Gold and Silver continue to churn around the mean. The pattern is compressing, indicating a much bigger move is coming. As we look at the charts, Gold support is 1900 and resistance 1950, Silver support 24.5 resistance 26.00. We are short and expect them to hit support, however at this point we would not be surprised at any move.
Platinum has once again become the weak link in the precious metals chain; 1000 appears to be the major support level. Although we no longer actively trade Platinum, we are physical buyers even in the current downtrend. When buying, physical levels are much less important because of the holding period.
Almost all markets are miserably slow and lack volume. This type of action always makes trading tougher and skews the risk reward model. When markets are dull you are better off sitting on the sidelines waiting for trades instead of forcing them. Although I carry positions in 29 markets daily, my active trading has come to a halt. There are times it pays to be patient, this is one of them.
Precious metals should be owned on a physical basis with capital that is not needed tomorrow or anytime soon. Trading should be done with paper knowing that we can trade either side without emotions.
In all markets price action determines what will happen in the next day, week, or months. Keep the two strategies separate, the worst trade anyone can make is turning a trade into an investment hoping for a way out. Traders must learn to take their losses and move on to the next trade.
Patience, discipline, and money management always win the day. Let the map of the markets show you the way.
Todd Horwitz Chief Strategist BubbaTrading.com
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