For the past few weeks Gold and Silver have struggled to move in either direction. In other words, they are buried deep in consolidation. This pattern is the most frustrating for traders, congestion is also known as the time of grease uncertainty.
We remain short both looking for a test of at least 1900 Gold and 24 Silver. There is a real possibility that Gold and Silver break below those levels. However, the formation is challenging, and the metals can go either way from here.
Looking at markets, there is no volume, no volatility, and no real interest. The overwhelming complacency being seen in all markets is sure to lead to an equity meltdown. As far as metals, they can go either way from here but the short-term bias is lower.
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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