After the recent uptrend, the gold market has met stiff resistance above $1,000 an ounce and has traded its way into a head-and-shoulders reversal pattern. With the top of the head around $1,010 and the neckline near $890, a head-and-shoulders reversal projects a move down to $770 in the COMEX June gold futures contract.

Price action on Wednesday, April 8, 2009, illustrates the market’s tendency to retest the breakdown level at $890 before continuing lower. The 9-day exponential moving average just above $900 will also bring further selling resistance on short-term rallies. Daily stochastic readings indicate that short-term moves may push higher, while the trending Moving Average Convergence/Divergence (MACD) indicator is pointing toward a continuation of the downtrend.

This technical information, combined with diminishing inflationary concerns, should keep gold under pressure in the near term.I recommend traders can look to sell rallies above $890, risking to $902.My initial objective is $835.

Below is the daily chart for the June 2009 gold futures.


Mike Marshall is a Market Strategist with Lind Plus, Lind-Waldock’s broker-assisted division. He can be reached at 800-437-4189 or via email at

Past performance is not necessarily indicative of future trading results. Trading advice is based on information taken from trade and statistical services and other sources which Lind-Waldock believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder.

You can hear market commentary from Lind-Waldock market strategists through our weekly Lind Plus Markets on the Move webinars, as well as online seminars on other topics of interest to traders. These interactive, live webinars are free to attend. Go to to sign up. Lind-Waldock also offers other educational resources to help your learn more about futures trading, including free simulated trading. Visit

Futures trading involves substantial risk of loss and may not be suitable for all investors. 2008 MF Global Ltd. All Rights Reserved. Futures Brokers, Commodity Brokers and Online Futures Trading. 141 West Jackson Boulevard, Suite 1400-A, Chicago, IL 60604.