In the words of Dolly Parton “Here We Go Again.” Gold and silver can’t seem to gain traction. Just a couple of days ago they were on fire and looked ready to run. They had a false breakout to the upside which took away a strong bullish sentiment.
Now, gold and silver struggle to hang on to their uptrend. Basically, they have fallen daily since. From Monday’s high gold is down almost 100.00 and silver over 2.00; they have gone from bullish to hanging on to major support.
We remain long but understand that a lower close today could create a sell signal. It’s 8:00 am EST, Gold is down 12.00 and silver down .28. Obviously, this has not been a pretty picture for the metals. Price action has been awful and has failed every test the past 4 days. We will trade as they are uncomfortably long at this moment.
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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