Gold

Friday's rally was impulsive on the hourly chart and the best we've seen in a week. However, if bulls meant business, they would have taken out the 1849.30 peak recorded on October 3 to complete a hat-trick of 'priors'. Instead, they stopped a hair short of it, presumably too out-of-breath for a final-hour sprint to the finish line. We should give them the benefit of the doubt nonetheless, since the shallow correction off the intraday high suggests that at least somewhat higher prices are coming.  My advice is to keep your expectations low until we've seen how the rally interacts with a couple of minor Hidden Pivot resistances. _______ UPDATE (Oct 12, 8:55 p.m.): A sharp rally reversed just as sharply this morning when the regular session began, but not before buyers had pushed the futures above some external peaks recorded at the end of September. This generated a bullish impulse leg on the hourly chart, shortening the odds of another leg up once the correction has run its course.

Gold is close enough to the depths of despair that we might hope for a rally. However, since hoping is for losers, we'll just watch and learn to like it as the futures swirl down the crapper. Ordinarily, Friday's slight overshoot of D=1865.20 would be no cause for alarm, but in this case we'll infer the worst -- i.e., that the support should have held if gold were ready to turn. If you want a slim reed to grasp, use the 1855.40 target of this gnarly pattern. It's okay to back up the truck there, but only if you use a very tight stop-loss. (Note: I have not boldfaced and colorized the target because I don't want to draw attention to it.) _______ UPDATE (Oct 2, 9:19 a.m.): The $7 rally from within less than a dollar of the number given above would barely have paid for a Soho lunch, although the very tight trigger interval (TI) I'd advised would have prevented a loss. The subsequent relapse means gold is still in gold-is-garbage mode. A little overdone, don't ya think?  _______ UPDATE (Oct 2, 11:07 p.m.): The futures look bound for the 1777.10 target of the reverse pattern shown here.  I am awed by the viciousness with which the bullion bankers and their scummy friends in high places have defenestrated, drawn-and-quartered, impaled and flayed those who might have intended to take delivery on September COMEX contracts. When there's no 'physical' available to supply, Their solution is to crush demand.

I've reproduced a chart that goes back to 2019 in order to show clearly that there has been little drama in more than three years. Comex futures are trading about where they were in the summer of 2020, meaning there has been no net gain since then. The chart is unmistakably bullish and projects to as high as 2326.30 (basis the August contract), but that doesn't mean gold couldn't fall by $200 or more before it heads into, if not the wild blue yonder, then perhaps toward a towering cumulus cloud on the horizon.  A pullback to x=1864.10 in the meantime would trigger a 'mechanical' buy with excellent odds for success, but we'll wait until it gets there before we discuss entry tactics.

Gold is in an obligatory bounce from the green line (x=1934.00), and any long positions initiated there would be showing a paper profit of around $4400 on four contracts. The futures would need to hit p=1954.30 to signal a partial exit, but bulls looked sufficiently energized to accomplish this when trading resumes Sunday evening. I have my doubts that the run-up will reach D=1995.00, though, in part because the turn from the recent low looked too agonized. Regardless, 1995.00 is theoretically in play and would become an even better bet if the rally impales the midpoint Hidden Pivot on first contact. _______ UPDATE (Sep 18, 9:17 p.m.): The textbook 'mechanical' buy that triggered a week ago at x=1934.00 has gone on to produce an $8000 gain for anyone who did the trade. It is time to realize half of your profits now, since the futures this evening have touched the red line (p=1954.30) as anticipated. Here's the chart.  _______ UPDATE (Sep 20, 8:20 p.m.): The vicious bull-trap stab this morning to 1069 was short-lived, but it gave anyone still long an opportunity to exit with an additional $1800 for each contract still held. If you kept 25% of the original position for a swing at the fence, I'd suggest an 'impulsive' stop-loss at 1943.70 for now.

Bulls and bears ended the week playing patticake, somewhat shy of the green lie (x=1934.0) where bottom-fishing would become mildly enticing. A one-level bounce seems likely, although the pattern's elongated B-C leg has diminished the bullish impulsiveness of this picture sufficiently to make a run-up to D=1995.00 less than an even bet.  Although that's unlikely to stoke your enthusiasm, we should try nonetheless to get a piece of the implied 'mechanical' bounce that is indicated with a tight 'reverse trigger'.  Tune to the chat room for possible guidance on this. _______ UPDATE (Sep 12, 7:59 a.m. EDT): The futures have in fact come down to the green line, implying it's time to set up a trigger for the 'mechanical' buy suggested above. On the hourly chart, the nearly 4-point 'natural' a-b is a little rich for my taste, so I am using a= 1947.30 (9-11 at 9:00 a.m.) to set up the trade with a $$1.70 TI. Based on the so-far low at 1933.40, the trade triggered a few minutes ago at 1935.10. First partial profit would be at p=1936.70. For comparison, the more natural a-b, where a=1939.50 on 9-10, would trigger at 1937.40, based on the so-far low at 1933.40. We shall see. _______ UPDATE (Sep 13, 6:20 a.m.): Although the small pattern got stopped out for a $170 loss per contract, the more 'natural' $4 trigger went on to produce a gain of $380 in about an hour.  This is not bad, considering we went long against weak, sloppy price action. Here's an interesting chart from Erik Volma at Gold-Eagle.com. It shows what gold prices did during stock market crashes going back to 1970.

