Wednesday the pressure remained on gold, silver, and platinum. For now, the precious metals are ugly and appear to be headed to support levels. There may be many reasons to be bullish metals but price action trumps all. Price always tells the real story no matter what our opinions are.
When trading markets you must understand that information you see today is almost always priced into the markets. In a hi-tech world the flow of information is gathered up by the funds and firms long before it is reported. Market expectations shows the road map.
The bullish case for metals played out and ended about two weeks ago, which we can see from the bearish action now. Remember markets are always right, opinions seldom are. Those who trade and can be nimble, take their losses when wrong will survive. Those that continue to fight the action will lose and wonder why they lost.
Until something changes, gold, silver, and platinum are in bearish patterns and headed to major support levels. The price action supports lower prices. Remember investors hold and traders trade.
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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