Wednesday saw another weak attempt at a rally in the metals. By the end of the day Gold was slightly higher, Platinum flat and Silver lower on the day. All three are setting up for a much bigger move which should be lower based on the current price action and trend.
As the ranges tighten in metals the power builds for the next big move. The longer and tighter the congestion pattern lasts the bigger the next move will be. The probability is 90% lower, 10% higher. Either way we will be prepared based on the price action which will show indications before the move happens.
As we have mentioned in the past, we will never buy the bottom or sell the top. Our models are trying to grab the meat out of all moves. Although we are bearish it doesn’t mean that the pattern won’t change, but based on the current action we are prepared for lower.