There is a short-selling opportunity right now in gold. The most opportune selling price would have been exactly at the 78.6% retracement from the high of 942.16 at 931.50. Since we cannot call our brokers and request a fill at 931.50, we can still settle upon an entry at an estimated price of 909 or better. At this price, our stop loss would be adjusted to 931.50, which was our best opportunity fill price on this trade. There are two profit objectives in sight-one at 876.50 (127.2%) and two at 861.6 (161.8%) extensions.

There is significance at the 876.50 level, if we look for an overall retracement from the most recent significant low. When drawing the Fibonacci line from the previous significant low to the most recent significant high, the retracement at 78.6% is 873.7. This is approximately 2.80 off from the 127.2% (876.50) extension that I referenced in the previous paragraph. This provides a double confirmation, and a higher probability that we will see the market somewhere in that price.

In conclusion, I am pressed for time in writing this commentary or I would provide a few more outlooks to consider. I have a suggestion to sell short April '08 gold at 909, or better with a stop at 931.50. The reward/risk ratio on this trade is a small 1.50:1, because we had already missed our best possible entry at 931.50. That would have afforded us a nice 22.00 profit so far, and a reward/risk ratio of 3.3:1. I like this trade and the risk on it is not that bad.