Markets are always bringing new challenges or so it appears. The bottom line: the patterns continue to repeat from different levels. At the end of the day, all charts are the same, patterns repeat, and all big moves must start in the shortest time frame.

Gold and Silver are no different; today the patterns look ugly bringing 1800 in play for Gold and 21 for Silver. Obviously that pattern can change but until further notice the trend is lower, the correct side of the trading market is short. Miners have been getting crushed which are all bearish signs.

We expect to see a rally in the next day or two which will be a selling opportunity as traders. The price action has no effect on physical holdings because we aren’t trading inventory, we trade paper. You must always keep in mind the end goal of the trade or the investment.

We remind you that the action is bearish, we are short and willing to sell more. You can make a case for either side, but the trend is currently lower. Gold has a new range and a key level to watch. The range is 1800 – 1900 and the key level to watch is 1850.

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
Stop being a prophet and make profits