. Of course, if the futures push past this double-trouble spot effortlessly next week, it would be a very bullish sign, leaving gold on track for a move to at least 2865.90 (A= 2525.40 on Sep 4). ______ UPDATE (Jan 30, 1:08 p.m.): February Gold’s fist-pump this morning through the red line, a ‘midpoint Hidden Pivot resistance’, has cleared a path to $3018, 7% above the current $2822. (That equates to $3041, basis the April contract.) Bullion’s dramatic burst of strength is being attributed to various factors, including Trump’s threat of tariff restrictions and safe-haven demand, but that is like saying the moon has been affecting the tides. Far more likely is that gold has caught a whiff of Big Trouble ahead that we can only guess about. I am already on record as saying stocks have topped, even if Bitcoin has yet one or two more lunatic upthrusts in it to set the hook for the most egregious speculators. The Indoos and the S&Ps may notch marginal new highs as well, but they would occur in the context of a choppy top that does significantly exceed recent peaks.
The futures did everything we expected last week, rallying to within easy distance of a 2765.80 target after falling a few points beneath the correction target at 2678 I'd provided. They will face a mountain of resistance when trading resumes, since there is not just the 2761 peak from December 12 to contend with, but also some distributive layers of supply from the record high of October/November. If something out there is capable of spooking gold above all of this, perhaps we should be careful what we wish for.
Friday's move above my 2728.30 target was bullish and implies that a pullback would be merely corrective. I posted guidance that could have produced a profit shorting the retracement from the intraday high at 2735.00, but the position should have been covered before the close. This week, we could see more upside to as high as 2765.80, or even to 'voodoo' 2793.80, but more likely would be a pullback to 2678.60 first. You can try bottom-fishing there with a small rABC trigger to limit entry risk.
Last week's leap through the 2662 midpoint Hidden Pivot of the pattern shown shortened the odds of a further run-up to d=2728,30, but I doubt the rally will top the record high 2826 achieved on October 30. That's because of the power of the bearish impulse leg in November that took the February contract from 2826 down to 2565 in just two weeks. This implies that quotes will fall to 2500 before this vehicle can get good traction. More immediately, a drop to the green line (x=2629.60) should be regarded as an opportunity to bottom-fish 'mechanically'. The implied $33 stop-loss means the trade should be executed only with a small-pattern (i.e., 'camouflage') trigger to reduce entry risk by at least 90% theoretical. _______ UPDATE (Jan 6, 9:43 a.m.): Using reverse a=2636.50 (15m, Jan 6 a7 2:45 a.m.) produced a quick, theoretical gain of $700 per contract, with two contracts covered at 2638.20 and two still 'live'. The 'd' target lies at 2651.80, and a pullback to 2631.40 would trigger another 'mechanical' long, stop 2624.50. _______ UPDATE (11:16 a.m.) Feb Gold has pulled back $9 after coming within a dime of the 2651.80 rally target I furnished a little more than an hour ago (see above). Going by-the-book and using reverse a=2636.6 would have produced a profit of around $4,800 on four contracts. That assumes a 50% partial profit at p=2,638.20, 25% at p2=2645.00, and the last 25% at d=2651.80. _______ UPDATE (Jan 8, 8:26 p.m.): Careful, since the current uptrend may have limited potential. I'm using a 2728.30 rally target, and your trading bias should be bullish until the futures get there. If buyers surprise by blowing past this Hidden Pivot resistance, it would open a path to at least 2765.80 or even 2866.00.
I've labeled the impulse leg shown in the chart 'promising' because the pattern's point 'B' low crushed an external low the way reliable A-B legs are supposed to. So what does it promise? Two things of value to us: 1) a profitable 'mechanical' short if the futures should rally to the green line (x=2696.00); and 2) the prospect of bottom-fishing when D=2500.00 -- a logical minimum downside target -- is reached. Because a gaggle of village idiots will be trained on round-number support there, we shouldn't count too heavily on a precisely tradable turn. There is also a chance of that occurring from the secondary pivot, p2=2565.30. However, bottom-fishing there would need to be done with a 'counterintuitive' (i.e., rABC) trigger. Nudge me in the chat room for guidance in real time if I'm around. _______ UPDATE (Jan 2, 2:18 p.m. EST): I don’t trust today’s rally, but there is no percentage in trying to intercept it. The Feb contract is currently trading at 2668.30 and looks likely to achieve 2722.40. That would still leave it shy of December’s 2761.30 peak, let alone the record 2826.30 recorded on 10/30. One trade to recommend: buy a dip to 2628.10, stop 2596.70. Since that implies $12,000 of risk on four contracts, you would need to fashion a small-pattern trigger (aka ‘camouflage’) to cut the risk by 95% or more.
The three-day dance around p=2630.70 left me mildly bearish when the week ended, but not so bearish that I would recommend a 'mechanical' short at the green line. Although the bounce to the line will have occurred off our sweet spot midway between p and p2, the tedious, irregular C-D leg let off enough steam to flatten A-B's bearish energy. That energy is what makes 'mechanical' trades work and the reason why this gambit is unlikely to offer the edge we seek. In any event, the D target at 2500.00 remains my worst-case low between now and December 31. It will also provide good odds for bottom-fishing with a tight stop-loss.
The three-day dance around p=2630.70 left me mildly bearish when the week ended, but not so bearish that I would recommend a 'mechanical' short at the green line. Although the bounce to the line will have occurred off our sweet spot midway between p and p2, the tedious, irregular C-D leg let off enough steam to flatten A-B's bearish energy. That energy is what makes 'mechanical' trades work and the reason why this gambit is unlikely to offer the edge we seek. In any event, the D target at 2500.00 remains my worst-case low between now and December 31. It will also provide good odds for bottom-fishing with a tight stop-loss.
