Equities and Gold Rally. The rally was no surprise, 6 ugly days in a row usually leads to a vicious short covering rally. By Todd Horwitz, Bubba Trading

 

2018-02-13

Equities and Gold Rally

VIEW video: Rip Your Face Off Rally. We’ve a lot of debt and a lot of issues that nobody wants to talk about.

Monday equities had what’s known in the business as a rip your face off rally, exploding almost 500 points. The rally was no surprise, 6 ugly days in a row usually leads to a vicious short covering rally. That’s exactly what we got, a short squeeze in a market that has topped.

Gold also had a nice rally on Monday, not as powerful as equities but certainly based on the same short covering set up. After making highs at 1365, gold has fallen on hard times and had been down 9 out of the last 14 days. A short covering rally was imminent and there it was Monday.

The rally in gold is continuing Tuesday while the equities are under a little pressure. The common thread here is volume, both rallies are on declining volume. Indications are both have more room on the downside, we believe gold is a lot closer to a buyable bottom than equities. Look for support in gold at 1300 and equites to have a much deeper selloff

Todd Horwitz
Chief Strategist
BubbaTrading.com

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