Full disclosure: We are long Silver on a 30 day unleveraged hold.
This is a momentum traders alert.
It's All About Rhythm Now
We'd hope that the market moves sideways for the evening to give volatility a chance to properly inhale. Otherwise, if we do power through the upper end of this area and breach $1355 too soon on a settlement basis, we could be setting ourselves up for a corrective wash on a retest of the same zone going down. Gold has a nice rhythm to it now, and we'd like ot see it not get overextended, especially when so much of this flow may not be physically related.
Keep your powder dry if you are trading. Buy dips, but do not forget to sell rallies. We're just long Silver on a monthly signal.
First time we've touched the bottom of an hourly band since $1332 spot
FWIW - Last night we wanted gold to take a breather in its rally. That did not happen.
The result for us was an inability to "buy" into this morning's rally even though it may have been the beginning of a bigger move.
But now we see potential trouble. Right now Gold for December delivery is still comfortable above recent rally negation levels, but we just want this out there to anyone on the fence about taking profits.
An hourly close below $1348.00 after 9am alerts us to a correction of another $15 to $30. Only if we break below and back above (pick a time frame) will more short covering possibly reenter.
Basis for our concern lies in how the 4 hour spot chart didn't get much time to breathe.
Below $1348 and Gold could fall out of a bunk bed. A dip to buy for investors. A dip to sell for algos and momentum longs.
Be careful
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