Once again Tuesday gold, silver and platinum demonstrated that trouble lies ahead for the precious metals. They were trying to rally and failed miserably. The price action suggests that the metals are headed lower.
Market failures happen regularly and are then defined at what degree of weakness they are showing. Gold and silver’s failures over the past few days suggests a much bigger sell off. Until further notice, we will aggressively sell rallies that reach resistance levels.
Looking at the price levels, the levels are as follows: Gold resistance 1920 and the next big support is 1850, Silver resistance is 24.00 with support at 23.00 and Platinum resistance is 950 with support at 890. We remain short and are aggressive sellers until this pattern changes.
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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