Gold, Silver and Platinum traders are experiencing the big chop which means they are churning between two levels trying to breakout. Gold is stuck between 1760 and 1800 based on August futures. Silver between 25.5 and 26.5 September futures and October Platinum 1050-1150.

This morning all three are higher. Can the rally hold? No one knows that answer with 100% certainty, but based on the pattern we would say the answer is no. From a trading position the correct side is to sell the rally however when markets are rangebound it is best to wait for the breakout in either direction.

We are trend traders and are always in the markets long or short, presently we are short Gold and Silver. Expectations are a break to the downside. When analyzing the pattern, we know the trend is lower and that this congestion period suggests a break to the downside.

With the prevailing trend lower, this price action is a rest stop before a continuation of the downtrend. Remember, there are no guarantees but we know the current trend and will remain short until this pattern changes.

Patience, discipline, and money management always win the day.

Todd Horwitz Chief Strategist BubbaTrading.com
Stop being a prophet and make profits


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