Traders like to see action in markets knowing the more they move the bigger the opportunity. The trade in Gold and Silver has been dead with virtually nothing to do. This type of action haunts traders, compressing markets always lead to one thing, a huge breakout in either direction.

With our algorithms short, Silver and Platinum taking out their flash crash lows, we expect Gold to follow suit taking out their flash crash lows. Remember, the compression in the metals which has led to lousy trade can break out in either direction.

Looking at the rest of the markets, there is no reason to believe the metals are ready to rally and break to the upside. All signs point down and a continued downtrend. Investors should ignore all of this, there is no such thing as an active investor.

Trading follows one set of rules and investing follows a completely different set. Those who mix the two are doomed to fail. We are short as traders but buyers as investors. The time to trade is completely different; if you trade and invest, you will always be long physical metals while being long or short the futures.

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
Stop being a prophet and make profits

Here is the registration for Monday’s Call October 11th:

Monday Call Registration October 11th 4:30 EDT