Tuesday, April 11, 2006
Here is a condensed hourly chart showing pit and electronic trading in June gold futures.
The market has reached 605 resistance and is trading only a little above the 598 level which is the 2 3/8 multiple of the 252 low in 1999. As I mentioned in my last post gold is showing early signs of an end to its uptrend.
Right now I am looking for indications that the 608 level reached overnight is the high. One indication would be a break below 596 which would tell me that the swing up from g to h is over. Another, possibly earlier indication would be the formation of two consecutive tops lower than the 608 high. Any weakness after the rally to the second lower top would be a warning that 596 will be broken and that a big drop is about to start.