Gold and Silver look to test the support levels once again. Wednesday saw a nice rally, however there was no volume to support it. All signs point to lower prices once again and our levels of 1900 Gold and 24.5 Silver are in play.
There is a new level of support being built at 1925 Gold and 24.9 Silver. The key here – will they hold? The biggest concern is the true lack of interest, no volume, and bad policies. As traders it’s difficult to carry too big of a position is this environment, too many questions.
We remain short, looking for lower prices and the action that comes from the support levels. In this environment, it is hard to commit too much risk. Thin markets are dangerous and can be pushed hard in either direction with less money than when there is normal trade. Caution is the best trade until volume returns
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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