Gold is starting to show some life and the potential for a trend change. The major level of resistance is 1750 April futures. Although we remain short and will stay there until our algorithm turns positive, we are seeing signs of life. We are comfortable being short here but can recognize this could be the start of making a bottom.
The last three days have seen a slow and steady rise while we were expecting a dead-cat bounce short squeeze. Earlier in the week we were aggressive sellers under certain conditions; they didn’t occur. We are still negative but are not willing to be as aggressive to the short side. Like all markets this can change, but for now we are short and waiting.
Silver had a perfect bounce from 25.00 May futures which was the level we identified as the key. We remain short Silver and will not be aggressively selling more. For now, we will maintain the short position watching the price action.
Equities are like the metals, the huge rally which started out as a short squeeze continues to rise and like metals is starting to show signs of a change. This is why we only follow price action and only make decisions at the end of each day. The key is to stay away from the emotional swings during the trading day.