Gold futures made a top extension yesterday. The rally that has taken prices up by almost $100 since mid December will probably stall hereabouts and so you should sell any longs and reverse into a short position. We advised buying it in the December 20th edition but we did not have room in our portfolio at the time so did not do so.
The usual caveats apply to any trade involving top extensions. They usually mark the beginning of a ‘top’ formation and a sudden drop is only one possible outcome. Even so, it is worth trying to sell short right away just in case the market does choose that path – there is an established longer-term downtrend and when this is combined with a top extension it means the upside risk is small from here. We have sold short.
All signals generated by software supplied by our friends at Parallax Financial Research www.pfr.com
