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Both gold and silver are in a very precarious position. Thursday and Friday made a potential upside reversal after they undercut the Sept lows. A break to new lows could lead to a waterfall decline over the short term. I noted a similar instance in stocks in early August as the S&P 500 broke its neckline on a head and shoulders top formation. Both in that case and in this one, the markets feel oversold and the daily oscillators are oversold. But from a chart pattern tendency, a break to new lows could actually lead to an INCREASED selling wave, similar to the swoon in stocks this past August.
So to be clear, as long as these markets remain above this past week's lows, that is bullish. However, a break below there should be considered a sell, a would even be valid for a new short entry with a stop above whatever rebound high is made prior to that break down.
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