As we remain short Gold and Silver it appears the miners may be sending a message that there is strength in these precious metals. For weeks, gold and silver have been in a downtrend, trading near their key support levels.
While the physical metals have struggled, miners like GDX, NEM, AG and the leveraged ETF NUGT have been rallying or holding in uptrends. Either the physical metals will find a bottom and rally, or the miners will find a top and sell off.
This type of action is always interesting and eventually will resolve. However, we don’t know where or when they will resolve, nor do we know in which direction. All markets are in interesting times, light volume with contradictory trading. We will always stay the course of the trends and algorithm, the market will direct us.
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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