As I mentioned in yesterday's blog, silver has rallied strongly from its June 5 low (where we went long), but gold's rally has been weak. Last week and this week silver has been exceeding its highs from May while gold is still well below its May 25 high of $1307 so we have a bearish divergence signal here until gold breaks that high. Silver is also now approaching a resistance line around $17, and there are some short-term technical signals that could be signaling a significant dip is imminent. Because silver is so volatile, this "dip" could be as much as 9%. There is still a chance that silver started a medium-term cycle on March 20, and if that is the case, we could make a good argument for a correction of that magnitude (9%) now into the final cycle bottom in next week's reversal zone. The alternative (also very possible) scenario would be to see silver rally into next week's reversal zone and then take that correction from a new high. I am going to err on the side of caution here and take profits on my silver long positions today. Even if silver continues to rally into next week, that rally will likely top out then and we can wait for the bottom of the correction to buy again. Selling my long position in silver today.
Because gold is less volatile than silver I am going to hold my long position in gold for now with the same stop loss conditions mentioned in yesterday's blog. If these metals do rally into next week, we will take profits in our gold position then.