To save time I won't go in to a six month analysis for gold but I did want to include it today since the last two sessions look like they could be significant with respect to the near-term trend.


  1. These two candle are nearly textbook examples of the formation of an Evening Star. An Evening Star is by definition a three candle pattern so of course this one is incomplete at the moment. The first candle is a long white (green) real body candle followed by a narrow body candle that gaps above the first candle to form a 'star.' The completion of the pattern occurs on the third day in the form of a black (red) candle that closes well into the real body of the first candle. If the middle candle were a Doji then the pattern is known as a Evening Doji Star. Either way this is a bearish reversal pattern. That it is forming at a level of potential resistance which includes the psychological level of $1,700/Oz. as well as where the market dropped to in the dramatic selloff on Feb 29 (point A) and failed to reclaim on March 26th and 27th (point B) adds weight to the potential signal.


How I would trade this would be to watch the price action tomorrow. If gold opens more or less flat on the session and sells off throughout the day I would then look to see if an Evening Star was forming. For the more risk tolerant trader you could take a short position in the late afternoon if it seemed rather clear that gold was going to complete the Evening Star pattern and close well into the body of the first of the three candles. If it appeared gold was going to close below the $1,670 to $1,675 range the probability increases that this was a near-term top in gold's advance as this would complete the Evening Star. For anyone not already in gold and looking to go long, sans a Bullish Belthold Line tomorrow I would wait another day to see what the price action tells us.