Thursday saw a dramatic reversal in gold and platinum with a marginal reversal in silver. As we look at the price action, we can conclude that they will continue to trend lower and rallies to resistance should still be sold.

The deadcat bounce was nothing more than giving the chance for the bears to have another selling opportunity. We would be sellers of platinum at 900, silver at 19, and gold at 1740. Other than a weak rally nothing has changed, the metals are still weak.

Too many try to make cases for the precious metals whatever they happen to be. First, we must remember that the precious metals are the same as any market; there are bull and bear markets. We suspect that the selling will resume in force and the manipulation criers will be out in force.

Investors in gold, silver, and platinum is the constant whining when they sell off. However, as we stated earlier, they are all a market that takes a buyer and seller to complete a transaction. If metals investors and traders would understand markets better, they would recognize the trend.

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
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