Lots Lower To Go

A very interesting week that saw markets go into full blow big time correction mode with many gains that took weeks to accumulate wiped out in a single day if you weren’t out prior to it which we were luckily, but just barely.

When markets try to breakout and fail and then drop hard on very heavy volume as they did early this past week it’s rarely a good recipe but news that a debt ceiling extension was being talked about, of course it was, saw markets recover in a huge way. If you didn’t get out of stocks early in the week as I was pounding the table about in my free daily you’d have gotten away with one here.

Stocks erased their early losses and that is rare after a drop with such conviction.  Count your lucky stars.

That said all is not well in the markets from what I’m seeing.

As for gold and silver they are breaking down here and are looking for a good sized move lower now so let’s see what I’m seeing in their charts this weekend.

Gold slid 3.28% for the week and broke it’s head and shoulders pattern Thursday late in the day.

I’m not sure how I never really noticed the large head and shoulders pattern in gold last weekend but it was brought to my attention Monday and sure enough the neckline broke late in the day Thursday which saw myself and members go short.  I just don’t see everything all the time unfortunately and I apologize for that.   It’s a large head and shoulder pattern which points to a move lower by a whole $125.  That would take gold to the $1,175 area which is where we saw a low put in back in very late June.  If we do hit there and perhaps even spike a little lower before snapping back, that would be perfect action as it would put in a great looking double bottom on the weekly chart.

The weekly and monthly charts are much more powerful that the daily as those patterns lead to much longer moves. Friday saw a nice continuation of this move lower so we’re hanging onto our short positions. We don’t have a large position since anything can happen with this news driven market fuelled by news on the debt ceiling. There is no telling where anything can go on news of a deal whether it be short or long-term or a further rejection of a deal.

Silver fell 2.23% for the week and dropped below it’s level at $21.50 where a short could have been initiated.  I did not short it here yet though. Silver doesn’t have a real head and shoulders here but the ugly one it does kind of have would point to the $17.50 area which would also give silver a nice double bottom pattern. Only time will tell if we get double bottoms in gold and silver but for now they are looking to be headed quite a good margin lower.

Platinum fell 1.04% this past week and is still working lower after breaking its large head and shoulders pattern. We don’t need to see an immediate move to its target of $1,300 rather the move can take time just like gold and silvers can now, although gold and silver can move very sharply on the downside once they get going.

For now, look for more downside here with a nice continuation pattern setup here.  The $1,375 area would be the short level but it’s got to hold under there on a closing basis.

Palladium rose 1.88% on the week but still looks set for lower prices. After breaking it’s wedge lower it’s now setup a nice looking bear flag which points to a move lower soon. A move under the $705 area is where you can short it if that is something you’re interested in.  I am not.

Thank you very much for reading and enjoy your long Thanksgiving weekend if you’re up in Canada with family and friends.

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