Metals Need A RestMonday February 15, 2016 14:25
Markets and stocks continue to be very choppy and are showing gap opens both lower, and higher, so holding any trades overnight is not the ideal situation.
It is not the ideal trading market right now so I remain mostly in cash, but we should get some trades setting up later in the week ahead, once this current oversold condition is worked off.
The metals took off higher and should now be done of their runs, and the recent strength is not so great, so let’s see why.
Gold gained 5.49% this past week in strong action, the like we haven’t seen in years.
I’d have really preferred to see more of a rest in gold near $1,190 and $1,200 but it just ripped higher on strong volume.
I’d look for a move back to $1,200 now since this strength cannot last in a sustained way.
Moves have to be more like 2 steps forward and 1 step back, not straight up as we’ve seen.
So, while this current breakout isn’t sustainable, we see if we can move back to $1,200 and hold that area and then setup for higher.
But, this is quite possibly going to turn out to have been a failed breakout since it didn’t build a solid platform to run from.
Time will tell.
Silver gained 5.05% this past week in strong action and is now at an area I’d really like to see it consolidate.
So, silver is looking to setup a nice cup and handle, while gold has blown that chance so we are getting mixed messages again.
Let’s just see if silver can indeed setup a handle now and if gold can put in some type of bull flag or base above the $1,200 or $1,190 areas.
I understand I am not giving clear signals but I am not getting clear signals and that’s just the way it is sometimes.
Platinum gained a solid 4.85% over the last week and is backing away from the 200 day average and horizontal resistance at $980.
Let’s see if it can consolidate and build a bull flag above $940 or if we correct back to the strong support area at $900.
Nice action for sure but a rest is due.
Palladium gained 3.76% this past week and looks to have more upside in its near future.
Palladium looks set to move to $550 but may not if gold and silver spend the next week or so resting.
So, we’ve really got a mixed bag with stocks looking to bounce or consolidate to work off the oversold condition, while metals look set to consolidate but palladium may have a little upside over the next few days before it consolidates.
2016 remains very tricky and I’m just swing trading when we get decent signals and trying the odd day-trade, but those day-trades have not been working so great.
Cautious trading remains the theme, or just sitting in cash.
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