Gold and silver have both been testing their supports over the last two weeks and there are some signs appearing now pointing to the possibility of prices breaking lower, especially in the silver charts. Short-term bullish and bearish signals are mixed at the moment for both metals. One factor that concerns me right now is the recent appearance of strong bearish signals in many gold and silver mining company stocks charts. As I've mentioned before on the site, precious metal mining company stocks often lead the price of the metals themselves, so this could be a bearish sign (at least short-term). Based on this information, I am going to sell my long position in silver today but maintain my long gold position. This is a small loss in our silver trade as we bought it close to $20 and is considered prudent now because silver is more volatile than gold and could suffer greater loss should the metals break lower. Note that we are short-term trading here and the overall long-term bullish picture for gold and silver is still intact. Once the bottom of the long-term cycles in these metals is established (before the end of the year), we will be strongly bullish in both gold and silver.
The broad stock market has been falling and the DOW has now broken below the support level I mentioned in my last blog (15,540 - 15,570). Momentum, however, remains bullish, and there are also some technical indicators now suggesting a midweek reversal. If the market can turn up from here and break back through that support level (now resistance) by the end of the week, I will consider going long for a possible rally into the end of August before a significant correction. If prices continue lower, we may be seeing that major correction starting early. Remaining on the sidelines for now.
Crude oil prices are holding above $104 and momentum remains bullish so I am holding my long position in this market. Traders who bought late in the day yesterday were able to get in at a better price than opening traders and are closer to the stop loss area ($103 - $104). Note that this market is paralleling the broad stock market right now (both falling) so a turn up in one could signal a turn up in the other.