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Gold Coiling for a Breakout $GC_F


February gold futures has been trading around a $1685 to $1690 three day value range begining Thursday afternoon and continued on through the Monday holiday trading session.


Additionally, the last two trading days are "inside days", where the range of the day was within the previous days range. "Inside days" are a form of balance. When a volitile market such as gold is contained within a tight range for several days, a significant move could follow the break from balance. It is possible that the market continues to rotate around this three day value range for the next day or so, but it is necessary to be prepared for a break from this balance.



The market has found support at the $1685 level over the last three days. If the market gains acceptance below that $1685 level, it may trade lower back into Thursdays morning balance range of $1670 to $1674.


If the market begins to gain acceptance above the three day value range, the first reference to watch for is Thursday's $1687.80 high. The market may find resistance at this level the first time up. If the market gains acceptance above Thursday's 16878 high, it may test the $1703.70 to $1708.50 gap.


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About the Author

Joseph Souhlakis began his career in commodities in early 2000 when he took a clerk job at the NYMEX for MBF Clearing Corp. Souhlakis acted as risk and position manager for some of the most successful traders in the crude oil and heating oil pits for more than three years. In 2003, with the backing of Mark Fisher and MBF Clearing Corp., Joe became a NYMEX member and began his trading career. Souhlakis remained as a house trader for MBF Clearing Corp. until January 2007 when he became an independent trader.In January 2008, Joe made the full-time switch from floor trader to electronic trading from home.
Learn more about Souhlakis on his website www.justjoecharts.com or follow him on Twitter @JustJoeCharts.

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