GCZ24 – December Gold (Last:2567.40)
I’d suggested paper-trading this vehicle by bottom-fishing with a $17 trigger interval. In theory, if gold’s wrenching downtrend is about to reverse, the trade should produce an easy winner. In actuality, it stopped out the first opportunity and is in the throes of a profitable second. But the bounce, for starters, will need to exceed d=2608.50 to imply a recovery with the potential to achieve a new all-time high. My target above late October’s 2801.80 record would be 2940.10. For now, though, we should look for the futures to work their way lower. If they fall to the green line (x=2497.50) of this pattern — the one projecting to 2940 — it would trigger a theoretically appealing ‘mechanical’ buy. In practice, however, it would be akin to catching the falling piano, and I am therefore recommending the trade only to subscribers who know how to pare the risk down to literal chump change. If the trade gets stopped out below 2350.00, wrecking the pattern, it would imply that bullion is not in a correction, but a bear market. //// UPDATE (November 21, 12:44 p.m.): With an intraday high today of 2676, December Gold is enjoying a robust bounce from 2541, well above the worst-case low I’d projected. This is bullish and puts the 2940.10 rally target credibly back in play. Please note that I’ve substituted $2724 in the headline for $2608, the original number. That is where the most crucial rally resistance lies, and it is also my minimum upside objective for this so-far bounce.
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Rick Ackerman