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Don't panic as... Silver pops & drops.. Print
Written by Site admin   
Sunday, 02 February 2020 09:16

Markets morph

Nothing stands still for long in the trading world. Charts are continually morphing from one image to another and on and on.

Whilst the previous chart developed nicely last Thursday, by this Monday it was something quite different.

Chartfeb2

False Break Out.

By late Sunday, fund managers and traders had been sweating over the weekend. Just how serious was the Coronavirus crisis?

The pent up emotion spilled over with a gap up when the Gold and Silver markets opened. There are several types of gap and the key to which way to trade them depends on several features which will be the topic of a new Traders Class members video.

As can be seen, there was no follow through upwards. Exactly the opposite happened and those who traded the move from last Thursday & Friday closed the trade for a reasonable profit.

Where to now?

Fundamentally, the crisis hasn't worsened despite the headlines and doesn't warrant panic. Also, the US dollar has strengthened rapidly  and that makes holding precious metals unattractive.

Technically, the false break higher, above 'b', and then the break below 'c', have morphed into an 'Expanded Flat'. The longer term bullish pattern is unchanged. We just have to be patient and wait for the expanded flat correction to work through.

 

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