Stocks Wile Precious Metals Set Up Nicely

Another very choppy week for stocks, which are quite oversold. Nonetheless, stocks began to show the needed bounce Thursday, which motivated me to get long a few stocks. However, Friday’s action forced me to sustain a few small losses.

The stock market continues to act poorly…showing no direction, rhyme or reason to its actions. Unfortunately, there isn’t much we can do about it.

The metals continued to consolidate as they setup for breakouts higher -- expected to come as early as late next week.

Gold gained 1.98% as it chops around – and looks to finish the handle part of the Cup&Handle pattern in formation.

The $1,300 area remains the breakout of this very powerful Cup&Handle pattern. In any case at least a few more days of consolidation is best first to really form a reliable handle.

Silver gained 1.10% as it also continues to setup a powerful Cup&Handle pattern. $17.75 is the breakout area if we can complete this pattern with a sideways handle for a few more days to a week or so.

We do need to see large volume accompanying these potential coming breakouts. Otherwise, chances are they will quickly fail. It’s not ideal to see failed breakouts as we saw on the Fed news this past week.  Nonetheless, metals often move strongly on Fed news…but it rarely lasts…so I’m dismissing it a bit.

Platinum fell 2.31% this past week after being stopped at the downtrend line. Looks like we may see an undercut of the $960 support area down to the 200-day moving average at $940, which would form a double bottom if it holds.

As always platinum will follow gold. Therefore, we need to see volume strength there for a potential double bottom to work.

Palladium lost 1.75% on the week and looks set to move lower now. We may see a break to the $510 area to give us a double bottom.  It is imperative to remember that palladium historically follows gold and silver.

In general things remain very choppy and dangerous in terms of stocks, while precious metals seem to be setting up well for higher per the gold and silver charts.

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