We're looking for the target at 1677.2 on the NYSE-Liffe mini gold, the YG contract. This target is interesting for a couple of reasons. First, it's derived from the last swing into the low, 12/21 - 12/29 multiplied by a target factor of 1.272 and projected upwards. Targets calculated from reversal points, the 12/29 low, often terminate a move if the move was a correction of a larger trend. This makes the target an important spot since it may also serve to terminate the rally and present another leg down.

Here’s the 45 minute chart:

Click on image to enlarge!

The other issue is that yesterday and today shows timing resistance. The red trendlines show how this was calculated. The number of bars in prior rallies are multiplied by key Fibonacci ratios and projected from 12/29. If the pattern is going to continue, the timing work indicates that we should see this rally terminate too. Take the target seriously. If trading intraday I’d look for an exit. Longer term gold related positions call for tight stops at the very least. We don’t necessarily want to close all positions since if this continues to rally through price and time, an “overbalance” would likely lead to an upside acceleration since the pattern would be disrupted.

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