Analytical Charts - Jim Wyckoff
Gold and silver, the trading range narrows
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Markets remain quiet and dull while the trading ranges tighten. The tighter the ranges become, the bigger the next move will be. Along with gold and silver, equities narrow as well. The lack of volume and volatility suggests that a big move in all markets comes closer.
Most commodities are in the same pattern, which on the surface suggests nothing is happening. However, this type of price action will bring huge moves, creating a trend that should last for an extended period. This is common in all markets.
The direction of these moves has not been decided. Currently, we are short metals, long equities and soft commodities. Our assumption is the current trends will continue and the moves will be in those directions. We don’t predict the direction; we follow our algorithm. Either way, we will participate in the bulk of the next big move.
Precious metals should be owned on a physical basis with capital that is not needed tomorrow or anytime soon. Trading should be done with paper knowing that we can trade either side without emotions.
In all markets, price action determines what will happen in the next day, week, or month. Keep the two strategies separate. The worst trade anyone can make is turning a trade into an investment hoping for a way out. Traders must learn to take their losses and move on to the next trade.
Patience, discipline, and money management always win the day. Let the map of the markets show you the way.
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