GOLD Head & Shoulders top to $900

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Posted by Monty on June 12, 2009 at 10:30:31:
IP:79.69.28.222

Gold has been forming a one month Head & Shoulders "reversal" top pattern. Neckline at $945, Shoulders at 962, Head at $990. Today gapped under the neckline at $945 and if volume picks up on this break by end of day, it confirms it's validity with a price target $900. The neckline break is additionally confirmed with the "two-day rule," the requirement of the two successive closes below the neckline. Look to short on any throwback to the neckline as long as it doesn't penentrate much above it or $950 at best.

The EURO/USD currency pair is also in a Head & Shoulder top. Corally, the US Dollar Index in a Head & Shoulders bottom. However, the necklines on these two instruments haven't as yet been broken, but I expect they will if they are to confirm Gold. A dollar rally doesn't bode well for the broader markets. Looks like they're a SHORT along with Gold & the Euro/USD pair.

Oil is also close to a top. It looks like it has a final $9.50 ABC to $74.50.

HEAD & SHOULDERS TOPS & BOTTOMS pattern link:

http://www.recognia.com/reference/patterndescr_hst.htm

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