Disagreements and uncertainty over spending cuts in U.S. government programs are continuing into the sequestration deadline of March 1 (this Friday), and this is causing nervousness in all financial markets right now. This is making it tricky to trade these markets as the uncertainty leads to investor fear which often manifests as volatile movements in prices. Therefore, we need to be especially careful with our trading this week.
It appears that gold is breaking to the upside as expected and prices (intraday) are exceeding last week's high. Silver, however, is not making a new high (yet) which could indicate prices backing down a bit. Because of this and because we are a little cautious about jumping in too soon due to the potential volatility of the sequestration crisis, we will hold off going long for today in both gold and silver.
Volatility is definitely manifesting in the broad stock market. We had been waiting for a strong bearish signal in the S&P 500 to confirm those already given by the DOW and NADAQ. Well, yesterday we got that bearish signal in the S&P, but the DOW negated its bearish signal and turned bullish (the NASDAQ is still bearish). If Congress cannot resolve the sequestration crisis by Friday, I suspect the DOW will turn bearish again and we will probably short sell the market. But we have to wait and see what happens. Still out of the broad stock market for now.