Let’s start with the S&P 500. We broke higher earlier this week which broke the left shoulder which negated the head and shoulders top but today’s action means that the newsflow which I have been posting is finally being discounted by the market.
It is not easy but the next two days will tell us a lot about where we are headed. We have some support below here so let’s see what happens over the next two days. A break lower would mean a move down to the 1105 area.
So now onwards to gold and silver which means the charts I posted this morning.
Now for the first two charts, note the spike up in the euro gold price? Despite the spike up in the USD significant buying from European investors is putting a floor under the price of gold.
For those looking to short gold watch how the euro price reacts overnight before the New York fund managers and traders hit their desks. Support for me is at the $1700 area.
Silver got knocked hard which typically happens on a selloff as it has a much higher beta. Support for silver will be in the $32 area.
In both cases mining stocks will get hit and get hit hard. Hate to say it but that will be the buying opportunity I am looking for.
My mining articles will be up next week with a review of earnings. I am watching the stocks I mentioned this morning along with a number of other miners including First Majestic and Silver Wheaton.
Personally, I am either going to be looking for a short opportunity or sitting back in cash and loading up on mining stocks ahead of their seasonal strength.
Patience is key.
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