False Strength

Markets were acting decent after the Federal Reserve came out last Wednesday and said nothing new.

Some stocks are still doing fine. Consequently, I did do some buying in last week, but I’m not heavy by any means.

We’ve seen dips bought and rallies sold for some time now.  To be sure I’d certainly expect that type of action this summer…so it should be an easy summer to take some time off.

Nevertheless, if markets do begin to move with heavy volume, I’ll be focused and heavy into stocks.

Gold was just about to roll over…but then rallied well Thursday. However, the shiny yellow is up against formidable resistance. Moreover, many of these sharp moves higher have been met with selling…so I have to look for the same this time.

Gold gained 1.63% last week…but it all came on Thursday. As often happens, which is evidenced by the gaps on the GLD chart, gold moved in overseas action Thursday.

Gold is up against strong resistance at $1,210 and $1,220, which it hasn’t been able to best since February.

The dominant trend remains lower -- and only a move above $1,220 on extraordinarily high volume would change the chart in that manner.

Gold can be shorted into strength, or on a break under $1,190.

Silver gained 0.78% this past week…but looks very weak. Silver has formed a bear flag pattern…and is acting much weaker than gold, having closed near the lows after a strong start on Thursday.

Last Friday saw silver roll back to the low end of this bear flag. Moreover, the white metal looks ready to break the $15.90 area, which could be shorted.

Summer is here…and the metals look weak. As I mentioned last weekend, a move much lower would be most constructive for the chart…and actually allow the metals to setup to move higher over time, since the charts are not at all setup to allow gold and silver to move up from here.

Platinum lost 0.90% this past week…and is breaking below the small channel it had built over the prior two weeks. There remains not too much support between here and $900, but that doesn’t mean it will be a quick move to that level. There will be lots of bouncing around, but until the $900 area is hit, the dominant trend is most likely to remain down.

Palladium lost 3.98% and is breaking hard now after falling under the major support level at $725, which now converts to a resistance level.

The next major support area remains at $550. It appears we may be able to get there by the end of the year at this rate…but that is not a prediction, just a feeling.

I don’t predict, I just regurgitate what the charts tell me…and they are right a very high percentage of the time.

I will be away next weekend so there will be no letter…and I doubt I’ll put one out on the July 4th weekend unless there are some very special moves in the metals.

Thank you very much for reading and you can find out more about what I do for members as we focus on leading stocks for the most part at http://wizzentrading.com

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