Gold and Silver Rally Put Down. This type of trading action is common when a market is getting ready to make a much bigger move. By Todd Horwitz, Bubba Trading

 


On Wednesday both Gold and Silver tried to breakout to the next levels. Both were cruising along trading above their resistance levels but once again the rallies appear to have been put down. This morning both are trading back below those levels.

This type of trading action is common when a market is getting ready to make a much bigger move, a couple of false breakouts followed by a return to the top or bottom of the range. In the case of the metals both are trying to breakout to the upside, we are expecting a test of the bottoms, 1280-1290.

As we often write the consolidation is the time of most confusion forcing traders and investors to make bad decisions as they try to catch the move before it confirms. This time is not different and as traders we will stay short until we have proof that they are breaking out to the upside. As investors we will hold our long positions because investors should not be trading, the are investing

Todd Horwitz
Chief Strategist
BubbaTrading.com

Financial Markets and Political Commentary
 

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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.