Gold and silver have been moving sideways for weeks. If you put them on a heart monitor, they would be declared dead. We know from experience a much bigger mover is coming, but we don’t know the direction. Based on our algorithm and trading positions, we expect the move to be lower.
Although our expectations are for a selloff, there are no guarantees. There are a few factual things we know that will happen over time. Gold, Silver, and Platinum will eventually go higher, values will rise. However, in the next day, week, or month the signs suggest lower.
The current price action is the most challenging for traders. The narrowing pattern will lead to a much bigger move which can be in either direction. We will hold our short positions but will not add to them. The current trading environment suggests, passive, disciplined trading until the metals commit to the next move.
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
Stop being a prophet and make profits
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