What Happens To Gold And Silver Next? Look Out Below?

At one time I was paying melt for junk at one LCS. I had another that would buy at melt and sell for a premium. I could buy at one and sell to the other and make a few bucks if I timed things right.

Boy where do I start-,,, well how about we roll back the clock and go back in time.

looking at last week, we can see that silver and gold have steadily been bought up. It has filled the 2nd gap and didnt give up its gains. Some of you have mentioned volume, which yes, I wouldn't say its great, because if you look the sell side volume was much heavier. HOWEVER, it isn't anemic volume either. If I was looking for volume however, I'd like to see a big massive day with at least 4-5 times the average volume. Nevertheless, the price action has been telling and it has moved higher. As I always say and do, I dont short rallies.

So we know its been bought up, and theres some positive volume. But now, the big question is, does this stick?

Well lets move forward. One biggie looming ahead are the gaps from way back in April. Now those will be telling to see how they are dealt with because there was a ton of selling there.

Lets turn to our proxies for that-

SLV- the big issue is what happens as price enters the same area of the first gap down,,,, right now silver is inside the gap. Is it going to fill it, close and chop above it? IF silver can do that, then I would think thats the start of a possible start of silver clawing itself out of the basement its been and getting out of the downtrend.

So using our proxies, look to see if this gap can be filled, which is 25.17. Thats key and will be telling.

That said, I still remain very skeptical that everything is fixed and silver is ready to run higher. Am I saying this to be on the contrary? Am I on purpose refusing to give silver its due? No, simply, after all the technical damage in price that has occurred and in my experience, such heavy selling that happened means a lot of buying and sustained buying to keep it up and going. Is it possible? Yes, most certainly. But I would be careful of thinking we have an "all clear.".

So again, lets watch how it deals with the 4/15 gap. Thats a major part of this puzzle.

Gold is acting the same way. It has run up, held its gains, filled the June gap. Now it also enters the 4/15 gap. BTW, let me point out my example of how price has memory and patterns repeat. NOTICE where GLD stopped today? 136.75 was todays closing price. NOW, look at the HOD on 4/15.. it also is 136.75. I am not making this up, but it stopped today RIGHT TO THE PENNY. So again, price has memory, patterns repeat.

Remember, that works both ways. On the way up, on the way down. Now all these price points above will act as resistance. It will take a ton of buying and price action to bust past these points. For that reason, I am not quick to say, "ok the downtrend is broken, alll clear". Better to take everything level by level and watch the price action.

Going back to our proxy GLD, again watch to see how price works from here also with this 4/15 gap. As with SLV, having GLD fill the gap, hold it, close it, is key to this whole process.

Finally let me address a few things

A- the market is experiencing a correction. How deep will it be? No one knows. For weeks tho the markets breadth has been weak and getting weaker. So we should expect this selling. Nothing to panic about. Corrections are normal and are needed. In fact, as the stock market corrects, right under the public's nose, new stocks are setting up to run higher.

B- Beware the financial media. The next coming weeks are going ot be filled with headlines screaming panic, desperation, pain. A lot of articles I am guessing will say "Gold rises due to global slow down" or related headlines. Some say gold is higher because of Syria. I call BS on that. Its been clear that gold and silver have been weak and retracements are common on assets that have been sold heavily. Just imagine this- headlines from the media will start to say "gold up because of Syria" then as time goes on and Syria fades, headlines will say "gold down because fears recede on Syria". Bottom line, ignore what the financial media says. They are ALWAYS behind the curve or the mouthpiece for some fund.

c- Do NOT feel you have missed the boat here. I cant stress that enough. It is a common mistake to think that you can only make money by buying low and selling high. The problem with that is you have no idea when it WONT be bought back. What is best is to buy high and sell higher. Let the funds do the heavy lifting and one follows. The ONLY ones that can play this game with a high degree of accuracy are the insiders..... and even then, the market can turn the tables. So dont worry that now the markets took off without you. My position in GLD was bought by buying when it was making yearly highs and then I ripped it several months ago. I did very well and always do very well buying high and selling higher.

If I missed anything, let me know and pardon my grammar in case I missed something, It was late here!

@ ctguy

Here is the chart I use. Change the symbol to GLD for gold and SLV for silver, check the inspect block to mouse across the chart for high/low/close etc.

http://stockcharts.com/h-sc/ui

yes thats a good one and also freestockcharts.com is nice for folks following along. Both allow you to see in detail these gaps.

i;ll try and get some charts up provided I have the time but I believe I had suggested freestockcharts.com for everyone to book mark the site and follow along with my notes each night.

they are BOTH super easy to use and if you need help I can guide you with it.

i believe stockcharts.com even gives you the 50 20 10 MAs, forget if they give you S or E but yea enjoy them!

remember, prices and patterns repeat. NOTHING is new in that, its been happening ever since Wall St opened its doors.... and yes prices go in either direction. That is why you have the saying, resistance becomes support, and support becomes resistance. If you can remember that its all about numbers and their direction and can separate your personal feelings about any given asset you can successfully manage all markets from currencies, bonds, stocks and commodities.

yup7676: Your email option is OFF. I can't send you message. Thanks.

As of this moment (Asian Market), silver is down $0.52/oz, taking it just below $24/oz.

Just a note here, lets look at our proxies

Both SLV and GLD have been turning away from that 4/15 gap. As of right now they are below it. As I had mentioned a couple days ago, this gap is huge in terms of where gold and silver go.

Now, just because this first initial move finds gold and silver turning does NOT mean that we are going straight down either. Nor does it exclude both silver and gold from charging back into the gap again and trying to bust above it.

Just keep an eye and see now how far below gold and silver move down and take it from there. Remember, take every level by level and wait and watch. We'll get clues along every way.