The bullish pattern we used last week to leverage a 1995.00 rally target is still viable, even if there haven't been any pullbacks sufficient to trigger a 'mechanical' buy on the daily chart. That could still occur on a swoon to the green line (x=1934.00), or to the red line, where a somewhat riskier trade would be signaled. More upside to the 1995.00 target is not in doubt, however, given the way the futures punched through p=1954.30 last Monday.  We'll look at other ways to get aboard, so stay tuned to the chat room if you care.

December Gold's failure last week to reach an 'easy' midpoint Hidden Pivot at 1954.30 seems like weakness, but I hesitate to draw so obvious a conclusion about a vehicle that likes to surprise us at the turns as much as this one. My bias remains mildly negative, however, and that implies the futures will at least feint beneath the 1913.60 point 'c' low of the reverse pattern shown. That would certainly be tradeable for bottom-fishing, but we'll let price action determine our next move.  At the closing bell on Friday, bears remained in charge despite a sharp rally from a mid-morning low. _______ UPDATE (Aug 28, 3:44 pm. EDT): Just posted in the chat room: "I can't promise you that last week's low will prove to be the start of a major bull leg, Sparty. But I'm confident this bullish pattern, with a 1995.00 rally target, will make you money regardless -- and it could also clarify the outlook. Today's high occurred a single tick from p, validating the pattern. It has also set up an appealing 'mechanical' buy if Dec Gold should pull back to x=1934.00 (stop 1913.50). Click here to call up the chart. 

The update I put out Wednesday night nailed the week's low at 1914.20 within $1. However, because no one reported a trade, I haven't established a tracking position. I expect the downtrend to resume this week and to hit D=1897.90, a Hidden Pivot that can be traded with a tightly wrought rABC (i.e., reverse-pattern) trigger.  There  could also be a tradeable bounce from 1911.50, but it should be bottom-fished only by Pivoteers who know how to find this voodoo number. The 1897.90 pivot is obviously important, since a breach could send December Gold groping for traction below the Feb/Mar lows around 1883. _______ UPDATE (Aug 23, 10:23 a.m.): Gold is off to the races this morning, presumably on a track to nowhere that has come to resemble a Möbius strip.  Despite my skepticism, however, and because the rally is solidly impulsive on the intraday charts, I'll offer this bullish view as though I were a true believer. Like most fetching 'reverse' patterns, this one is all but guaranteed to work well no matter what your purpose.

No change in my earlier forecast that October Gold would fall at least to D=1908.10 of the pattern shown. This ABCD is too obvious to yield a tradeable bounce precisely from the 'hidden' support, so we may need to let the rubes get stopped out once or twice before we attempt to bottom-fish there ourselves. Obviousness aside, the pattern is pretty 'textbook', and so a significant bounce would appear to be all but certain. A turbocharged one from no lower than 1921.00 or so would provide a technical rationale for getting 'mechanically' short at x=1983.40. However, somewhat more likely in my estimation is eventual slippage below 1908, presaging a test of spring's lows near 1865. ______ UPDATE (Aug 15, 5:35 p.m.): Reversing a relentless plunge, gold bounced sharply from less than a point of the 1908.10 target today. However, because the 1910.10 target has been more than two months in coming, we might have expected more from the rebound. Let's give it another day or two to develop, but trading should be with a moderately bullish bias in the meantime. Here's the chart.  _______ UPDATE (Aug 16, 7:25 p.m.): The next stop on the way to hell is 1895.60, a Hidden Pivot support sufficiently obscure that we can safely assume we own it.  Bottom-fish there with a tightly stopped reverse-pattern trigger, but be aware that if the futures relapse and the support gives way easily, the October contract will be headed down to at least 1878.00. I am suggesting a reverse-pattern entry because gold tends to be most heavily manipulated in the early going. (Note: I will switch to the December contract when I update on Sunday. The equivalent downside targets lie, respectively, at 1915.20 and 1897.90.)