The riff-raff were out in force last week, frontrunning the 3751.30 target of the too-obvious pattern shown in the chart. Coy as ever, the futures turned lower from a peak that fell 7 points shy of the target, a well-defined Hidden Pivot. Looking ahead, there are three possibilities to consider: 1) the gallimaufry gets sucked in by a marginal feint above the high; 2) the futures surpass the peak and keep on going; or 3) a significant correction paves the way for a new burst of exuberance. I rate #3 the most likely, although that wouldn’t preclude a head-fake first to a marginal new high. The healthiest and most bullish scenario I could imagine would begin with a pullback to 3520.70, a midpoint Hidden Pivot that could be bottom-fished aggressively with a tight stop. That number is based on the record 3714.00 high remaining intact. However, it would need to be adjusted by the incremental amount of any new top that occurs in the week(s) ahead. If a correction is starting that trounces the 3520.70 support, expect it to continue down to at least 3424.10, or to 3327.40 if any lower. These numbers would also be subject to a 1:1 revision if the futures take out last week’s high. _______ UPDATE (Sep 22, 3:15 p.m. EDT): It didn’t take long for gold bulls to show their hand. Today’s hyperdrive rally has set the December Comex contract on a path to at least 4128.10, a Hidden Pivot that lies 345 points, or 9%, above current levels. There is no room for debate or doubt, as far as I’m concerned. The move must be traded with small-pattern ‘triggers’ to limit risk, since powerful trends attract crowds that cannot but beat their own brains in and cause the rally to become diabolically evasive of their greedy designs. Here’s the chart. ________ UPDATE (Sep 25, 1:54 p.m. EDT): I’ve been expecting this correction to reverse from 3741.10, but the futures have twice narrowly avoided touching this Hidden Pivot support. It could be a sign of incipient strength, but it might also be because ‘my’ target is getting front-run. Only time will tell.
GCZ25 – December Gold (Last:3771.20)
