In last Sunday's blog I wrote : "...both gold and silver are in the last half of their current respective cycles. Prices should therefore be moving lower into a corrective bottom within the next month or two." Gold prices are breaking down severely this week as they have plunged through a strong support zone from $1140 down through $1120. This means that prices will likely continue lower into the end of the month although we may get a small corrective relief rally this week or next that could be a good spot to sell short. Silver is falling too, but not as dramatically as gold, and prices are approaching our target area around $15 for a possible bounce. That could happen this week or next, and there is an even greater chance of a relief rally here that could be sharp. I feel the best trading strategy now is to try and sell short the top of any relief rally in silver (and possibly gold) for the final plunge to the medium-term cycle bottoms in both metals which could be in the last week off this month or sometime in December. Further support for this bearish view of the precious metals now is coming from the gold and silver mining company stock indices HUI and XAU. Both recently turned 100% bearish. As I've mentioned before in my blogs, these stocks often lead the prices of the metals themselves. On the sidelines of both gold and silver for now.
Brief Update on the Broad Stock Market:
It was very frustrating to bail out of our short positions yesterday with no profit and some loss; however, we may soon get a chance to recoup that loss and more. The recent technical signals for a short-term surge in equities are dying down, and we may yet see the subcycle correction that we had been expecting last week. Stay tuned for more information. On the sidelines of this market for now.