Ignored us now face the consequences

12 de mar. de 2018

In short our additional full net short size in both of our precious metals is well justified from the reward and risk perspective at the time of writing this article/idea

In our previous post we already mentioned many times that friday's session can be volatile and very tricky to predict and could affect gold and silver prices in short term and that seems to be the case for silver,The white metal declined at the start of the session but quickly erased all the downswing from it's initial low,we already mentioned that white metal could reach to about 16.600 and this level has already reached but the real question is silver about take a big decline same as in lat dec 2017?

yes,that's very probable but here is a twist decline may not start immediately it can take some days to start,if you try to look at the lack of a visible rally in friday and compare it with proximity of the triangle apex reversal you will get your answer,in short we still may see a small rally in white metal in about 3-4 days before it plunges back

we were and still are in a situation where white metal metal could decline sharply immediately or it could go up just a bit and then decline anyway.we don't think waiting for better prices in gold and silver will be an informed decision ,That's why we decided to increase our net short size in our portfolio management.
in our last post we wrote which is still up to date

In friday's intrday follow up,silver moved higher than its target level but gold didn't,it served a strong bearish sign as it was clear that silver is outperforming gold in a dramatic manner in short term,most of the time it helps to make big decline in white metal.
session seems very similar to the mentioned nov 1 2017 session and implications therfore are bearish anyway

mining stocks reversal-gold mining stocks moved much lower after the closing bell,thing to note is despite the rally and strength in S&P 500 It moved lower,really miners only had the strength for the intial rally,Before the closing bell bears had took control over the miners and bulls were exhausted,
It's not happen very often when HUI index,miners and precious metals all generating the same signal,in short if you try to look at mining stock and precious metals it seems very likely that we are going to see big decline soon,only currency market is not cofirming our view at this point so it might postpone the decline for short term.

Imagine the gold without usd
you can't na? so let's jump right into our usd index the biggest factor which determines the prices of precious metals in near term,in our previous post we told that USD index was above its strong support level and big picture is remained bullish,USD index didn't even touched its support level but instead it moved higher,so did usd index already made its final bottom?

Still as a portfolio manager/ trader we try to think without being attached to our current position so we could form a unbiased perspective on precious metal market

what could go wrong-Breakdown below the 89.300 level will complete a short term head and shoulders pattern and this pushes prices down to feb low,it will means that 87.600 will be the next target but is it possible? in trading anything can but the probability is much-much lower as the multiple long term resistance level are present around the jan and feb low,on a short term head and shoulders pattern and this pushes prices down to feb low,on a short term basis a move below 89.300 can precide a quick decline to about 88.70,well this is a less likely outcome,the most probable outcome will be that we could see a rally above 91.20 which will precides a big rally to almost 94,this will be a very critical sign that small breakdown is invalidated below the very long term declining resistance

overall our full net short position is justified at the time of publishing this article