Silver Is Now Leading Gold Lower

A tricky week that I did not handle well. I’m still trading very, very light.  But it seemed most of what I tried didn’t work…and I ended the week down, which does happen sometimes.

I’m not perfect and never profess to be. But I do pretty well most of the time.

Anyhow, I’m trading small and even smaller until I get my rhythm back.  But markets are at a wall of resistance -- and they are struggling to move past it for now.  Normally I’d have taken a short position in anticipation of a move lower…but not the way my luck has gone this past week.

As for metals, they were setting up well for a breakout higher all week until Friday when they broke support solidly.  So let’s take a look at the charts and get a feel for support areas and what to look for next.

One housekeeping note though. While I did have a bit of a tough week, we’ve had a few really nice weeks prior to this and my real-time service is open now for a few more days and is only $100 a month until the middle of June.  You will learn a lot and make some good profits along the way.

You can find out more at www.wizzentrading.com

Gold lost a hefty 3.82% this past week after breaking the 200-day moving average hard Friday.

All week we were setting up a great descending channel that was set to break higher. But subscribers had the obvious caveat that a break below the 200-day moving average would be a sell signal, which would declare invalid the bullish pattern.

Friday saw heavy volume pushing gold lower and it’s already at the 50-day moving average support level which should hold for at least a few days. From here to $1,220 is a support area and all we can do is wait to see what comes next.

It’s never a positive sign to break a bullish pattern. Therefore, silver is telling us gold has further to fall. A move under $1,220 will see me bring back talk of a move down to $1,000. Below $1,220 support sits at $1,200 $1,180 then $1,160.

It’s hard to say much else right now until we get a few more days of trading to form something on the charts. Nonetheless, lower looks to be a fairly safe call.

Silver lost 3.25% last week but mostly on Friday. I kept talking to subscribers all week about the strange divergences between gold and silver. Usually their charts match up pretty well but silver had a decidedly bearish chart while gold had a bullish chart and this was confusing.

Gold had been leading…so I weighed in gold’s favour and remained bullish and even took a small long position in a miner ETF as it broke out Thursday.  However, the ETF opened with a gap lower Friday, which forced me take my losses quickly before they grew…and they certainly would have.

So, it looks like silver is now leading gold once again and it is pointing to lower prices. This slanting head and shoulders has now broken and points to a test of $15 in short order so gold is likely to follow and move back to test $1,180 once again. There is some support every $0.50 below for silver until $15 but the power of this break tells me we shouldn’t take too long to hit $15.

Platinum lost 1.54% over the last week and is just now breaking its slanting head and shoulders pattern which points to a test of $1,125 shortly. Maybe a week or 2 tops before we see this low and then we see what forms next but the monthly chart is quite bearish and still points to a move to $800.

It’s too bad the metals have rolled back to a negative outlook so quickly…but it happens and all we can do is adapt.

This game is not about being right, it’s about making money so I have to change my view as prices and action dictates.

Palladium was the sole standout and gained 1.32% for the week.

That said, this triangle does point to lower prices -- and with the other metals weak, palladium won’t have a snowballs chance in Tahiti.  A break above $800 would be very positive but chances are much higher that we break the uptrend line around $780 and move back to $740.

********           

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

In my free, nearly weekly newsletter I include many links and charts which cannot always be viewed through sites which publish my work.  If you are having difficulties viewing them please sign up in the right margin for free at http://www.wizzentrading.com or send an email to [email protected] with “subscribe” as the subject and receive the newsletter directly in your inbox, links and all.  If you would like to subscribe and see what my portfolio consists of please see here.

If you found this information useful, or informative please pass it on to your friends or family. 

Free Service

The free weekly newsletter “Wizzen Trading” does not purport to be a financial recommendation service, nor do we profess to be a professional advisement service.  Any action taken as a result of reading “Wizzen Trading” is solely the responsibility of the reader.  We recommend seeking professional financial advice and performing your own due diligence before acting on any information received through “Wizzen Trading.”