Yesterday we mentioned and explained buying the dip when markets are in uptrends and selling rallies when in a downtrend. The support level we were looking for was 1760 December Gold, the low was 1760.3. Silver was 23.00, the low 23.03, both potential add on buys.
This morning Gold is 13.00 higher and Silver is .55 higher. Remember this doesn’t work as smoothly as it did but understand that is the type of price action you look for when trading. The trend remains higher in Gold, Silver and Platinum which should continue.
The levels to watch on a rally are 1800 December Gold and 24 December Silver. We are not sellers at those levels, we only recognize that some temporary resistance should slow them there. The only selling we would consider when in this uptrend is selling extra futures we may have bought at support. In other words, its part of a trading model.
If Gold and Silver can break out above resistance levels, this rally could extend to much higher levels. Trends can continue for long periods of time but still must be watched one level at a time. Let the price action tell you what to do.
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
Here is Monday’s call Recording and a special recording of the problems we see in the economy: